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2019 Integrated Report

We are Coca-Cola FEMSA, and we believe in:

One vision

That unifies our organization to become an undisputed total beverage leader with sustainable and profitable growth, focused on creating and fulfilling consumer demand anytime, anywhere.

One platform

That ensures our teams work together as a cohesive unit that strives to create sustainable value in collaboration with our stakeholders through our everyday decisions and actions.

One future

That requires us to evolve together with our consumers and customers to match their ever-changing needs and generate social and environmental wellbeing as a shared purpose.

José Antonio Fernández Carbajal

John Santa Maria Otazua


Underscoring a year of transformation and capability building, we continued capitalizing on our industry’s potential to produce positive results while navigating dynamic environments.

Thanks to our ongoing transformation, we are developing the capabilities to win in a world marked by rapid changes. Thus, we embarked on our Fuel for Growth strategy to create an even leaner, more agile organization focused on our customers and consumers. This multi-year journey aims to strengthen our organization through new ways of working, strive for efficiency with best-in-class capabilities enabled by digital technology, eliminate redundancy, and ensure our sustainable business growth.

As part of our strategy, we are unifying our organization under one vision to become an undisputed total beverage leader with sustainable, profitable growth; one platform to ensure our teams work as a cohesive unit to create sustainable value for our stakeholders; and one future to maintain our flexibility to evolve together with our consumers and customers.

+ 194

billion pesos in total revenue

We collected more than 50% of the bottles that we put in Mexico and Brazil.

One Consumer-Centric Platform: Strategic Initiatives

Guided by our obsessive consumer focus, we are consolidating a winning total beverage portfolio to satisfy evolving tastes and lifestyles. We are fostering sparkling beverage growth by leveraging portfolio innovation and affordability, while driving our low or no-sugar beverage portfolio ahead of consumer trends. Additionally, we are improving our competitive position in still beverages, and amplifying our water portfolio to establish consistent leadership across this growing category.

As part of our Fuel for Growth journey, we functionalized our finance, supply chain, and human resources operating models to create a leaner service organization that leverages our company’s scale to drive our operations’ sustainable, profitable business growth.

Underpinned by KOF DNA, we are building a collaborative customer and consumer-centric culture founded on operational excellence, agile decision-making, an owners’ mentality, and always placing our people first.

Moreover, we are accelerating our digitally driven business transformation. After rolling out our KOFmmercial digital platform (KDP) across our traditional trade channel, we deployed KDP throughout Brazil and Mexico’s modern trade channel. In Brazil, we further expanded our first mover advantage across food aggregators and digital channels, while successfully piloting our omnichannel entry capability.

Finally, we continue to make important progress on our sustainability goals. Notably, we collected more than 50% of the bottles that we put into the market, well positioned to achieve our 2030 commitment of collecting 100%. We used 23.7% of recycled materials in our PET packaging, on track to achieve our 2020 goal of 25%. We improved our water use ratio to 1.52 liters of water per liter of beverage produced, on track to achieve our 2020 goal of 1.5 liters. Impressively, 71% of our manufacturing operations’ power comes from clean energy sources, up over seven times the past five years.

One Consumer-Centric Platform: Operating Highlights

Guided by our holistic strategic framework, we navigated a challenging macroeconomic environment to deliver positive results for the year. Our total sales volume increased 1.4% to 3.37 billion unit cases, with transactions growing 2.5% to 20.2 billion. Total revenues grew 6.7% to Ps. 194.5 billion. Operating income grew 3.0% to Ps. 25.4 billion. Operating cash flow grew 4.8% to Ps. 37.1 billion. Importantly, controlling net income reached Ps. 12.1 billion for earnings per share of Ps. 0.72 and per unit of Ps. 5.76 (Ps. 57.60 per ADS).

Our resilient Mexico operation achieved strong top-line growth, despite uncertain macroeconomic conditions. Our portfolio innovation, affordability, and commercial initiatives enabled us to generate price-mix improvements and deliver 8.1% revenue growth, while our ability to drive cost and expense efficiencies resulted in margin expansion.

In Central America, we delivered solid top-line growth, driven mainly by the strong performance of our Guatemala and Costa Rica operations. Our ability to capture synergies from new territories, expanded distribution platform, and improved point-of-sale execution enabled us to achieve outstanding volume growth in Guatemala.

