Campari Boss Says Cost Of Living Crisis Not Deterring Drinkers

By Dave Simpson
Campari Boss Says Cost Of Living Crisis Not Deterring Drinkers

Italian spirits group Campari sees no sign that concerns over inflation are deterring drinkers who still want to enjoy a night out as the winter party season looms in Europe and the United States.


"We are not seeing any change in consumer sentiment in our portfolio," Campari chief executive Bob Kunze-Concewitz said on a call.

"The off premise (business) has slowed down in its growth, but this is from a high, high level, but the on-premise is very vibrant in all our markets," the CEO added, highlighting demand from drinkers heading out to bars and restaurants.

He was speaking after Campari, whose brands also include Aperol and Wild Turkey, reported a 19% rise in sales in the third quarter, covering the key northern summer season, helped by price increases.

The strong US dollar also boosted the group's sales and profitability, as the United States is Campari's single largest market.


Campari confirmed its full-year forecast for a flat organic margin on its EBIT-adjusted earnings, with higher sales prices helping to offset the impact of rising costs for alcohol, glass and logistics.

During the call, Kunze-Concewitz said "never say never" when asked whether Campari might seek a transformational deal that would propel it higher in the ranks of global premium spirits companies.

Speaking to Reuters, he highlighted the importance of the US market for potential expansion and said the company wanted to grow its business in aged spirits.

Campari said it recently acquired a minority stake in London-based Catalyst Spirits, a global spirits brand incubator company and the main shareholder of Howler Head.

Earlier this year, Campari bought a 15% stake in bourbon brand Howler Head with global distribution rights.


Italy's Campari Builds Up Bourbon Business With $600m Kentucky Deal

The above news was followed by news that Italian spirits group Campari said that it had reached an agreement to buy an initial 70% stake in Wilderness Trail Distillery for $420 million, strengthening its bourbon offer.

Under the agreement, Campari has an option to buy the remaining 30% of the Kentucky-based producer of bourbon and rye whiskey in 2031.

The deal implies a current enterprise value of $600 million, which makes it the second biggest acquisition for the Italian group after it bought Grand Marnier in 2016.

"By adding the fast-growing super premium Wilderness Trail brand we further expand and premiumise our bourbon offering, priming it to become Campari Group's second major leg after the aperitif portfolio", Chief Executive Bob Kunze-Concewitz said in a statement.

He added that the acquisition allows the group, which already controls Wild Turkey, to significantly expand its production capacity and ageing inventory to satisfy the future growth of Campari's premium bourbons.

Campari said it would finance the deal, which is expected to close before year end, with a combination of available cash and bank term loans, increasing the current net debt/EBITDA-adjusted ratio from 1.5 times to 2.3 times.

Wilderness Trail Distillery, which was started in 2012, expects sales to jump 39% to $57 million in 2022, with core earnings of $37 million.

The United States is already Campari's largest market.

Speaking to Reuters last week, Kunze-Concewitz highlighted the importance of the US market for potential expansion and said it wanted to grow its business in aged spirits.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.