Campari Australia is celebrating another period of surging sales, driven by the double-digit growth of Wild Turkey RTDs, Espolòn tequila and Aperol, as well as a positive trend from Wild Turkey bourbon.

Organic net sales in Australia were described by Campari as “very extremely satisfactory” after increasing by +22.6% to €26.4 million in the first three months of 2021.

Global sales increased by 17.9% to reach €397.9 million in the period. The strong performance also represented a 12.1% increase on Q1 2019, for a pre-pandemic comparison. Adjusted EBIT was €68.5 million, up 63.6% year-on-year on an organic basis, while group profit before tax increase 84.7% to €64.1 million.

Campari Group said that the growth was driven by markets in North America, northern Europe and Australia, which are naturally skewed towards off-trade sales.

Sales in the Americas increased 20.5% year-on-year during the three-month period. In north, central and eastern Europe, sales were up 16.3%, and the southern Europe, Middle East and Africa region enjoyed 6.1% growth.

Sales in Asia Pacific grew by 42.9%, with strong performances in Australia, Japan, New Zealand, China and South Korea.

Chief executive Bob Kunze-Concewitz said: “Overall we had a very solid and satisfactory start to the year with good brand momentum, driven by sustained home consumption.

“Nevertheless, the performance in this low seasonality quarter was amplified also by an easy comparison base as well as an early Easter effect.

“Looking at the remainder of the year, in addition to a marginally worsening exchange rates outlook, volatility and uncertainty remain due to the ongoing restrictions and the timing of the vaccine roll out in the European Union, affecting the on-premise channel as well as global travel retail.

“Concomitantly, the positive brand momentum is expected to continue, fuelled by sustained marketing investments, expected to accelerate towards the peak aperitif seasons, a gradual reopening of the on-premise channel as well as e-commerce momentum.”

The brands driving growth

Espolòn recorded a continued extremely strong double-digit performance (+63.9%), mainly driven by the core United States market thanks to solid premium tequila category momentum, as well as other seeding markets such as Australia and Canada.

Aperol recorded a stable performance at +0.1% in a low seasonality quarter, driven by the very positive growth of Germany, France, Austria, Russia, Switzerland, the United Kingdom and Australia compensating the weak shipment performance of the United States, penalized by a tough comparison base in the first quarter of 2020 in connection with advanced shipments ahead of price increases passed through in the second quarter of 2020 as well as the lockdown restrictions affecting the on-premise channel. Excluding the United States, Aperol’s growth would have been +14%.

In January 2021 an Aperol Spritz RTD was also launched by Campari Australia through a multi-channel activation (TV, billboards, digital and email advertising), as well as off and on-premise trade media activations to drive mass awareness and expand moment of consumptions.

The Wild Turkey portfolio, which includes American Honey, showed an increase of +30.9%, on a favourable comparison base (-12.7% in the first quarter 2020). The performance was driven by a double-digit growth in the core United States market, thanks to solid category momentum, as well as Canada, Australia and Japan, the latter favoured by route-to-market change in February 2021.

The growing importance of RTDs to Campari

Campari said Wild Turkey ready-to-drink recorded a “very positive performance”, driven by its key Australian market.

“Our Australian Wild Turkey RTD is growing double-digit very nicely at a sustained pace, and continuing to take market share in that market,” Kunze-Concewitz said.

He added that RTDs were gathering momentum globally for the company.

“If I take all of our ready-to-drink expressions together, so if you take the RTDs in Australia, you take SKYY BLUE in Mexico, in Asia you take the Aperol Spritz, the Negroni ready-to-go, they amount to quite a bit. It’s 10% of our sales on a global basis. And they’re really spot-on in terms of the consumer need right now. So, we’re looking at driving them forward.

“With regards to the Aperol Spritz, we’ve been very cautious in the past, and we’re only introducing it this year in those markets, large markets such as Germany or Australia, where Aperol and the Aperol Spritz are already very well established, but we see very good run rates there, as well as for the SKYY RTD potentially in a wider geographic footprint in the years to come.

“Clearly, consumers are reacting very positively to this. We’re not looking at going crazy on line extensions across our brand, it’s very selective, and we’ll keep the ones we are. And we will not have a plethora of line extensions or, let’s say, RTD versions. But what we have currently we think has a lot of legs. And we will leverage them in a way that we also build brand equity.”

Campari introduces new premium division

Campari Group also announced it has launched RARE, a new dedicated luxury division in the United States and key global markets, including Australia.

“With the aim of engaging the high-end trade and consumers in the super premium and above spirits market, we are pleased to introduce the RARE division, a new dedicated approach to establish Campari Group as a top purveyor of luxury offerings in the US and key global markets,” said Kunze-Concewitz.

In an analysts call, he added: “Our new RARE division is a new and dedicated approach to establishing our group as a key purveyor of luxury offerings globally, but, in particular, in the U.S. You can see that over the years we’ve built an impressive portfolio actually in high-end expressions, moving from upwards of $40 to beyond $700 actually if you look at that Grand Marnier bottle at the top there, it’s more around $1200.

“So, clearly, we have a very wide and very attractive portfolio. And we want to develop this super-premium and above expressions to re-conquer the high-end consumers. You all know that high end of our industry is growing faster than the mainstream, so this is an important initiative for the mid to long-term. This division will have its dedicated marketing and sales organisation in the US, and it will share the same back office, obviously in the US. Whereas in the rest of the world we will have dedicated cells within our existing organisations. We’ll kick off with a pilot project in the US. This year, we will only extend to three states, California, Texas, and Florida, gather those learnings and extend it further next year.”

In the US, RARE will focus on three product tiers:

• Opulent, top tier luxury offerings that allow Campari to engage with high net-worth individuals;
• Boutique, niche products that allow Campari to engage with ‘in the know’ consumers, spirits connoisseurs and
  bartenders;
• Signature, foundational super premium offerings, with award-winning propositions within the largest and fastest
  growing categories in the United States.

Outlook for the rest of 2021

Campari said that as a global player, the Group will remain focused in strengthening its iconic brands, on the back of consistent brand building investments, to ensure they are strongly positioned and ready to benefit from a gradual reopening
of the on-premise channel and accelerate their growth.

It added that the Group remains firmly convinced that the human desire to interact face-to-face, as well as the out-of-home social experience and conviviality will remain essential to consumers lifestyles also in the future.

Kunze-Concewitz ended his call to analysts by saying: “Stay well, get vaccinated, have a few spritzers and Negronis.”

Campari Australia targets Aperol & off-premise for growth in 2021