Campari sales drop 11.3% in H1

28th July, 2020 by Nicola Carruthers

Aperol owner Campari Group saw organic sales fall by 11.3% in the first half of 2020 due to on-trade restrictions in markets across the world as a result of the pandemic.

Aperol’s sales declined by double digits during the first half of 2020

Total group sales reached €767.2 million (US$900m) during the first six months of 2020, down from €848.2m (US$995m) year-on-year, as a result of the impact of the Covid-19 crisis on the Italian firm. In May, the group reported a 5.3% fall in sales in the first quarter of 2020 due to the closure of bars and restaurants in Italy during the pandemic.

Campari said its performance was particularly hit during the second quarter as the majority of its on-trade-focused markets were impacted by Covid-19. The period was also the “the peak season for the high-margin and on-premise skewed apéritif business”, which the group previously expected to be “more impacted” during Q2.

Bob Kunze-Concewitz, CEO of Campari Group, said: “The half year 2020 can certainly be characterised as an extraordinary period, and the overall scenario in the short-term still appears to be uncertain with regards to the extent and timing of the economic recovery in the context of the gradual lifting of the restrictive measures.

“Nevertheless, we continue to experience solid consumption trends for our brands across key markets, although shipments are temporarily impacted by destocking, in particular, in the US market.”

Despite the weakness in the on-trade, Campari witnessed “strong brand sell-out momentum” in the off-trade across its key markets.

Geographically, the group’s Americas sales fell by 7.6%. Campari’s largest market, the US, dropped by 4.1% due to on-trade restrictions. In the US off-trade, the portfolio recorded 40.3% growth and “strong double-digit growth” for its core brands since lockdown, according to Nielsen figures. Jamaica declined by 8.9% and Canada grew by 9.6%.

Sales in Southern Europe, Middle East and Africa declined by 32.8%, due to the full closure of the on-trade in Italy, which fell by 33.1%. Global travel retail dropped by 60.7% and Spain fell by 49.3%. France was “flattish” with a positive Q2 performance, boosted by destocking in the first quarter ahead of a route-to-market change.

North, Central and Eastern Europe recorded an organic sales growth of 5.9% with Germany growing by 3.4% due to an “acceleration” in Q2. In the UK sales grew by 36.2%, boosted by the off-trade and e-commerce channels during the nation’s lockdown period. Russia rose by 19.2%.

Sales in Asia Pacific increased by 7.1%, boosted by “strong growth” in Australia. China grew by 26.2% and Japan registered a 48.6% decline.

Looking across its portfolio, Aperol and Campari were “strongly impacted”by Covid-19, falling by 11.6% and 10.6% respectively. Grand Marnier liqueur fell by 9.7%, while Skyy vodka declined by 16.5%. Wild Turkey Bourbon dropped by 7.7% and the group’s Jamaican rum portfolio rose by 4.8%, boosted by the US, Jamaica, the UK and Canada.

The group’s regional priority brands dropped by 11.5% due to Cinzano vermouth, Glen Grant Scotch whisky, the Averna and Braulio bitters brands and Bulldog gin. Local priority brands declined by 13.1%.

Digital focus

Last month, Campari Group signed an agreement to acquire a 49% share in Italian e-commerce alcohol platform Tannico for €23.4m (US$26.5m).

Kunce-Concewitz added: “While we will continue to undertake all the necessary actions to contain the effects of the pandemic on the business in the short-term, we remain focused on pursuing our long-term strategy, via the acceleration of our programmes in digital transformation and e-commerce, remaining focused on our M&A strategy and leveraging the strength and resilience of our brands and organisation for future profitable growth.”

Looking to the rest of the year, Campari expects the negative impact to “lessen with the gradual lifting of the restrictive measures across markets”. The firm also expects shipments to “progressively catch up with the positive sell-out trends once the destocking activities are completed at wholesaler level”.

Leave a Reply

Subscribe to our newsletter