Bitter Orange: Gruppo Campari hit by Aperol delistings in Germany

By Ben Bouckley

- Last updated on GMT

Aperol Spritz cocktail (Picture Copyright: Caspar Diederik)
Aperol Spritz cocktail (Picture Copyright: Caspar Diederik)
Despite strong world growth for key spirit Aperol, Gruppo Campari said its H1 results were hit by a trade dispute with a German retailer that saw bitter orange-based spirit brand and Campari completely delisted.

Italian firm Gruppo Campari posted total net sales of €618.3m (up 3.2% versus H1 2011) in organic terms in the year to June 30, while net profit rose 3.5% to €77.9m.

Bob Kunze-Concewitz, CEO, said that Grupo Campari’s H1 in Europe was hit by the German commercial dispute, weakening consumer confidence in Italy and the transition to a new Russian sales platform.

South American trading was “very challenging” ​and particularly hard hit by a slowdown in Brazil, Kunze-Concewitz added, but he noted strong momentum in North America and Asia Pacific.

Aperol enjoyed stunning growth in 2011, but in 2012 to date the brand’s sales (excluding Aperol Spritz home edition) were up only 1.7% as an overall percentage of group sales.

'Horrendous weather' hits brand

Despite growth in established markets such as Italy (+8.4%) and Austria (15.3%), German sales (only 15-20% are on-premise) fell 20% overall due to the commercial dispute with a “key client”​ and terrible weather in Q2.

However, Aperol saw strong double-digit growth in second-tier markets such as Switzerland, Benelux, France and Spain, and triple-digit growth in the rest of the world.

On a later analyst call, Deutsche Bank analyst Jamie Isenwater said: “If my maths is correct, excluding that one customer, German sales growth has gone from about +20% in Q1 to down nearly 10% in Q2. I know the weather was bad, but, are these broadly the right sort of numbers?

“There must have been a underlying slowdown beyond all the various one-offs.”

Kunze-Concewitz replied: “With respect to Germany, you need to bear in mind that last year, in Q2 Aperol grew by about 148%.

“And that customer [involved in the dispute] had an over-proportionate impact on overall trading. Aperol was down in Q2, yes, you’re right. But you shouldn’t underestimate the absolutely horrendous weather.

Aperol Spritz: the next Jägerbomb?

July had seen better weather, Kunze-Concewitz said, and Aperol was growing again in Germany as a result (beyond any reconciliation with the client) while Grupo Campari had increased its penetration in Northern Germany.

Speaking to Paola Carboni from Equita SIM, Kunze-Concewitz later said: “The dispute hit two brands – Campari and Aperol. Both of them were completely delisted.

“After a freeze in the relationship…we have reached an interim agreement. We do not get full and permanent listings. But, very importantly for us, we have pushed through the price increase we wanted.”

“So in H2 of the year we are going to have and in-and-out situation with these two brands and that customer.”

In Q2 2011 that customer represented almost 25% of brand sales, so had a significant impact on it. “The consumption that we lost – the customer was able to recover 25% with his own ‘me-to’ [spirit], while 75% of customers did not purchase other spirits brands.

“Essentially this is lost sales, a lose-lose situation…they lost and we lost. So this didn’t make any sense for both parties.”

The rising popularity of the Aperol Spritz (Aperol, Prosecco, sparkling water) led Euromonitor analyst, Spiros Malandrakis to reflect this week on a spate of NPD around the Spritz cocktail, and it potential as the ‘next Jägerbomb’.

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