Campari sales grew 18.2% in Australia during the first quarter of 2020. The result was driven by positive performance of Wild Turkey RTD, Wild Turkey Bourbon, American Honey and the eponymous Campari apéritif.
While Australia experienced a weak start of the year due to bushfires affecting consumption, the last part of the quarter registered strong sales in the off-premise channel (accounting for ca. 85% of the market net sales in FY 2019) ahead of the COVID-19 lockdown.
“RTD in Australia continues to do very nicely, up double digit, 14%,” CEO Bob Kunze-Concewitz noted.
Additional areas of growth in Australian were Italian bitters, liqueurs and vermouth. However, Espolon tequila declined, in contrast to Campari’s US business, which continued to be driven by Espolòn in the first quarter.
Campari sales in other markets in the Asia Pacific region declined overall by -33.1%, as China was impacted by the COVID-19 pandemic and Japan registered a decline due to destocking ahead of the new route-to-market set up.
Globally, Campari sales fell 5.3% to €360.2 million, down from €370 million last year.
Kunze-Concewitz said: “In this period of high uncertainty and difficulty, our key priority remains to ensure the safety of our Camparistas and business partners.
“Inevitably our business is facing short-term headwinds. As a highly agile organization, we are taking rapid actions to mitigate costs and preserve liquidity whilst remaining focused on our long-term strategic agenda.
“To this extent, we are accelerating programs in digital transformation and e-commerce to further strengthen our digital capabilities across the entire organization. We are continuing to execute our m&a strategy focused on long-term brand building.
“Last, but quite importantly, our financial profile remains very solid. Looking at the long-term, we remain confident of the positive consumption trends and growth opportunities of our business. We will continue to leverage the strength and resilience of our brands and business, ensuring we are strongly positioned and ready to accelerate our growth as soon as the consumer demand normalises.
“As a committed and long-term brand builder, we will remain focused and highly engaged in the on-premise opportunity with our distinctive brand portfolio, firmly convinced that the out of home social experience and conviviality will remain essential to consumers’ lifestyles.”
Aperol takes a hit
Campari said that the closure of bars and restaurants around the world had drastically affected the growth of Aperol, which had until recently been one of the company’s key growth drivers.
“It’s interesting to see that while Aperol is flat at minus 0.2%, most of the performance is driven by a double-digit decline in core Italy, which, in 2019, represented 35% of the brand sales,” Kunze-Concewitz said. “We’re growing strongly in the off-premise with Aperol double digit, but it is so small that, obviously, cannot compensate for the on-premise decline.
“On the other hand, though, if we exclude Italy, Aperol grew by 22.1%, so that is maintaining its historical growth trends with very positive performances in core markets, Germany, Austria, Switzerland, and particularly very encouraging in some markets like the US. In the US, if we look at the Nielsen data up to the middle of April and the six weeks prior to that, Aperol grew somewhere around 120%, so a very nice growth trajectory.”
Campari confirms Champagne acquisition
Campari is preparing to become the first Italian company to own a Champagne brand.
During its preliminary results announcement, the group confirm its plans to by 80% of Champagne Lallier for €21.8 million.
Lallier was founded in 1906 in village of Aÿ in Champagne, and currently has 15 hectares of vineyards in the region. The business sold one million bottles of Champagne in 2019, including close to 700,000 bottles of Lallier.
“With this acquisition, we continue on enhancing the premiumness of our portfolio as well as building critical mass in the on-premise as well as in the strategic French market,” Kunze-Concewitz said.
The sale should be completed by the third quarter of this year.