Campari celebrates ‘solid’ sales for first half of 2018 thanks to Aperol and Epsolòn tequila

Drinks giant Campari reported a 5.4% revenue boost in its first half-year results this week, spurred on by sales of Aperol in the US.

Chief executive Bob Kunze-Concewitz said the group saw “solid organic growth, reflecting an accelerated top-line growth in the second quarter, broadly recovering the first quarter phasing issues, as well as a normalisation of trends across profit indicators.”

“The favourable sales mix continued to benefit from the outperformance of the key high-margin combinations of global and regional brands, driving organic growth across profit indicators and margin expansion,” he said.

“Looking into the second half of the year, our outlook remains broadly balanced in terms of risks and opportunities. We remain confident in achieving a positive performance across key underlying business indicators, driven by the continued positive development of the key high-margin combinations by brand and market.”

Aperol grew organically by +8.7%, boosted by “continued sustained growth” in the brand’s core markets Italy, Germany, Austria and Switzerland, while sales were up by 24.7%.

It makes up approximately 17% of Campari Group’s overall sales.

High-margin brands such as Grand Marnier as well as Espolòn Tequila also contributed to a strong start to the year for the firm, with Epsolòn rising by 34% , although the higher cost of agave thanks to a crop shortage this year is expected to have a bigger impact over the next six months, according to analysts at Investec.

Trevor Stirling, analyst at Bernstein, also said that  higher agave costs will mean profit margins will be “weaker” in the next half of 2018.

However, a number of other brands performed particularly well within the group. Campari  itself rose by +8% organically globally, and registered “double digit growth” in the UK, while Grand Marnier liqueur grew by 13.2%.

Wild Turkey bourbon grew by 9.9%, performing particularly well in the US and Australia.

Skyy vodka registered a double-digit decline of 11.1%, which the drinks giant attributed to “weakness” in the flavoured spirits segment, while Scotch whiskey brand Glen Grant was “broadly flat” with a 0.6% decline.