Despite slow macroeconomic growth, our Brazilian operation continued its impressive turnaround, generating strong volumes that built on two years of continuous growth. Importantly, this growth is leading to market share gains across our key beverage categories, driven by our relentless consumer focus, robust portfolio, and point-of-sale execution.

After a complicated start to the year, we’re encouraged by our Colombian operation’s turnaround over the second half of 2019, driven by our efficiency, coverage, and portfolio initiatives. In Argentina, we adapted our portfolio to remain close to our consumers, driven by our affordability strategy.

Our total revenues grew 6.7%

Our operating income grew 3.0% to Ps. 25.4 billion

We seamlessly consolidated our Uruguay operation. Beyond exceeding our estimated synergies, we improved our volumes and margins, driven by increased production efficiency and market share gains in the sparkling and still beverage categories.

Finally, consistent with our disciplined approach to capital allocation and commitment to generating shareholder value, our Board of Directors agreed to propose an ordinary dividend of Ps. 4.86 per unit to the Annual Shareholders Meeting. This proposal represents an increase of 37% versus the previous year, reflecting the strength of our free cash flow generation and our confidence in Coca-Cola FEMSA’s solid financial position.

Moving forward, our overarching strategic priority is to become the best option for our customers and consumers in all of our markets—creating and fulfilling their demand anytime, everywhere.

On behalf of our employees, we thank you for your continued confidence in our ability to deliver economic value and to generate social and environmental wellbeing for you all.


Constantino Spas reflects on his first year as our company’s Chief Financial Officer. He discusses his five key priorities, our company’s positive performance, Fuel for Growth strategy, operating highlights, disciplined capital allocation, and financial flexibility.

  • Constantino, 2019 marks your first year as Coca Cola FEMSA’s CFO. How would you reflect on the company’s performance for the year? What are your priorities?

    2019 was a very positive year. We successfully navigated a challenging overall macroeconomic environment, and most importantly, we continued taking significant strategic steps towards our long-term goals. Additionally, we laid important foundations and achieved important milestones in our finance function.

    When I assumed the CFO position at the beginning of year, I set five key priorities:

    1. Maintain our solid financial foundation to improve our return on invested capital (ROIC) – To this end, we took important steps to prioritize ROIC as a key performance indicator (KPI) across our organization and renewed our commitment to a disciplined approach to leverage, capital allocation, working capital optimization, and profitability insights.
    2. Continue evolving our finance function to drive top- and bottom-line results and maximize shareholder value – Our finance function is increasingly evolving into a partner to our broader business in order to drive results. In this way, we support our operations by delivering valuable insights for better and faster decision-making to maximize shareholder value, while ensuring compliance and transactional efficiency.
    3. Guarantee that we will continue attracting and developing our talent base for our finance function – Together with Human Resources and aligned with our DNA, we continue to attract and develop the right talent across diverse finance functions across our operations.
    4. Continue our approach of transparency, fair disclosure, and continuous communication with our stakeholders – Building on this commitment, this year we took important steps to gain a deeper understanding of our shareholders’ perception of the company; for us, it is key to gather feedback from the market and maintain this important two-way communication. Our shareholders’ insights are fundamental as we continue to plan and execute our strategies.
    5. Finally, in my role as CFO, I continue to take important steps to support John and our senior leadership team on their journey of cultural transformation, reinforcing our DNA by taking an active role in the design and implementation of our Fuel for Growth strategy that enables us to leverage new ways of working.
  • Could you walk through the factors that drove the company’s positive performance for the year?

    During 2019, we capitalized on our operational excellence, portfolio initiatives, digital transformation, and Fuel for Growth strategy. First, we enhanced our operational excellence led by our efforts across our operations to continue improving our point-of-sale execution and expanding our cooler coverage. Second, we carried on revamping our portfolio across categories, while rolling out affordability initiatives to not only accelerate growth, but also improve our competitiveness to gain market share across key markets and beverage categories. Third, we continued to take steps on our digital transformation, incorporating big data analytics and artificial intelligence and advancing our omnichannel commercial capabilities. Moreover, our digital distribution and supply chain initiatives enabled us to become more efficient while improving our service levels.

