Blavod Vodka owner sees substantial sales drop

A changing business model has led to a substantial drop in revenue for UK spirits producer Distil, which was also hit by the delayed approval of its brands in the US.

Distil, maker of Blavod Black Vodka, has reported a substantial revenue decline

The Blackwoods Gin and Blavod Black Vodka producer saw its full-year turnover fall from £2.4 million in 2013/14 to £666,000 in 2014/15.

Distil has attributed the drop to its move away from third party distribution deals to becoming a “brand owning, brand-focused business”. A delay in the TTB’s approval for Blackwoods Gin to launch in the US also led to losses, as did a drop off in sales of Blavod in Eastern Europe, Ukraine and Russia.

Blavod gained approval to launch in the US in February this year following a distribution deal with Kanetz Alcohol Imports.

“Despite delays in the early part of the year we made solid progress in the second half with developments in the US and continued growth in the UK,” said Don Goulding, executive chairman of Distil.

“New listings for our brands in many leading bars and pubs together with one of the biggest UK multiple retailers have increased consumer awareness and trial of our products.

“I’m delighted to report that this level of improvement in our trading has continued into the new financial year and we are therefore optimistic looking forward.”

In September last year, shares in Distil fell almost 20% after the group issued a revenue warning over its delayed US distribution approval.

“Although the fall in revenue was initially expected, a later announcement of strong sales clouded the picture,” said Fiona Cincotta, senior market analyst for Finspreads.

“Given the scale of the change occurring at Distil and the delays in the US approval process coupled with weaker demand in Eastern Europe these results were never going to be something to sing and dance about, however the market seems unwilling to cut too much slack and shares in Distil are trading over 13% lower.”

Blavod Spirits changed its name to Distil in July this year to “better reflect the nature of our business” as part of a remodeling strategy to modernise its portfolio.

Other brands in Distil’s portfolio include Redleg Rum, Diva Vodka and Jagos Cream Liqueur.