Campari reported 14% organic growth in the first half of the year— boosted by aperitifs, premium bourbon and tequila— but margins were affected by cost inflation.
Sales for the Italian spirits group slowed down in Q2 compared to the first three months of the year.
Second quarter growth was up 10.1% (compared to 19.6% in Q1), reflecting an “expected reversal of the temporary phasing effects from the first quarter,” as well as poor weather across core Southern and Central Europe and temporary delistings from selected European retailers due to commercial negotiations in connection with price increases. The price increases have since been passed through, the company said, but have failed to completely offset inflationary costs.
“Looking at the remainder of 2023, we remain confident of the positive business momentum across key brand-market combinations, reflecting business seasonality and expected normalization in volume growth, thanks to strong brand equity and continued strength in the on-premise,” said CEO Bob Kunze-Concewitz.
First-half year sales came to $1.6 billion. Sales were up in the Americas (43% of total sales) organically by 10.6%. In the group’s largest market, the U.S., sales grew by 11.7%, or 3.3% in the second quarter. Performance in the first half was mainly driven by the growth of Aperol, Espolòn, Appleton Estate, as well as Russell’s Reserve.
Across markets, the group’s Global Priorities brands (59% of total sales) registered +15% organic growth. Aperol delivered strong double-digit growth (32.4%) thanks in part to positive pricing, driven by triple-digit growth in the U.S. (122.5%) Campari delivered solid growth of 13.2%.
The Wild Turkey franchise registered positive performance (12.5%), also driven by the U.S., Australia, Japan and South Korea, with an outperformance by “high-margin” Russell’s Reserve (76%). Grand Marnier continued to be impacted by the U.S. destocking and declined 30.1%. Cognac sales were down for other major producers as well.
Regional Priorities (24% of total group sales) grew 16.7%, thanks to Espolòn’s strong momentum in its core U.S. market (30.8% in Q2). The company expanded its tequila offerings earlier this year with the launch of higher end Mayenda.