    Finally, we started the rollout of our Fuel for Growth strategy—a set of ambitious productivity and efficiency initiatives designed to create an even leaner, more agile organization fully focused on our consumers. These initiatives focus on strengthening our organization through new ways of working, eliminating redundancies, and leveraging digital enablers to streamline our cost base, while generating funds to support our strategic initiatives and reinvest in our business.

  • Could you briefly review the highlights of the company’s operations in Mexico, Central America, and South America for the year?

    Mexico, our largest operation, achieved positive results in the face of a resilient, but challenging consumer environment. Despite market uncertainty, we delivered top-line growth, increasing our 2.5-liter and 3-liter returnable presentations’ coverage, while launching our affordable 235-ml returnable glass bottle at 5 pesos to incentivize our single-serve mix. Importantly, a more stable raw material environment, coupled with our Mexico team’s ability to generate significant savings, enabled us to stabilize and improve our profitability during the year.

    Our Central America operations’ positive performance was driven mainly by our Guatemala operation’s high single-digit volume growth. In Guatemala, we expanded our portfolio. In Costa Rica, we took successful measures to reduce our cost to serve, while we worked to strengthen our retail relationships in Panama. Finally, in Nicaragua, we adapted to a challenging market environment by connecting with our consumers through our cola, affordability, and returnable strategies.

    Moving onto South America, Brazil, our second largest operation, achieved high single-digit volume growth, while gaining share across beverage categories. Our Brazilian operation’s volume growth was driven by our affordability initiatives, revamped portfolio, and strong point-of-sale execution. In the face of a challenging year, our Colombia operation delivered better-than-expected volumes. During 2019, we restructured our portfolio and our business to successfully turnaround our Colombia operation. In Argentina, we adapted our portfolio to navigate an exceptionally challenging environment, and thanks to our amazing teamwork, we achieved cost and expense controls in order to protect our profitability. Finally, we seamlessly and successfully integrated our promising Uruguay operation, capturing important synergies.

  • Could you update us on the company’s integration of its acquisitions in Guatemala and Uruguay? Synergies?

    Our acquisitions in Uruguay and Guatemala are success stories. We smoothly and successfully integrated these territories, and we achieved better-than-expected synergies of more than US$25 million for the year—from best practices to cost and expense efficiencies on both the supply chain and manufacturing fronts. Importantly, we successfully deployed our DNA, working seamlessly to integrate our culture while establishing management teams that combine talent from our new and existing operations. In Uruguay, we are significantly improving our competitive position across key categories, marked by market share gains in flavored sparkling beverages. Moreover, in Guatemala, we are standardizing our portfolio while improving our competitive position.

  • Could you briefly walk us through how the company is transforming its Finance Operating Model through Finance 4 Growth?

    Through Finance 4 Growth, we are implementing a vision to support our front-line operations. Overall, our ambition is to serve as a business partner to our operations by delivering valuable insights for better and faster decision-making to maximize shareholder value, while ensuring compliance and transactional efficiency.

    In order to enable our finance teams to partner with our broader organization to drive sustainable, profitable business growth, we are implementing a vision that will allow us to:

    • Act as business advisor and integrator of our total business view
    • Provide valuable insights, proactively and robustly manage challenges, and support our commercial decision-making
    • Take ownership for and actively manage our company’s financial value drivers.

    With this in mind, our KOF Financial Services team is in charge of applying new digital technologies and skills to continually improve our Finance Operating Model.

  • To follow up, could you briefly discuss the steps that the company’s taking to maximize shareholder value through disciplined capital allocation, working capital optimization, and improved profitability?

    This year, we completed an important financial milestone. We concluded an eight-for-one stock split, the issuance of new Series B shares with full voting rights, and the listing of Series B and Series L shares in the form of units. Each new unit is comprised of 3 Series B shares and 5 Series L shares. This action enables our company to increase its capacity to issue new equity, which may be used as consideration in future share-based acquisitions, as well as for general corporate purposes. Moving forward, we feel confident that the listing of Series L shares and Series B shares in the form of units will help unlock value for our shareholders and position our company for new growth opportunities.

    Importantly, and underscoring our solid financial position, which allows us to return excess cash to our shareholders without compromising our flexibility to pursue future acquisition opportunities, our Board of Directors is proposing to our Annual Shareholders Meeting an ordinary dividend of Ps. 4.86 per unit, an increase of 37% versus the previous year dividend.

