Global Drinks Intel: Campari Group had a storming 2023 and was the only listed multinational spirits brand owner to break double digits for sales growth.
Campari Group CEO Bob Kunze-Concewitz: The important thing is that our portfolio is skewed towards the categories that are doing the best: It’s bourbon, it’s tequila and it’s aperitifs, but we drove the last one. We’re positioned perfectly amongst both the high-ABV classic cocktails and the lower-ABV, easy-to-drink long drinks.
We’re also a company that really believes in consistency, in investments, messaging and, most importantly, in strategy. One analyst asked me today if I was afraid that Aperol is 24% of group sales, and it’s only one drink. That’s exactly the reason why it’s successful. We didn’t launch any flankers, we didn’t do any of those things that bring volume in the short term but could really hurt it in the mid to long term.
We have a very single-minded proposition, which is the Aperol Spritz and we’re absolutely crazy about it.
You need to understand the penetration numbers, In Italy, for example, two-thirds of [alcohol] volume comes from beer and Aperol has only 1.2% of the penetration of beer. If you set Aperol’s penetration in Italy to index 100, the next biggest market is Germany at 45% of Italy’s penetration. In the US, which is now Aperol’s third largest market, the brand’s penetration is only 4% of Italy’s.
Marketers usually get bored very quickly – They have to innovate and change things. We believe in consistency. It’s not that we stop investing behind brands or change the messaging because of something like Covid. We stick to our guns and go through it. What you reap is the sum of all the things you’ve been doing over years.
Some of our competitors are saying they’re going to increase their A&P this year. I say good for them, but what matters is not the A&P in one year, it’s the consistency of the A&P and the messaging over the years. It’s the cumulative effect that makes the difference.
GDI: Is it your responsibility to reign in your marketing department’s exuberance?
BKC: Absolutely. At the same time, I need to ensure that once we have a proven successful model that’s been developed in one market, they then apply that model exactly in every single market and that they don’t try to reinvent the wheel.
GDI: You made some excited noises about the Espolòn tequila brand, which you’re about to add to the group’s list of ‘Global Priority’ brands.
BKC: What enables that to happen is a brand’s potential globally. We’ve always believed that Espolòn has global potential, but we were capacity constrained. The US was absorbing every additional case we produced.
We undertook a significant investment, which tripled our distillation capability, so now we can start building the brand across international markets. Now that we have that capacity, Espolòn becomes a priority because markets know they have the volumes to go for it.
GDI: On the cognac side, what growth expectations do you have for Courvoisier [acquired in December from Beam Suntory for US$1.32bn]?
BKC: It wouldn’t be unrealistic [to expect double-digit growth], it’s more a question of timing. This is clearly a brand that hadn’t received much focus or tender loving care [under Beam Suntory].
There’s a lot of work to be done. We need to premiumise the brand, we need to work on the range and we need to work on the packaging. We also need to get back to hammering what the brand stands for. All of that is going to take time.
On a value basis, with price/mix in the mid to long term, I don’t see why not.
Courvoisier’s also a brand that has quite a bit of geographical opportunity – It’s really concentrated in the US and the UK right now, but hardly has any presence in Asia, which is a very big cognac market.
GDI: The results statement also referenced a continued interest in M&A. You’ve spent it all, haven’t you?
BKC: No. Even post-Courvoisier, we still have the appetite and capacity to make more acquisitions.
GDI: In which category or geography?
BKC: Our focus will remain on aged, premium, brown spirits with a skew to the US and Asia.
GDI: Does the theory still apply that a multinational spirits brand owner needs to have presence in every spirits category?
BKC: I think it makes sense. If you’re in the business for the long term, you need to have more than one leg. With the aperitfs, bourbon and tequila, we’ve built three legs. Now, cognac’s going to be our fourth leg.
GDI: There’s a lot of portfolio consolidation going on among your peers in spirits at the moment.
BKC: There’s a certain tail that we’ll also dispose of over time. We’re constantly looking at rearranging our portfolio. Over the years, we got out of wine, we got out of soft drinks, we got out of our Irish portfolio [selling Carolans and Irish Mist to Heaven Hill Brands in 2017]. So. this is normal over the course of time.
GDI: It’s also a buyers’ market.
BKC: The market is normalising because at a certain point, the multiples have gotten out of whack. It’s easy to overpay when money’s free. Today, money is not free and that obviously impacts multiples.
If you’re in the business for the long term, then when the right asset comes up, you make sure you try to bring it home.
GDI: What has been the one question that surprised you the most on your round of post-results calls today?
BKC: Nothing really surprised me. When you’ve been doing this for 17 years, you get the hang of it.
GDI: Are you ready to go yet? [Kunze-Concewitz announced in September that he will step down as CEO on 11 April, to be replaced by current Asia Pacific MD Matteo Fantacchiotti]
BKC: I’m really looking forward to starting this new chapter, which I’ve been planning for a long time and is now in its execution phase. I’m happy that I can afford to do it from a health and financial standpoint.
Clearly, I’m sad, because this is a family here and I’ve built strong relationships with our people. I’m going to miss the people, that’s for sure.
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- AB InBev
- Bacardi
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- Diageo
- Moët Hennessy
- Pernod Ricard
- Proximo Spirits
- Suntory Global Spirits
- William Grant & Sons
