Soft Shipments For Skyy, Wild Turkey Hurt Campari’s Bottom Line In U.S.August 5, 2014
Gruppo Campari saw sales decline in the U.S. market in the first half of 2014, as shipments of its key brands were weak due to what the company called “phasing issues.” Campari’s U.S. sales were down by 3.6% organically for the six-month period ended June 30, as shipments of both Skyy and Wild Turkey were relatively soft. However, the company said that depletion trends—for the Skyy and Wild Turkey franchises as well as the overall Campari portfolio—remained strong in the U.S., which is Campari’s biggest market outside of Italy, accounting for roughly 20% of overall sales. Campari added that the Lascelles deMercado rum range—led by Appleton Estate—and its Aperol aperitif brand have been doing particularly well in the U.S.
Campari began the second half of 2014 with a smaller portfolio in the U.S., as, starting July 1, the Suntory brands it had been handling in the market—including Bowmore, Glen Garioch and Auchentoshan single malt Scotch whiskies; Japanese whiskies Yamazaki, Hakushu and Hibiki; and Midori liqueur—shifted to the recently formed Beam Suntory. Those brands accounted for roughly 1% of group revenue, according to Campari.
Gruppo Campari’s overall sales declined by 1.8% to €686.1 million ($918.3m) in the first half of the year, even as the Milan-based drinks group’s organic sales rose by 3.8%. Campari’s results were negatively impacted by an exchange rates effect of -6.5%. The company enjoyed solid sales growth for the six-month period in Italy (+8.2%), the rest of Europe (+2.9%), Brazil (+14.8% organically with adverse exchange impact offseting the gains) and Australia (+2.4%). Those five markets account for roughly 60% of Campari’s total sales.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.