Fomento Económico Mexicano S.A.B. de C.V (FEMSA), the Mexican multinational known for its Coca-Cola bottling operations and ubiquitous OXXO convenience stores, often flies under the radar of international investors. Yet, a closer look at its recent financial data reveals a fascinating trend that could signal a powerful growth strategy, one that might have been overlooked by even the most seasoned analysts.

While FEMSA's reputation is built on its beverage and retail arms, the company also operates a diverse portfolio of "Strategic Businesses," encompassing everything from logistics and point-of-sale refrigeration to drugstores and even pretzel shops across Europe. These ventures, while individually smaller than the core operations, are demonstrating an intriguing financial pattern that could be FEMSA's quiet weapon for future dominance.

The key lies in FEMSA's balance sheet. Specifically, the "Long Term Investments" line item has been steadily climbing, particularly in the last three years. In 2019, FEMSA reported MXN 110.952 billion in long-term investments. By the end of 2023, that figure had ballooned to MXN 353.48 billion, more than tripling in size. This dramatic increase suggests a deliberate and aggressive strategy of acquiring and investing in businesses outside its traditional core.

This hypothesis is further strengthened when we compare this investment growth with the performance of FEMSA's "Strategic Businesses" segment. While FEMSA doesn't provide granular financial details for each individual venture within this segment, we can observe its overall contribution to FEMSA's revenue. And here's the fascinating part: despite representing a relatively small portion of FEMSA's overall business, the "Strategic Businesses" segment has consistently outpaced the growth of the core Coca-Cola and OXXO operations.

This outperformance, coupled with the surge in long-term investments, paints a clear picture: FEMSA is strategically deploying capital to nurture its "Strategic Businesses," cultivating them into powerful growth engines. These ventures, operating across a diverse range of industries, offer FEMSA a level of diversification and resilience that its core businesses, by their very nature, cannot match.

Imagine a future where FEMSA's drugstore chain rivals its OXXO stores in terms of reach and profitability. Imagine a global network of logistics and refrigeration solutions, built on the backbone of its existing Coca-Cola distribution infrastructure. Imagine FEMSA becoming a major player in new and emerging industries, all fueled by the strategic investments it's making today.

The numbers, while currently limited in scope, speak volumes. FEMSA's "Strategic Businesses," fueled by this surge in long-term investments, are poised to become a significant driver of the company's future growth. It's a quiet revolution happening within the balance sheet, one that even the most attentive analysts might have missed.

But for those who recognize the pattern, the potential is undeniable. FEMSA, the unassuming giant, may be quietly building a portfolio of hidden gems, ready to explode onto the global stage.

"Fun Fact: Did you know that FEMSA's OXXO stores, with over 20,000 locations, outnumber Starbucks globally? The company opens a new OXXO store, on average, every eight hours! This relentless expansion, coupled with the potential of its "Strategic Businesses," makes FEMSA a company worth watching, not just in Mexico, but on the world stage."