  • Could you further update us on the steps the company is taking to strengthen its capital structure and financial flexibility.

    Consistent with our mandate to deleverage our company’s balance sheet, we continued to repay debt to strengthen our company’s financial position. Importantly, we set the foundations to take advantage of favorable market conditions in the U.S. dollar and Mexican peso debt markets. As a result, in January 2020, we successful priced a historic public offering of US$1.25 billion principal amount of senior notes due 2030. The notes priced at US Treasury + 100 basis points and a coupon of 2.750%—the lowest spread, yield, and coupon in history for a Latin American corporate debt offering.

    In addition, on February 6, 2020, we successfully placed two tranches of Mexican peso-denominated bonds in the Mexican market for a total aggregate amount of Ps. 4,727 million. The first tranche is for an aggregate amount of Ps. 3,000 for 8 years bearing an annual fixed interest rate of 7.35%, and the second tranche is for an aggregate amount of Ps. 1,727 million for 5.5 years bearing a variable interest rate of TIIE + 0.08%. This transaction received broad participation from investment-grade investors, confirming our company’s financial discipline and strong credit profile.

    We intend to use the net proceeds from our sale of the 2030 notes to fully redeem our company’s 3.875% senior notes due 2023, and the remainder for general corporate purposes. This will enable us to increase the average life of our debt from 6.8 years to 8.3 years.

  • Finally, could you briefly discuss the factors that will drive the company’s performance during 2020?

    We are encouraged by the opportunities ahead. More than ever, we are one unified company, with our foundation for future success guided by one vision, one platform, and one future. To strengthen our P&L and maximize our ROIC, we look to take advantage of key levers to improve our business performance and profitability, including opportunities for sales growth and margin expansion, affordability initiatives, and strategic capital investments. Furthermore, we will continue executing our Fuel for Growth strategy to achieve efficiencies in our cost base, reinvent our supply chain, maximize our return on investment, and develop fit-for-purpose route-to-market models to improve our company’s profitability.


José Ramón Martínez, Corporate Affairs Officer, discusses our integrated sustainability strategy. Among other topics, he talks about our main sustainability achievements, environmental stewardship, and strengthening our local communities.

  • What would you say were Coca-Cola FEMSA’s main sustainability achievements during 2019?

    During 2019, we made good progress on our sustainability strategy aligned with Coca-Cola FEMSA´s strategic framework. As you may know, our 2020 goal is to supply 85% of Mexico’s manufacturing operations energy requirements with clean energy. For the year, we achieved significant progress towards this goal, using clean energy to cover 69% of those manufacturing plants’ energy needs, and we are confident that we will achieve our goal by the end of 2020. Moreover, we increased the use of clean energy for our bottling plants in Panama, Colombia, Brazil, Argentina, Guatemala, and Costa Rica, accomplishing 70.7% coverage of our company’s total manufacturing operations’ power needs through clean sources of energy.

    Continuing our long-term commitment to collectively address the challenge of waste management and aligned with The Coca-Cola Company’s commitment to a “World Without Waste,” we can proudly say that, in the main markets in which we operate, collection and recycling mechanisms account for more than 50% of the PET bottles that we sell, putting us well on track to our 2030 goal of collecting 100% of the PET bottles we place in the market. While this is a challenging task, we are confident that, with the support and co-responsibility of all of the actors in the value chain, we will fulfill our commitment through a market-based approach to the circular economy. Of course, we undertake this concerted effort in conjunction with our ongoing initiatives to lighten the weight of our packages, optimize the use of PET, and incorporate recycled content into our bottles. In 2019, we used an average of 23.7% recycled content in our plastic bottles, putting us on the right path to accomplish our 2020 goal of 25%; a goal that we aim to expand to include 50% of recycled materials in our PET packaging by 2030.

    To address the threat of climate change, we strongly support the adoption of a science-based approach that is aligned with the goal of the Paris Agreement to limit a global temperature rise to well below 2ºC. Consequently, during 2019, we embarked on the Science Based Targets initiative (SBTi), a collaboration between CDP (formerly the Carbon Disclosure Project), World Resources Institute (WRI), the UN Global Compact, and the World Wide Fund for Nature (WWF). This company-wide effort is designed to measure and account for the carbon footprint of Coca-Cola FEMSA’s value chain, with the eventual goal of adopting a science-based target for emissions reduction that reflects our commitment to a low carbon economy.

