English-wine producer Chapel Down has touted the potential for the country’s rosé wines as it continues its focus on the sparkling-wine category.
The company saw a 47% rise in sales volumes of its traditional-method rosé in 2023, growing from 178,000 bottles (14,833 nine-litre cases) in 2022 to 262,000 bottles last year.
Speaking to Just Drinks following the business’ full-year 2023 results today (16 April), CFO Rob Smith said the growth was an “ongoing story backed by consumer demand”.
CEO Andrew Carter added: “Clearly in the sparkling space, whether you are at the Moët (Champagne) end or the Prosecco end, there’s a real consumer demand for pink sparkling.
“From a production point of view, we make our traditional brut and rosé in very similar ways. They all build into our mid- to long-term plans in terms of continued growth, based in itself from consumer demand.”
Carter said the off-premise channel grew “strongly” in 2023 and was a key factor in its sparkling-rosé performance. Smith added having rosé and brut SKUs side by side on shelves, like Champagne brands do, was a “powerful proposition”.
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By GlobalDataAvailable in more than 4,000 shops, Chapel Down said it held a 35% share of English sparkling-wine sales in the UK off-premise last year, with the channel forming the majority (around 50%) of the brand’s sales.
Carter also noted a “flourishing” e-commerce business and a “strong sense of love for the brand” on social media, as well as 61,000 visitors to its site in Tenterden, Kent, in 2023. Direct-to-consumer sales accounted for 32% of sales in 2023; D2C revenue grew 11% to £5.7m compared to 2022.
For the full year to 31 December, Chapel Down’s net sales revenue (net of retro) rose 15% year-on-year to £17.2m.
Operating profit increased 81% to £2.3m. Adjusted EBITDA grew 87% to £5.4m, driven by “profitable trading” as well as grape-price adjustment following a bumper 2023 harvest. The company added it was “profitable at all levels”.
Chapel Down still-wine range to grow by third in volume following record harvest
While Chapel Down’s focus remains on its sparkling portfolio – which forms around 80% of sales – Carter expects to sell 30-40% more still wines in 2024 following a record 2023 harvest. He also expects to increase volumes of its “gently carbonated” range, A Touch Of Sparkle, to soak up the surplus.
Last year, Chapel Down harvested a record 3,811 tonnes of grapes, accounting for around 3.4 million bottles – over 2 million of which will be used in its traditional-method sparkling wine. This was 86% higher than 2022 (2,050 tonnes) and 75% higher than Chapel Down’s previous record in 2018 (2,173 tonnes).
In January, Carter told Just Drinks the bumper crop had allowed it to rethink pricing for its lower-tier still range without impacting margins. It is looking to cap the recommended retail price for its namesake still-wine range at £15 ($19.06) this year to increase competitivity.
Chapel Down also makes a “super-premium luxury” still-wine range, Kit’s Coty, with an RRP of around £35.
Despite falling still-wine sales in 2023 – with net sales down 7% to £2.6m compared to 2022 – Carter said there was still “major” interest in its products.
Chapel Down’s average sale price (ASP) increased 9% in 2023 but was offset by a 14% drop in volume to 375,000 bottles, it said.
“The still-wine side of the market is more competitive,” Carter said. “But what we are seeing is that there is major consumer interest for our still wines in and around the £15 price point.”
Chapel Down listed on the UK’s Alternative Investment Market (AIM) in December, moving from Aquis, to broaden its potential pool of investors. Diluted EPS grew 92% in 2023 to £0.94.
Smith said the inheritance-tax free status of its shares has been a “big boon”. “We’ve seen a very marked up-shift in the amount of retail investors who have joined us over the last three or four months,” he said.
The winery has more than 9,000 shareholders and Carter said interest from institutional investors was “growing” alongside its long-term individual investors, which include British billionaire and member of the House of Lords, Michael Spencer.
Looking ahead to 2024, Chapel Down is predicting double-digit revenue growth, led by its core, traditional-method, sparkling range.
“We’ve got an exciting year coming up, with increased spend on our advertising and communication campaign ‘A fresher way to celebrate’,” Carter said.
“And we’ve got continued focus on our sponsorships to drive awareness and also within our e-commerce channel – we continue to build on the 18% growth that we’ve had in 2023 by bringing more users into our into our brand via our e-com channels.”
