Close Menu
News Sponsored story

Amber Beverage Group steps into bond market to finance state-of-the-art warehouse

As part of its latest ambitious development project, the fast-growing global spirits company, Amber Beverage Group (ABG), will be stepping into the bond market to fund its automated, high-bay warehouse development. To know more about the Amber Beverage Group and its development plans, we spoke with the CEO of the company, Jekaterina Stuģe.

CEO Jekaterina Stuģe is focused on growing the global availability of Amber Beverage Group brands

What is Amber Beverage Group and how was the last year for the business?

Amber Beverage Group is a rapidly growing global spirits company, whose products are found in millions of households and venues across the globe. The company has grown from its initial production business established in the Baltics to become a global player in the alcoholic beverages sector, employing over 2000 people.

Amber Beverage Group is expanding quickly, and our priority is making sure that our core brands are available across the globe. Overall, Amber Beverage Group had a tremendously good year in 2022 exceeding expectations by generating sales of €365.8 million (US$385.7m) and an EBITDA of €42.3m (US$44.6m) in 2022.

Last year was a year of optimisation of internal processes in both our production and distribution companies. After carefully creating our development strategy, we have entered the year 2023 with high enthusiasm.

How do you plan to use the money from the bond issue?

We plan to use these funds to build our own fully-automated high-bay warehouse in Riga, Latvia. It is very important for us to ensure efficient stock management for our partners and to maintain the speed of development of investment projects, which are characteristic of our Group.

The total height of the warehouse will be 24 metres, with pallets stacked on shelves across nine levels. The high-bay area of the automated warehouse will not require the presence of employees and almost all processes will be undertaken by automation.

Due to its size, complexity, and level of automation, this project is significant, not only at the Baltic level but also throughout Europe. We will install modern pallet and small goods stacking cranes, pallet and small goods conveyors, Pick-By-Light and Put-By-Light automatic picking systems, automated guided vehicles, and these will be connected via a powerful warehouse management system.

You want to continue to grow also through acquisitions. Which regions or segments would be suitable for this?

We continue to look at various M&A transactions and extensive development projects. We are mostly interested in growing categories of beverages according to our specialisation in the market. As we have attained our plans for strengthening our distribution business, we are now looking for additional opportunities to acquire and build drinks brands such as whiskey, rum, and other brown spirits. We are more interested in acquiring brands with stable growth trends and with existing volumes not less than 50,000 nine-litre cases.

Our strategy defines a very clear growth path. We are working to become a global organisation with the majority of revenue generated by the global footprint of our own brands. We are changing the organisation’s focus to value generation based on ABG brands – Rooster Rojo Tequila, Kah Tequila, Moskovskaya Vodka, The Irishman Whiskey, Writers’ Tears Whiskey, Riga Black Balsam, Cross Keys Gin, and Cosmopolitan Diva.

Amber Beverage Group warehouse
State-of-the-art: the complex warehouse system will put Amber Beverage Group at the forefront of the spirits industry

In which segments do you see growth for yourself?

Like the gin craze a decade or so ago, now the proliferation of well-made agave spirits appeals to consumers looking for something new and delicious. There is still a big education job to be done in demonstrating that well-made Tequilas are created in Mexico using 100% Blue Weber agave and people are beginning to understand – and taste – the difference between premium spirits such as KahTequila and Rooster Rojo Tequila compared with mixto tequilas. Tequila has always been strong in the USA, but we now find that the UK, South Africa, Spain and Australia are embracing the trend.

We are responding to the popularity of the tequila sector in two ways. Firstly, we have launched two smoked enhanced Tequilas – Rooster Rojo Ahumado and Rooster Rojo Smoked Pineapple. Additionally, we expanded our Kah Tequila range by launching an aged Tequila expression in two formats: Kah Extra Añejo and Kah Huichol, a luxury packaging format.

Secondly, we have continued investing in buying agave fields in Mexico, enabling us to control production from field to bottle. Currently we have more than 400 hectares of agave fields, and 2022 was the first year when we start using part of this superior agave in our production process.

Another rapidly growing category is Irish whiskey, and we are excited that in November 2021 we decided to enter the high-growth Irish whiskey category by acquiring two excellent brands – The Irishman and Writers’ Tears. At the time of acquisition, Walsh Whiskey was the largest independent producer of super-premium Irish whiskey with two world-revered brands, both of which are sold in 50-plus countries globally and have experienced compound annual growth rate of +21.2% (12 years to 2019) in combined nine-litre-case sales.

Irish whiskey is positioned in the premium price category in most export markets and has benefited from global premiumisation trends. By adding both brands to our portfolio and by using our own-route-to-market channel for boosting sales, we are focusing on the USA, which continues to be the key market for Irish whiskey exports, representing 57% of the total export value.

Walsh Whiskey Amber Beverage Group
Irish charm: Amber Beverage Group boosted its premium portfolio with the addition of Walsh Whiskey in 2021

How would you describe the spirits industry and how do you see the future of it?

The spirits industry and companies are often resilient to economic upswings or downturns. Bloomberg describes the industry as ‘one thing Covid cannot stop’. Despite travel bans, lockdowns, and bar and restaurant closures imposed by national governments, the overall industry was growing as alcohol sales in off-premise outlets soared.

The global forecast for spirits in absolute figures without adjustments to inflation foresees stable growth until 2025. At Amber Beverage Group, we have ambitious goals and we continue to look at various M&A transactions and extensive development projects such as the automated warehouse development. Our aim is to be not only amongst the biggest, but amongst the best, in terms of sustainability and efficiency. Each day we are creating a sustainable value chain to achieve strong revenue management, excellent execution of sales standards consistent across the Group, efficient production, and logistics processes.

It looks like you're in Asia, would you like to be redirected to the Drinks Business Asia edition?

Yes, take me to the Asia edition No