Portuguese soft drink producer Sumol+Compal achieved record sales in Portugal in 2017, despite the introduction of the special consumption tax on beverages with added sugar or sweeteners.
Favourable weather conditions, higher levels of tourism, and improved consumer confidence affected the fast-moving beverages sector positively (+9% by value and 2.2% by volume year on year). However, the new tax led to a rise of 15% or so in prices, associated with a 6.2% drop of the soft drinks market in volume.
Sumol+Compal ended 2017 with a net profit of €9.2 million, down 12.4% from the previous year, while turnover was practically unchanged at €356.1 million (+0.1%). Capex in 2017 amounted to €9.5 million, mostly allocated to Portugal.
International And Domestic Sales
Total sales in the home market were €251.7 million (+2.3%), a new record for the company. The company reformulated the Orange and Pineapple flavours with less added sugar, bringing them in line with public concerns.
International sales (to 57 countries), accounting for 27.6% of total sales, fell 4.2% to €96 million, due to the negative performance in Angola, the company’s most important overseas market, where net sales dropped 10.3% to €60.6 million. On the other hand, sales in Mozambique increased by 27.6% to €5.7 million.
The major innovation was the launch of the 330mL can in Angola, becoming an immediate hit and boosting the brand’s presence in informal channels, which account for around 80% of the Angolan market. The can format will be launched in other African markets, along with a range of Compal Classical Nectars in the 750mL carton format.
Sales in the European market grew 8.3% in value, with the highlight being Luxembourg (+18%).
Liquid Leadership
According to AC Nielsen Portugal, the Sumol+Compal portfolio gained volume market share, further strengthening its leadership in the liquid refreshing beverage market. The company placed 394.7 million litres of beverages and prepared vegetable products on the market in 2017, up 0.5%.
In its 2018 outlook, the soft drink company highlighted two factors that could impact the business in the short and medium term.
The first was the perception of consumers of the contribution of certain beverages to nutrition and health, as well as the interventionist policies of governments.
The second was the development of activities in Angola, which are dependent on the local economic and financial situation. In particular ,the availability of foreign currency to pay for raw materials, packaging, equipment and services was a concern.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: European Supermarket Magazine
