Campari full-year sales hit €1.82 billion

Italian drinks group Campari has reported total sales for 2017 grew to €1.82 billion (US$2.24bn), driven by key global brands including Aperol, Campari and Wild Turkey.

Campari reported “strong” sales growth in its full-year 2017 financial results

The increase represents a 5.2% jump in reported sales compared to the previous year. Organic sales were up 6.3%, discounting the impact of exchange rate fluctuations.

Bob Kunze-Concewitz, chief executive officer, said: “We achieved a strong performance across the key indicators in full-year 2017, delivering on strategy thanks to our focus and disciplined execution.”

Campari’s ‘Global Priority’ brands grew organically by 7.7% throughout last year. This was driven by the group’s largest brand, Aperol, which continued to outperform and grew 19.5% in 2017.

The Campari brand was up 9.8% organically and enjoyed a “very good performance” in the US, France, Austria, Brazil, Japan, Argentina, Jamaica and Italy.

Wild Turkey Bourbon, which includes American Honey, saw organic sales increase 6.4% following a particularly strong performance in the US.

Grand Marnier grew 1.8% overall, driven by the US and Canada. The group’s Jamaican rums, including Appleton Estate, J Wray and Wray & Nephew, showed “positive organic growth” of 6.3%.

Campari’s ‘Regional Priority’ brands grew 13% overall last year. Epolòn Tequila was up 57.9%, thanks to continued double-digit growth (57.1%) in the US and development in new markets such as Australia, Russia, Italy and Canada.

Glen Grant grew 10%, driven by France, South Africa and China, while Italian bitters rose 2.7%.

Bulldog Gin grew 32.3% having only joined the Regional portfolio in the first quarter of last year.

Regional performance

Regionally, the Americas – which represents 43.7% of total group sales – saw sales grow 9.3%.

Wild Turkey, Espolòn and Cabo Wabo Tequilas, Jamaican rum and Grand Marnier were noted for driving sales in the US, while Aperol and Campari continued to demonstrate double-digit growth in the region.

The positive sales were offset by Skyy vodka due to “strong competitive pressure, reduced innovation in infusions” and difficult trading conditions during the third quarter due to hurricanes.

Brazil enjoyed a 4.9% organic sales increase, despite continued macroeconomic weakness. Argentina reported a 30.3% organic sales growth, while Canada saw organic growth of 6%. Mexico and Peru also grew by double digits.

However, overall sales in Southern Europe and the Middle East and Africa were relatively flat, registering a 0.7% increase for 2017.

Sales in Italy were up 2%, driven by Aperol, Campari and Crodino. The group said the region’s other markets showed “overall a very strong performance”, thanks in part to double-digit growth in France and Spain, and “very satisfactory” results in South Africa. Nigeria showed “positive growth”, as consumers showed a thirst for Skyy and American Honey.

Sales were stronger in North, Central and Eastern Europe, growing 5% overall in 2017. However, Germany reported a 2.6% drop in sales, attributed to adverse weather conditions during the summer and “low margin” brands such as vermouth. This was offset, however, with an 11.5% growth spurt for Aperol, and growth across the group’s Bulldog Gin, Skyy vodka and Wild Turkey Bourbon brands.

Sales in Russia rose by 40.6% organically, while the UK was up 13.8%. Austria, Poland and the Czech Republic saw “overall positive organic growth”, driven by Aperol and Campari.

Asia Pacific also reported rather flat sales, with overall growth reported at 0.8%. Australia’s sales were down 0.6% due to a slow start in 2017 resulting from poor weather conditions.

Wild Turkey ready-to-drink (RTD) also struggled as a result of “persistent competitive pressure” in the RTD category, and a decline in co-packing sales.

Despite 7.3% sales growth in China, the rest of Asia struggled, particularly Japan, due to route-to-market changes.

Kunze-Concewitz said: “Looking ahead into 2018, our outlook remains fairly balanced in a still uncertain macroeconomic scenario for some emerging markets.

“Importantly, in line with our ongoing focus on the company’s core business, we have launched a series of projects aimed at improving the efficiency of our operations in some key markets, among which the relocation of our US head office from San Francisco to New York City, and the optimisation of manufacturing operations in Brazil.”