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Gruppo Campari is Italy's biggest spirits and wine company. As a result of a series of acquisitions since 1995, it has successfully transformed itself from a one-brand business in Italy into a global player with a portfolio of more than 50 premium brands. Its home territory still accounts for a significant proportion of sales, thanks to core brands Campari and Aperol and imported spirits which the group distributes under contract. But the US has gradually become its single biggest market. Campari also has a growing collection of other premium tipples including Skyy vodka, Wild Turkey bourbon and Glen Grant whisky, Ouzo 12 and best-selling Brazilian brandy Dreher's. In summer 2016 the group also secured control of Grand Marnier liqueurs in an agreed takeover.
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Gruppo Campari is the world's #6 marketer of branded spirits by volumes. It is the market leader in Italy and also in Brazil, and has a significant presence in other markets including Germany and the US. The group has expanded rapidly since the early 1990s through a series of acquisitions which transformed it from a single-brand business active mainly in Italy to a global group with more than 50 brands and a global presence. In addition to four factories in Italy, it now has 12 more around the world in Greece, Scotland, Jamaica, Brazil and other countries.
From 2015, Campari reorganised its portfolio into five groupings. Global Priority brands include Campari, Aperol, Skyy, Wild Turkey, Appleton Estate and the other Jamaican rums. Regional Priorities include the main bitters (Cynar, Averna and Braulio), liqueurs (Frangelico), whiskies (Glen Grant and Forty Creek), tequila (Espolon), sparkling wines and vermouth (Cinzano, Riccadonna and Mondoro). Local Priorities includes Camparisoda, Crodino, Wild Turkey RTDs, Ouzo 12, Cabo Wabo, Sagatiba and Dreher. All other brands make up a fifth grouping.
The best-known brand in the portfolio is of course eponymous herbal aperitif Campari, a classic symbol of Italian cafe culture, produced according to the same complex recipe for more than 150 years. The drink is available in its traditional concentrated form - it forms the core of several celebrated cocktails including the Negroni and the Americano - and also as CampariSoda, the very first pre-packaged ready-to-serve alcoholic beverage when it was first introduced in 1932. That brand too has become an icon of Italian culture, still served in a unique conical bottle created by futurist designer Fortunato Depero. Campari Mixx, introduced in 2002, is a more recent addition to the portfolio, a single-serve RTD prepared from a mix of the core brand with fruit juice, launched in 2002. The core Campari Bitters range sold 3.3m cases in 2016, with around another 1.7m cases of Camparisoda. Impact estimated retail value for the main Campari brand of $590m in 2016. Key markets by value are Italy, Argentina, the US and Germany. In recent years, the group has sought to widen the appeal of Campari with a series of lavish "Red Diaries" extended commercials, using celebrated Italian film directors, and stars with international following. Clive Owen and Zoe Saldana lent their services in 2017 and 2018 respectively.
The group's best-known brand in North America and its top seller by volumes globally is Skyy vodka, a leading brand in the US where more than 75% of its sales are generated. It is one of the leading American-made vodkas, but sales have been in modest decline from the intense competition from younger rivals, not least New Amsterdam which pushed it from the top spot in 2016. Skyy's volumes were 3.9m cases in 2016 (Impact), with combined value of $700m. Key markets by value are the US, South Africa, Argentina and Brazil. Like other premium vodkas it comes in a variety of flavoured versions known as Skyy Infusions (including 2009 launch Pineapple and 2010's Ginger), as well as luxury 90-proof Skyy90. (An RTD malt beverage, Skyy Blue, was produced under license in the US by SABMiller until 2004). The US portfolio has been expanded with the purchase of niche super-premium brands including Cabo Wabo tequila (originally launched by rock star Sammy Hagar), Espolon tequila and X-Rated vodka and liqueurs.
In 2009, the group agreed to acquire Wild Turkey bourbon whisky from Pernod-Ricard for $575m. This has proven one of the group's fastest-growing brands, with double-digit growth since acquisition as a result of variants such as Wild Honey, Honey Sting and Rare Breed, and super-premium editions Russell's Reserve and Master's Keep Decades. In 2016 the group appointed actor Matthew McConaughey as "creative director" and brand ambassador. A line of premixed RTDs have enjoyed particular success in Australia, where Wild Turkey sponsors the National Rugby League. Volumes were 1.5m cases in 2016, with retail value of $375m. The US is the key market for Wild Turkey, followed by Australia, Japan and Russia.
