Campari Looks to Build Out Non-Alc Offerings

Dear Client:

Campari sales were up 11.2% in the US–the company’s largest market at 31.2% of total sales–for the first quarter ended March 31. Growth in the Americas was up even higher with organic sales up 13% for the period.

Grand Marnier was a major growth driver in the US for the quarter with sales up just over 15%, shipments phasing ahead of depletions. As a result, the company expects brand performance to “even out the rest of the year,” said chief Bob Kunze-Concewitz on this morning’s earnings call.

Grand Marnier wasn’t the only standout. Other brands driving growth include:

  • Wild Turkey portfolio was up 4.6% in the US, with Russel’s Reserve reporting double-digit gains.
  • Aperol and Campari both reported double-digit growth.
  • Espolon was up 20%.
  • Glen Grant single malt also showed good performance, “reflecting the strategic refocus of the portfolio of higher-margin and longer-aged premium expressions away from un-aged variants.”
  • Jamaican rums were up double digits, driven by Wray & Nephew Overproof, Campari and Appleton Estate.

SKYY STILL DOWN, BUT IMPROVING. Meanwhile, Skyy is still in the red, -4.6% in the US, mainly dragged down by the flavored portfolio. But trends are improving. For instance, at the end of 2018, Skyy was down double digits in the US. Bob noted that the core Skyy variant is actually positive from a consumption and depletion standpoint.

But international markets are picking up most of the slack. “We expect international markets to compensate for destocking in the US, so that [Skyy] will end the year flat,” he said.

“We feel, overall, good about how the franchise is trending given how tough the market is.”  

BUILDING OUT NON-ALC. Campari is also revitalizing the Crodino brand, a non-alcoholic bitter aperitif, which tested “very positively” in Europe last year.

Bob teased that they’re also developing other non-alc ideas. “We’re also working on [new product development] in this area,” he said, adding, “I won’t say much more on this. I think it will be interesting to see what happens next year. I think we have a very strong competence in liquid development in the non-alcoholic area and a strong competence in aperitifs.”

Though he didn’t specifically address the potential for the non-alc brands in the US market, given current health and wellness trends in the US, if all goes well in Europe, why not bring the non-alcs to the US market?  

UK PRODUCER ESTABLISHES US OPERATIONS

UK-based wine, spirits and beer producer Halewood Wine and Spirits is opening a new US operating unit in Miami to facilitate the development of its portfolio in the US, Caribbean and the rest of the Americas, per a release.

“The US is the world’s biggest spirits market and no global strategy is complete without it,” says Halewood chief Stewart Hainsworth.

Jorge Gutierrez has been appointed managing director for the new unit in Miami. He has more than two decades of industry experience under his belt, previously working at Bacardi, Whyte & Mackay and Samson & Surrey.

“Given the thirst for unique, high-quality artisanal products in the US, the strength of our distribution partners, and Halewood’s above-the-line support we are confident our brands will make their mark with consumers quickly,” says Jorge.

The portfolio includes Whitley Neill gin, JJ Whitly gin, City of London Gin, Dead Man’s Fingers spiced rum, Crabbie Scotch malt whisky, The Pogues Irish whiskey, Hawkshead Brewery among others.

WSD BRIEFS:

THE MACALLAN LAUNCHES NEW VIDEO SERIES called The World’s Best Scotch Experiences. The series was created in collaboration with culinary and mixology tastemakers and provides viewers with innovative, interactive whisky serves, per a release. Each documentary-style video features an innovative chef or bartender demonstrating their talents paired with unique stories (and, of course, Macallan). To watch the videos, tune into US Macallan YouTube, Facebook and Instagram.

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Until tomorrow,
Sarah

“What would life be if we had no courage to attempt anything?” – Vincent Van Gogh

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