Aperol boosts Campari H1 sales as Skyy declines

Wild Turkey owner Campari Group has reported an organic sales growth of 8% in the first half of 2019, driven by the double-digit growth of Aperol.

Aperol was once again the star performer in Campari’s half-year results

Sales reached €848.2 million (US$945.4m) and group net profit increased by 11.8% to €116.7m (US$130m). All of the firm’s regions posted growth.

Global priority brands registered “strong” organic growth of 9.8%, however Skyy vodka witnessed a “low-single-digit” drop due to destocking in the US and “persistent competitive pressure”.

Aperol grew 22% due to “solid growth” in its core European market, “despite bad weather in May”. The brand also witnessed a double-digit increase across all regions.

Campari witnessed a “solid performance”, up 5.8%, driven by core markets.

Wild Turkey Bourbon grew 11.4%, boosted by the core US and Australian markets.

The Jamaican rum range – which includes Appleton Estate and Wray & Nephew Overproof – increased 2.3%, bolstered by the core US market.

Earlier this month, the Italian firm entered into “exclusive negotiations” with the Chevrillon Group to buy French firm Rhumantilles SAS, owner of Trois Rivières and Maison La Mauny agricole rum brands.

Regional priority brands increased by 10.8% organically, with a “very positive performance” from Epsolòn Tequila, which grew 46.5%, boosted by the US.

Campari said that “positive growth” in Averna liqueur, Forty Creek Canadian whisky and Riccadonna wine “helped offset some weakness” from Glen Grant Scotch whisky and Cinzano vermouth in a “low seasonality period”.

Geographically, organic sales in the Americas were up by 9.9%, with North America growing by 10.3%. The US – the firm’s largest market – was up by 10.9% with “solid growth across all brands” except Skyy.

Sales in Southern Europe, Middle East and Africa registered positive organic growth of 7.7%, while North, Central and Eastern Europe increased by 7%. The Asia Pacific market saw organic sales grow 1.1%.

Advertising and promotion spend increased by 9.4% organically to €151.5m (US$168.8m). This was driven by the “phasing of major investments in global brands”, mainly Aperol, Campari, Skyy and Grand Marnier, as well as select regional priority brands.

‘Very strong start’

Campari Group CEO Bob Kunze-Concewitz said: “After a very strong start to the year, our positive business momentum continued in the second quarter 2019, the peak season for aperitifs, helped by the late Easter effect, despite the tough comparable base as well as the poor weather in May across Europe.

“Key underlying profitability indicators grew ahead of organic sales development, thanks to a very positive sales mix, which more than offset the dilutive impact of the emerging markets recovery and the adverse effect of the agave purchase price, whose growing trend is expected to continue throughout the rest of the year.

“Reinvestments in brand building and sales capabilities initiatives are also expected to continue in the second half.

Looking ahead to the 2019 full-year, Kunce-Concewitz said “the outlook remains fairly balanced in terms of risks and opportunities”.

“The positive business momentum is expected to continue, with persisting volatility of emerging markets in their key seasonality period,” he continued.

“We remain confident in delivering a positive performance across all key underlying business indicators.”