MGP sales boosted by premium alcohol brands

MGP Ingredients, one of the largest third party spirits producers in the US, has reported a net sales increase of 8.1% to $US86.3 million in its third quarter results, bolstered by the growth of premium alcohol and specialty ingredients.

MGP’s third quarter sales were bolstered by the growth of premium alcohol

The Indiana-based firm saw its gross profit increase by 23.2% to US$18.6 million, reflecting stronger gross profit results in the ‘Distillery Products’ section.

Operating income declined 9.1% to US$10.5 million, as a result of a decrease in other operating income recorded in the prior year quarter.

“We are very pleased with the quarter, as we continue to make progress against our long-term strategic goals,” said Gus Griffin, president and CEO of MGP Ingredients.

“Year to date, our operating income growth rate, excluding items in other operating income recorded in the third quarter of 2016, is at the high end of our guidance.”

The group’s Distillery Products section, which produces a plethora of third party spirits brands under supply contract, increased net sales to 8.5% to $US72.3 million. Meanwhile gross profit improved to US$16.5 million, or 22.8% of net segment sales, compared with US$12.4 million in the third quarter of 2016.

Griffin said: “We continued to see strong demand for our premium beverage alcohol products this quarter, supported by our ability to build strong partnerships with existing customers as well as attract new customers.

“Year to date, our results underscore the significant opportunities afforded by our long term strategy. The divestiture of ICP, as reflected in our results this quarter, allows us to further sharpen our focus on our key growth platforms.  We continue to make progress against that strategy by expanding our premium beverage alcohol product offerings, capabilities and sales coverage.

“At the same time, we continue to invest in building our inventory of aged whiskey, and remain well positioned to meet our partners’ needs and support the growth of the category.  The value of that inventory, at cost, now totals US$58.6 million.”

“Finally, while still very early, we continue to be pleased with the progress of our brands initiative, as we focus on developing both our organisation and brand portfolio. As recently announced, we will ship our limited edition Remus Repeal Reserve later this month.”

In October last year, MGP experienced a chemical spill at its plant in Atchison, Kansas, causing a number of people to suffer respiratory problems.