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Espolòn, Aperol Drive Campari In U.S., But Currency Eats Into Earnings

August 1, 2018

Campari Group enjoyed solid underlying sales trends in its fiscal first half ended in June, but fluctuating exchange rates hampered the company’s bottom line. On an organic basis, sales were up 5.4% to €778.2 million ($910m) in the first half, while EBIT increased 9.5% to €160.5 million ($188m). However, taking into account currency effects and the disposal of non-core assets, sales were down 4.7% and EBIT slipped 1.7%.

In the U.S., Campari’s biggest market, accounting for 27% of sales, Espolòn Tequila was up by strong double-digits in the first half, after surging 48% to nearly 300,000 cases in 2017, according to Impact Databank. Aperol aperitif and the namesake Campari bitter were also up by double-digits, benefiting from the cocktail occasion. The U.S. is now the second-leading market for the Campari brand globally, and the third-largest for Aperol. In 2017, Campari rose 11% to 122,000 cases in the U.S., while Aperol surged 49% to 100,000 cases. Also in the liqueurs category, Grand Marnier was likewise up strongly in the U.S. in the first half, although the company warned that was partially attributable to a favorable comparison with the previous year. Grand Marnier grew 6% to 516,000 cases in 2017, according to Impact Databank.

In Campari’s American whiskey portfolio, Wild Turkey was up by 10% in the U.S. in the first half, after rising 3.5% to 660,000 cases in 2017. Wild Turkey American Honey was flat for the six-month period, but the higher-end Russell’s Reserve saw double-digit growth from a small base. This spring, Campari extended its Bourbon lineup with Longbranch, an 8-year-old, 43% abv whiskey retailing at $40 that was launched in collaboration with Wild Turkey creative director Matthew McConaughey.

In rum, the group’s Appleton and Wray & Nephew Overproof brands also saw a good first-half performance, but vodka continues to be a challenging category for Campari, with Skyy falling 11% globally due to sliding sales in the U.S. The company said Skyy’s “shipments are still performing behind the sell-out trend, which was negative at a stable mid-single-digit rate,” in the first half.—Daniel Marsteller

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