As a result of their continuing growth, Campari, Skyy and Wild Turkey have overtaken low-alcohol apertif bitter Aperol, which experienced dramatic growth following acquisition by Campari in 2003. It remains the top-selling spirit in Italy, with a sizeable additional market in Germany, Austria and other continental European countries. However sales have plateaued, following a 400% increase between 2005 and 2011. That leap was prompted by the launch of variants such as Aperol Spritz, a mixture of the original aperitif with Prosecco and soda. Combined retail sales of Aperol were estimated by Impact at $500m in 2016, with volumes of 3.4m cases. Top markets fro the brand by value are Italy, Germany, France and the US. Bizarrely, Aperol Spritz negotiated a role as the official global spirits brand of Manchester United football club from Jan 2014. Other major products include Glen Grant single malt whisky, also a leader in Italy; classic Greek spirit Ouzo 12 and Cynar, a traditional Italian after-dinner digestif made from artichokes.
Important regional products include a portfolio of local brands in Brazil such as the country's best-selling brandy Dreher, Old Eight and Drury's whisky and Liebfraumilch brand sweet wines. It acquired Sagatiba cachaca in 2011. Other recent acquisitions have included Sabia of Argentina and CJSC of the Ukraine, which makes sparkling wines including Odessa and Golden Duke. In 2010, it acquired a collection of spirits brands from William Grant, which had in turn been acquired only a few months earlier from C&C Group. These were Carolans cream liqueur, Frangelico hazelnut liqueur and Irish Mist blended honey whisky. Campari had previously distributed them under contract. It still owns Frangelico, but Carolans and Irish Mist were sold in 2017 to US rival Heaven Hill for €140m.
In 2012, Campari also acquired leading Jamaican rum maker Lascelles DeMercado for around $414m. Brands include Appleton Estate (previously distributed in the US under license by Brown-Forman), with volumes of 1.2m cases, Wray & Nephew and Coruba. A new acquisition in 2014 was Fratelli Averna of Sicily, whose lead brand Averna is a rival in Italian bitters to Campari. Price tag was €104m. Also in 2014, the group acquired Canadian distillery Forty Creek for around $165m. It produces a range of super-premium whiskies under the Forty Creek name as well as Prince Igor vodka, and brandy and rum brands.
In Mar 2016, the group agreed to take majority control of French liqueur Grand Marnier in a friendly takeover that valued the business at around €684m. The latter's family shareholders transferred around a third of their combined 60% holding in parent company Societe de Produits Lapostolle immediately, and endorsed a tender offer from Campari to public shareholders. By the end of June, Campari had accumulated almost 70% of Grand Marnier's equity and 54% of voting rights. Grand Marnier has distribution through different partners around the globe, but these are gradually transferring to Campari. Grand Marnier generated revenues of €130m in 2017. Perhaps surprisingly, the US is Grand Marnier's top market by value, followed by Canada, France and Italy. Another bolt-on in early 2017 was premium gin Bulldog, with sales of around 150,000 cases worldwide in 2016 and revenues of $12m. Price tag was €82m. In 2018, the group acquired Bisquit cognac - key markets include South Africa and Belgium- for €54m.
Gruppo Campari also controls a small but important collection of premium wines, led by Cinzano vermouth, the global #2 behind Bacardi's Martini. The Cinzano portfolio also includes a collection of sparkling Italian wines. A collection of Italian still wines led by Sella & Mosca of Sardinia were sold in 2016 for around €62m. The group also markets a small portfolio of its own soft drinks in Italy, including popular non-alcoholic aperitif Crodino, various fruit sodas and the Lisiel and Valle d'Oro mineral waters.
Campari handles distribution for various third-party brands in key markets. The most significant of these are Glenfiddich, Grant's, Jaegermeister bitters and Grand Marnier in Italy and Brazil; Brown-Forman's Jack Daniel's, Southern Comfort and Finlandia vodka in Italy; Grand Marnier and the William Grant & Sons portfolio in Germany; and various Suntory spirits and liqueurs including Midori, Yamazaki and Bowmore scotch in the US and other markets, as well as C&C's portfolio of Irish whiskies. It operates distribution joint ventures in the Netherlands with Marnier-Lapostolle and William Grant, in Belgium with Marnier and Pernod-Ricard, and in Spain with Gonzalez Byass. It strengthened its own operations in Russia and the CIS with the purchase of a controlling stake in local distributor Vasco in 2011.
Group revenues broke through the €1.0bn barrier for the first time in 2009, and have continued to rise steadily. Revenues for 2015 were €1.66bn, up 6% reported and 3% organic. Net profits jumped by more than a third to €175m. In 2016, revenues rose by a further 4% (or almost 5% organic) to €1.73bn. Net profit slipped 5% to €166m as a result of costs associated with the Grand Marnier acquisition and the exit from still wines. On an adjusted basis excluding those one-off items, the group claimed a 7% increase in profit.
