Sales Slip At MGP On Slower Demand, Increased Competition For Its WhiskiesFebruary 28, 2020
MGP Ingredients saw consolidated sales decline 3.5% to $363 million in its 2019 fiscal year ended in December, with operating income sliding 5.8% to $47 million. The company blamed slowing demand in its distillery products segment—including new distillate and aged whiskies—as the main factor in the yearly decline.
While noting that the consumer trend for American whiskey remains robust, MGP president and CEO Gus Griffin said that some of its customers were working through excess inventory in 2019, and that “the underlying growth rate for our target market is gradually slowing to come more in line with the long-term trend for the overall category. We also believe that the number of potential competitors for that volume has increased, primarily for sales of new distillate currently, but also for sales of aged whiskey going forward.”
Griffin, who is retiring in May and will be replaced by board member David Colo, added that MGP continues to see long-term value in its inventory of aged whiskies and will refine its mix, markets, and selling process to leverage those assets. MGP’s premium beverage alcohol division saw sales decrease 9.8% to $170 million last year, including a 15% drop for brown goods and a 0.5% increase for white goods.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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