Analysis - Campari and the Aperol "headache"
Aperol sales may be down by as much as 40% in Germany
Of particular concern, however, was Germany, where Campari's Aperol continued to lose sales and drag down overall numbers in the country.
Previously, Campari had blamed bad weather and a delisting from a “key” retailer for the declines. But, with Aperol back on the shelves of the unspecified retailer, why is the liqueur brand still struggling in Germany?
In a call with journalists on Wednesday, CEO Bob Kunze-Concewitz blamed Aperol “copy cat” products, some 50 of which he claims have flooded the German market.
“Hope runs eternal for Germans,” Kunze-Concewitz said. “They are still trying their luck with the copy cats, and that's impacting sales.”
Analysts, while not pinpointing where the problems lie, were flagging up the disappointing numbers in Germany that seemed to show things are getting worse instead of better. UBS pointed to the 6.4% drop in full-year organic sales compared to a 4.9% fall in the nine-month results. “We remain concerned about the German business,” UBS said.
Ian Shackleton at Nomura estimates Aperol sales in Germany dropped off by 35% to 40% over the year, a startlingly high decline. However, the analyst is more positive about Germany than UBS, forecasting a “stabilisation” of the brand. And, with the Summer season approaching - typically the aperitif's biggest selling period because of its use in light summer cocktails - Shackleton predicts a rebound for the brand and a corresponding boost to Campari's margins in Germany.
In his conference call, however, Kunze-Concewitz bemoaned the emergence in Germany of a new cocktail that has become all the rage, edging out Aperol-based mixes such as spritz. The Hugo, which Kunze-Concewitz branded a “spritz with elderflower”, has hit on-premise sales and is now entering the off-premise in the shape of ready-to-drink products produced by Aperol's rivals.
Kunze-Concewitz called it a “headache”. It's a pain that Campari could do without at the moment.
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