  • How would you describe the increasing integration of sustainability and its strategy into Coca-Cola FEMSA’s business priorities?

    At Coca-Cola FEMSA, we integrate sustainability into our day-to-day operations as a key driver of business decisions. This enables us to guarantee our company’s long-term development and continuity, foster the wellbeing of communities, and take care of the environment, fulfilling our mission to simultaneously generate economic and social value in collaboration with our stakeholders. We view sustainability as an enabler of our company’s business growth; thus, virtually all organizational decisions and actions, regardless of their origin, consider sustainability implications—from the selection of a particular supplier to the investment in eco-efficient infrastructure improvements, the expansion of our product portfolio to satisfy every consumer lifestyle, and our community investment. Ultimately, we understand that we share one vision, one platform, one future, and work for one Coca-Cola FEMSA.

  • In the global context of new labeling regulations surfacing across the board, could you please elaborate on Coca-Cola FEMSA’s commitment to empower consumers to make informed decisions through responsible marketing?

    We obsessively focus on satisfying our customers and consumers. Accordingly, transparency, fact-based information, and a high sense of responsibility form the guiding principles for our marketing practices. Given our company’s position in Latin America, our nutritional labeling recognizes that each population is different, with its own needs and habits; therefore, we fully endorse and comply with each country’s existing legal framework. When regulatory changes arise, we are always willing to take a proactive role in such changes, providing our expertise and quality information in order to ensure that our consumers receive high-quality information. Additionally, our production processes fulfill the highest quality standards, and our ingredients comply with each of our operations’ local regulations and high internal Coca-Cola standards.

  • What is Coca-Cola FEMSA’s strategic approach to water resource management?

    Water is a key resource for our communities and our operations; therefore, we are committed to the efficient use of this natural resource in our bottling operations—returning to the environment and communities the same amount of water used in our beverages, while safeguarding it not only for us to use, but also for our communities to enjoy now and into the future. From 2010 through 2019, we significantly improved our water use ratio by an impressive 22% to reach 1.52 liters of water per liter of beverage produced, representing savings of more than 10.5 billion liters of this vital resource compared to our 2010 baseline. Importantly, we currently give back to the environment more than 100% of the water we use in the production of our beverages in Brazil, Colombia, Mexico, Central America, and Argentina.

    Consistent with our commitment to water conservation, in collaboration with FEMSA Foundation, we carry out projects designed to improve communities’ quality of life by helping to provide them with safe water, improved sanitation, and hygiene education. We further work to strengthen water funds and conserve water basins through sustainable initiatives involving partnerships with several stakeholders. Through the Latin American Water Funds Alliance—comprised of the Nature Conservancy, FEMSA Foundation, the Inter-American Development Bank (IDB), and the Global Environment Facility—we jointly seek to offer hydrological safety in the region, ensuring sustainable access to a sufficient quantity and quality of water to sustain human life and socioeconomic development.development.

  • Since strong communities make for strong businesses, what is Coca-Cola FEMSA’s take on community engagement and development?

    To create a community relations vision that we can put it into practice in a standardized and systematic manner, we developed a management model that includes five sequential steps, which are the foundation of our Model for Addressing Risks and Relations with the Community (MARRCO). Based on MARRCO, our work centers are designing a community engagement plan to immediately implement a series of measures, including mitigation activities to reduce our operational footprint and community programs aligned with local needs and risks. In turn, this will help us to not only ensure our positive coexistence and our business’ permanence at those locations, but also reaffirm our social license to operate.

  • How would you say Coca-Cola FEMSA addressed a challenging, complex social and economic environment this year?

    2019 continued a trend of complex social and economic challenges in Latin America, triggered by political complexity and hyperinflation in Argentina. At Coca-Cola FEMSA, we have full confidence in the region in which we have grown for more than 25 years. Underscoring our commitment to the region, we are firmly committed to serve our markets with excellence and to grow our operations. Guided by a clear sustainability vision, we are prepared better than ever to face these challenging environments, powered by our drive to innovate, a winning product portfolio, superior point-of-sale execution, an unparalleled distribution network, unmatched cold drink equipment placement, and digital commercial capabilities.


