Strong demand for Campari's bright orange Aperol liqueur in Europe, and also the United States, helped to boost sales and profitability for the Italian drinks group in the first half of the year.
Campari's 'aperitif', Aperol, has been benefitting from a renaissance for cocktails and a preference for low-alcohol drinks among young consumers.
Aperol, once a niche product sold mostly in northern Italy to make the Spritz cocktail, has become one of the group's best-selling products. Its sales rose by 24.7% in the first half of the year.
The liqueur continued its solid performance in its traditional markets, including Italy and Germany, and also enjoyed strong growth in the United States, where the drink is a newcomer on bar counters.
High-Margin Brands
Aperol and other high-margin brands, such as Grand Marnier and Campari, helped the Milan-based company to partially offset negative impacts from currency swings and the sale of some non-core brands. Campari is the deep-red bitter liqueur used to make the cocktail Negroni.
Group sales rose by 5.4% on an organic basis in the first half, while gross profit came in at €471.9 million ($551 million), with a margin on sales of 60.6% – up from 58.4% in the first half of last year.
In contrast, sales of Campari's SKYY vodka brand continued to decline, especially in the United States, where the drink is also expected to suffer in the next few months.
"Looking at the remainder of the year, the net sales organic growth is expected to be driven by the continued outperformance of the key, high-margin global and regional priorities in core developed markets, with the exception of SKYY [vodka]," the Milan-based company said.
US Destocking
Campari also said that SKYY would continue to be negatively impacted by further destocking in the United States. Total SKYY vodka sales were down 11.1% on an organic basis in the first half. The company also warned about a negative impact from a rise in agave prices – a key ingredient for tequila.
Shares in the Milan-based group were up 1.8% at 11.35 GMT, to €7.34 – just off a record high posted on 25 July.
"The stock rose strongly in the last month, so, even if the group has confirmed the outlook for this year, some investors are taking profit," a Milan-based analyst said.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
