Campari CEO steps down with immediate effect

Campari’s chief executive Matteo Fantacchiotti has resigned with immediate effect after a mere five months in the job for what the company termed “personal reasons”.

His abrupt departure took investors in the Italian spirits group by surprise and sent the company’s shares 5% lower to €7.2, a level they have not seen since 2019.

Analysts commented that the company’s acceptance of Fantacchiotti’s resignation from the board must have been sudden because his leaving terms had yet to be agreed, Campari saying that they were “still to be defined and formalized”.

Fantacchiotti, joined Campari in 2020 and until he stepped up in April, had been running its Asia Pacific region.

Kunze-Concewitz

He took over from Bob Kunze-Concewitz who grew the group through a series of 27 acquisitions in his 16 years as CEO and left with an €30 million golden farewell from the company.

But Kunze-Concewitz did not depart entirely, becoming a non-executive director. He has now been charged with finding a successor to Fantacchiotti.

As a stop-gap measure, Campari’s chief financial officer Paolo Marchesini and general counsel Fabio Di Fede have become interim joint chief executives.

This has been a difficult year for Campari, during which its shares have slumped by 28%, much the same as those of its global rivals. This has disappointed shareholders including the controlling Garavoglia family.

Courvoisier

The biggest task facing Fantacchiotti when he stepped into the driving seat was the rejuvenation of the Courvoisier cognac brand which Campari bought from Suntory in the spring for US$1.32 billion.

That was Kunze-Concewitz’s final and largest takeover, one in which many commentators thought he had overpaid.

At the time of the acquisition, Kunze-Concewitz said the downturn in cognac demand was “temporary”.

“We are very bullish on the medium and long-terms prospects of the brand”, he said in an interview.

Cyclical

Fantacchiotti supported that view, telling the drinks business in an interview in July, “A lot of people are saying Cognac’s not doing well, which is true, but we know these big categories are cyclical, and we think Cognac will bounce back.”

“We like dusty, unloved brands with fantastic heritage, where we can really dig into the story of the brand. That’s a job we can do for Courvoisier.”

“It’s better to enter the category at the bottom, because you can grow it again.”

Since then, consumers in both the US and China, the category’s largest markets, have continued to turn away from Cognac.

Campari fell short of earnings expectations for the first half of this year, which it blamed on bad weather.

Soft demand

Only last Friday Fantacchiotti prompted a sudden further fall in Campari’s shares when he told an investor conference that US demand remained “soft”.

The company was forced to issue a press statement to “clarify” that his comments did not relate to only its own performance but to spirits producers in general, saying that “some of the softness that has been seen in the first half of this year is persisting slightly longer than expected into the third quarter”.

Chairman Luca Garavoglia thanked Fantacchiotti for his service, and sought to underline the group’s long-term ambitions of growing by driving further into the US and China markets with its full portfolio.

Campari’s “growth ambitions remained strong and the future is solid thanks to the strong group organisation and a unique portfolio,” he said.

Analysts also noted that despite Fantacchiotti’s remarks, the company had not revised its guidance for the remainder of this year.

Yesterday, commentators noted that Fantacchiotti was not quoted in the announcement of Campari’s taking a minority stake in Capevine Holdings. It is often the case that a CEO would provide additional commentary in such a statement.

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