We have the privilege to serve more than 261 million people, through 1.9 million points of sale in 9 markets of Latin-America, with a wide portfolio of leading brands in 10 beverage categories.

sparkling Beverages





water & bulk water





still beverages


















Total3,369 million unit cases¹
Total20,221 million units
footprint12Total261.1 millionpopulation served
Total1,909,112 points of sale
footprint14Total 49plants
footprint15 Total 268 distribution centers

* As of December 31, 2017, Venezuela is reported as an investment in shares

Product mix by size Multi-serve Single serve 21 79 MX CO UR CA BR AR 19 81 21 79 25 75 51 49 34 66
ReturnableNon-returnable Product mix by package MX CO UR CA BR AR 72 28 76 24 81 19 69 31 59 41 38 62

Product mix by category

BULK WATER 2 SPARKLING WATER 1 STILL 10.2%7.0%80.0%2.8% AR 0.9%91.1%8.0%0.0% UR 6.1%6.1%86.8%1.0% BR 7.2%9.5%5.5%77.8% CO 0.3%5.1%8.6%86.0% CA 15.3%5.1%6.4%73.2% MX

Financial Highlights

The strides we took during 2019 to put together the right sets of capabilities and talent positions our organization to generate increased value for all our stakeholders for many years to come.


Millions of Mexican pesos and U.S. dollars as of December 31, 2019 (except volume and per share data). Results under International Financial Reporting Standards.

% change
Sales volume
(million unit cases)
Total Revenues10,311194,471182,3426.7%
Income from Operations1,34825,42324,6733.0%
Controlling Interest Net Income264212,10113,910-13.0%
Total Assets13,671257,839263,787-2.3%
Long-Term Bank Loans and Notes Payable3,10158,49270,201-16.7%
Controlling Interest6,518122,934124,943-1.6%
Capital Expenditures60811,46511,0693.6%
Book value per share30.397.317.43-1.6%
  1. U.S. dollar figures are converted from Mexican pesos using the exchange rate for Mexican pesos published by the U.S. Federal Reserve Board on December 31, 2019, which exchange rate was Ps. 18.86 to U.S.$1.00.
  2. As of December 31, 2017, the Company changed the method for reporting Coca‑Cola FEMSA Venezuela to Fair Value. Due to this change, a recorded foreign currency translation charge in equity has been reclassified as a non-cash one-time item to the other non-operative expenses line of the Income Statement in accordance with IFRS.
  3. Based on 16,806.7 million outstanding ordinary shares as of December 31,2019 and 2018.
SALES VOLUMES million unit cases¹20192018201720163,3693,3223,3183,334 TOTAL REVENUES billion mexican Ps.2019201820172016 194.5182.3183.3177.7 INCOME FROM OPERATIONS billion mexican Ps.2019201820172016 25.424.725.023.9 highlights5 DIVIDEND PER SHARE Mexican Ps. 2019 201820172016 3.543.353.353.35
  1. Unit case is a unit of measurement that equals 24 eight-ounce servings of finished beverage.
  2. 2017 is re-presented without the Philippines.
  3. As of December 31, 2017, as a non-consolidated operation, Venezuela is reported as an investment in shares.

economic value distributed

At Coca-Cola FEMSA we are convinced that strong communities are good business. As such, we are in a privileged position to generate economic value to our stakeholders through our good business practices, which ultimately transforms into social value for the countries in which we operate.


Economic Value Generated $10,311 $194,471
Payments to suppliers $5,061 $95,456
Wages & Benefits for employees $1,620 $30,561
Acquisition of long-term assets $547 $10,324
Dividends paid to shareholders $394 $7,440
Income taxes paid to governments $255 $4,806
Donations & Community Investment $21 $390
Total Economic Value Distributed $7,899 $148,977



Volume growth in our sparkling category



Volume growth in our personal and bulk water category in Brazil

Flavored Water


Volume growth in our flavored water category in Mexico



Volume growth in our isotonic category in Central America

juices Nectars and
Fruit Based


Volume growth in our Juices, Nectars & Fruit Based category in Central America

Functional Beverages


Unit cases sold of our recently launched line of Isolite

energy drinks


Volume growth in our energy drinks category



Volume growth in our teas category in Mexico

Dairy Products


Volume growth in our dairy products category in Mexico



Volume growth in our plant based category in Colombia