Campari Q3 gains not enough to offset Covid impact
Aperol owner Campari Group saw sales drop 2.8% during the first nine months of 2020, despite double-digit growth in its third quarter.
Reported sales for the nine months to 30 September 2020 were valued at €1.28 billion (US$1.52bn), down from €1.30bn (US$1.54bn) in 2019 as a result of the “active and challenging” nature of the Covid-19 pandemic.
After organic sales fell by 11.3% in the first half of 2020 due to on-trade restrictions enforced as a result of the pandemic, Campari posted 12.9% growth in the third quarter of 2020 as measures eased around the world.
Over the nine-month period, sales in the Americas were down organically by 3.6%. The group’s largest market, the US, showed a “flattish performance”, affected by the ongoing destocking by wholesalers.
Jamaica registered an overall decline of 7.6% due to on-trade closures and Brazil was also heavily impacted by Covid-19, with an 11.4% drop in sales. Canada grew by 11.1% during the period.
Across the Americas region, Campari posted growth of 8.9% in the third quarter, which it said was largely driven by the solid performance of Espolòn Tequila and its Jamaican rums.
Sales in Southern Europe, Middle East and Africa declined 14.2%, mainly driven by an 11.6% decline in Italy. However, as the on-trade began reopening across the region, Campari saw its sales increase by 35.4% during the third quarter.
The company also saw growth in the third quarter for its entire portfolio in Southern Europe, Middle East and Africa, “most notably the higher-margin apéritifs”. The performance was driven by the short-term reaction to the lifting of restrictive measures, as well as the “staycation effect” that drove domestic consumption.
Global travel retail (GTR) across the region also dropped 64.8% and double-digit growth in France was not sufficient to offset declines elsewhere.
North, Central and Eastern Europe grew organically by 11.3%. Germany registered a solid growth of 11.6% and sales in the UK and Russia were also up 22.8% and 19.8% respectively.
In Asia Pacific, sales grew organically by 5.5%, boosted by strong overall growth in Australia. Other markets in the region declined by 28.3%.
Across its spirits portfolio, sales of Aperol were up 2.6% in the nine months, while Campari saw sales dip by 0.7%. Grand Marnier liqueur dropped 10.4% due to negative shipment performance in the US and GTR.
Skyy vodka and Wild Turkey Bourbon also declined 15.3% and 4.3% respectively, while the company’s rum portfolio grew 6.2% as a result of gains in the US, Jamaica and the UK.
‘Highly uncertain’ times
Bob Kunze-Concewitz, chief executive officer of Campari Group, said: “After the first half being strongly penalised by the effect of Covid-19, our third quarter results showed an improvement, boosted in particular by a temporary staycation effect in many countries.
“However, with the resurgence of the pandemic in many areas of the world towards the end of the third quarter, the overall scenario in the short-term remains highly uncertain. Nevertheless, our brands continue to experience strong consumption trends in the off-premise channel across key markets, confirming their solid underlying brand health.
“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. Furthermore, we remain firmly convinced that the out-of-home social experience and conviviality will remain essential to consumers’ lifestyles, as demonstrated by the consumers’ consumption behaviours in the third quarter.”