Aperitifs help Gruppo Campari’s sales recovery

After experiencing a difficult first quarter, Italian drinks group Gruppo Campari has witnessed a boost in sales due to growth in its aperitifs business.

Gruppo Campari CEO Bob Kunze Concewitz has highlighted the strong performance of aperitifs in the group’s half year sales results

Announcing its financial for the first half of fiscal 2014, Campari, producer of Wild Turkey Bourbon and Skyy Vodka, revealed sales of €686.1 million, a decline of 1.8% on 2013 and net profits of € 57.3, a 0.5% dip.

However, this small drop follows a massive 47% pre-tax profits slump in Q1, when the group experienced a number of difficulties in key markets such as Russian and the US.

The company has attributed its “positive results” in the first six months of its financial year to growth of its key Campari and Aperol aperitif brands, as well as the strong performance of a number of key local single serve brands in Italy.

Bob Kunze-Concewitz, CEO of Gruppo Campari, noted that the group experienced a “positive performance” in Latin America, driven by Brazil and Argentina, while there was “strong recovery” in the second quarter in Russia, Jamaica and Australia.

In Q1, Campari’s results were affected by a slowdown in Russia “due to a less dynamic market and tightened credit control”, as well as shipment phasing in the US and the promotional effects of a late Easter holiday.

Campari continued to struggle in the America’s overall in Q2, registering an 11.2% sales decline due to “soft shipments” of its Wild Turkey Bourbon and Skyy Vodka.

Soar in aperitif sales

In the Italian market, which contributed to 28.3% of total group sales in the first half of 2014, Aperol sales grew 12.5% and single serve aperitif Crodino increased 33.6%.

Sales in the rest of Europe grew by +2.9% overall, driven by the William Grant & Sons portfolio distribution rights in Germany.

In the rest of the world, sales increased 6.6% due to recovery in Australia and strong performance in South Africa, Nigeria and travel retail.

With regards to key brands, Campari and Aperol grew 12.5% and 14.6% respectively, while Skyy vodka declined 2.6% and Wild Turkey’s organic sales dropped 4.9%. The group’s rum portfolio, which includes Appleton Estate and Coruba, declined 4.4%.

Bob Kunze-Concewitz said that despite expected continued headwinds in certain key markets, the group remains confident for the future.

“Whilst these headwinds are likely to have a lag effect on the full year results, we are confident that the overall positive organic sales trend will consolidate in the second half year thanks to the normalisation of shipment trends across key markets,” he added.

“Looking forward, we expect to continue improving the momentum of our key brand market combinations thanks to our strengthened route to market as well as impactful marketing initiatives, including restylings, innovation and premiumisation.”