Revenues for 2017 rose to a new high of €1.82bn. Net profit more than doubled to €356m, with a big contribution from US tax reforms. On an adjusted basis excluding financial items, the increase was more like 18%. Revenues for 2018 slipped to €1.7bn as a result of currencies; but rose 5% on an organic basis. Net profit was €296m.
The group said that Aperol accounted for 16% of its revenues in 2018, Campari for 10%, Skyy 9%, Wild Turkey and Grand Marnier 8% each and the Jamaican rums for 5% combined. The group's reliance on its troubled domestic market has gradually reduced, from over 75% in 1995 to under 21% for 2018. Instead, revenues from the US have steadily grown, to 26% of sales in 2018. Other key markets are Germany (10% of sales), Jamaica (5%), Australia (5%), Canada (3%), Brazil (3%) and Russia (3%).
The group has accumulated sizeable debts as a result of its various acquisitions. Net debt totalled €1.2bn at the end of 2016, but has been reduced since then with cash from disposals. The figure at Dec 2018 was €846m.
In around 1860, Gaspare Campari developed a new aperitif from a complex blend of more than 60 ingredients including quinine, bitter herbs and orange peel, combined with an alcohol base and a bright red cochineal colouring derived from cochineal. He set up a cafe in Milan to serve this and other similar concoctions, and his fame gradually spread, to the extent that he was able to set up a manufacturing plant in around 1904 to bottle his Campari cordial for sale to other bars and restaurants. His son Davide took over the running of the business in around 1920, and incorporated it under his own name, with growing success.
The economic and cultural boom enjoyed by Italy during the late 1950s and early 1960s spread Campari's fame around the world, and it became known as the preferred tipple of the so-called "beautiful people" of the international jetset. By this time, ownership of the business had passed to Davide Campari's nephew. Following his death without issue in 1976, his widow appointed two trusted managers, Dino Garavoglia and Erinno Rossi, as chairman and deputy chairman, and they jointly inherited the entire company from her in the early 1980s.
As the global drinks industry began to consolidate in the 1990s, Campari's newly appointed CEO Marco Perelli-Cippo took the decision to establish a broader international presence, launching a strategy of steady expansion through acquisition. The first such step came in 1995 with the purchase of the Italian subsidiary of Dutch group Bols Wessanen, which owned a number of other popular Italian cafe drinks including Cynar, Crodino and Lemonsoda. In return Wessanen itself became a sizeable minority shareholder in the company, the first time any outsider had held shares in the business.
In 1998, the group took its first steps into the US market, acquiring a minority shareholding in fast-growing independent vodka brand Skyy Spirits. That brand had been introduced in 1992 by Maurice Kanbar, a serial inventor and entrepreneur, whose main claim to fame was as the developer of the first multiplex cinema in New York. (Other experiments included an electric fluff remover for sweaters and a protective covering for hypodermic needles). Skyy was born out of an innovative method for producing vodka which, Kanbar claimed, resulted in greater purity than any competing brand. (Campari acquired a controlling stake in Skyy in 2001 and took full control of the business five years later). In 1999 the group acquired the Ouzo 12 brand from Diageo, as well as another iconic Italian brand, Cinzano.
Cinzano has a heritage that is even more distinguished than Campari, first distilled from a secret recipe of herbs and spices in 1757 by brothers Carlo and Giovanni Cinzano. As a result of the quality of their wine, the Cinzano brothers received a royal warrant from the royal family of Savoy, and in the 1830s, the family business was commissioned to develop a local equivalent to the champagne then being widely imported from France. This resulted in the creation of Italy's first sparkling wine or spumante in 1840. Cinzano became popular throughout Italy over the following century, but for the most part was unable to match the wider international success enjoyed by Martini. It did however enjoy a surge in sales in the UK during the late 1970s after it was acquired by IDV (later Diageo), who commissioned a series of commercials from ad agency CDP featuring actress Joan Collins and comedian Leonard Rossiter, which have come to be regarded as classics. (Ironically, these ads succeeded by spoofing the "beautiful people" marketing which had established the international popularity of Martini and Campari). By the 1990s, however, Cinzano's popularity had faded, even in Italy. Since its acquisition, Campari has set about restoring the brand's reputation with significant investment in marketing.
In 2001, Gruppo Campari issued its first public offering, floating the shares which had until then been controlled by Dutch group Wessanen and the Rossi family, and leaving the Garavoglias as the largest shareholders. Also in 2001, the group moved into Brazil with the purchase of a group of local brands from Diageo. The following year, Sardinian wine group Sella & Mosca joined the Campari family, followed by Riccadonna Wines in 2003, and another Italian group, whose products included Aperol and Mondoro. It acquired Glen Grant and Old Smuggler whiskies from Pernod Ricard in 2006.
Last full revision 6th March 2018
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