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Chapel Down to produce record 3m bottles of English wine a year by 2028
Chapel Down already holds the title of England’s largest wine producer, but CEO Andrew Carter revealed to db this morning that the company plans to extend plantings to 1,023 acres (414 ha) by 2024 as part of a “long term enterprise”.
Chapel Down announced a strong financial performance in the year ended 31 December 2022, with growth in revenue, margin expansion and a full year adjusted EBITDA up 30% to £2.8m.
CEO Andrew Carter told the drinks business he was “delighted” with the results, which saw full year Net Sales Revenue (NSR), which excludes duty, grow by 10% year-on-year to £15.6m.
The Kent-based wine company planted an additional 38 acres of vines at our Boarley Farm site in 2022. It plans to plant an additional 118 acres there in spring 2023, taking the company’s total to 906 acres under vine, of which 750 will be fully productive in 2023. All 906 acres will be fully productive by 2027.
Chapel Down announced today that expansion will not stop there. The company has signed a new long term leasehold agreement for 117 plantable acres at Boughton Corner Farm for a future vineyard. Vines will be planted in spring 2024, taking the total planted vineyards to 1,023 acres (414 ha).
The company has previously announced its ambitions to double production by 2026, but the new plantings will take the firm beyond this goal.
“We currently have a land bank of 750 acres, and with that along with our winery in Tenterden we have the capacity to be able to double our business in value terms by 2026,” Carter told db. “On top of that, though, clearly we are a long term enterprise in wine, and we are constantly looking at how we’re then going to grow the business beyond that.”
By 2028, when the total vineyard area is fully productive, it will give the company the capacity “to take on board anywhere above 3,000 tonnes of fruit and the ability to make over three million bottles of wine”, Carter explained.
Last year saw Chapel Down’s net cash fall to £3.3m from £6.4m in 2021 due to expansion of the Tenterden winery to a processing capacity of up to 2,700 tonnes of grapes per annum (2021: 1,500 tonnes).
Along with the planned expansion, Chapel Down’s goal is to premiumise its brand image “by shifting the product links to more traditional sparkling wine”,” Carter said. 2022 was the firm’s first complete year as a fully focused wine business, after the prior year disposal of Curious Drinks Limited.
Sparkling wine will continue to be the company’s key driver both in terms of volume and value, with the outlook that “to sell more sparkling wine at a higher volume and a higher price [being] very achievable”.
“The concept of premiumising our business i.e. growing the sales value, growing the profitability, allowing us therefore to be able to invest more in brands marketing to drive awareness and penetration is a beautiful virtuous circle that we’re looking to develop,” Carter added.
Traditional method sparkling wine sales revenue showed strong growth, up 53% to £9.6m, with an annual record volume of 790,000 bottles sold.
Rob Smith, Chapel Down’s chief financial officer, told db that the focus on sparkling wine was somewhat “accelerated” in 2022 by the lower availability of still wines following the comparatively weaker 2021 harvest, which led to a 10% fall overall volume.
However, the focus on sparkling wines was “always the way we were going”, the company CFO said, explaining that Chapel Down expects traditional method sparkling wine to continue to generate 70% of its wine revenue.
Carter noted that, according to the company’s prediction, the UK English sparkling wine market “could be as big as 20 million bottles by 2032”.
“On top of that, you’ve also got a growing international demand for the brand, so this is just the beginning for English wine,” he said. “There are 10,000 acres now planted in the UK; about 900 vineyards. We are the leader in that and we are driving the growth.”
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