- Sales in closing three months of 2023 climb 5.1% to CLP259.38bn (US$268.8m) – on reported basis, not organic
- Q4 reverses nine-month sales slide of 7.4%
- Full-year reported top-line declines 3.8%, totalling CLP837.21bn ($867.5m)
Having anticipated a return to growth back in August, the Chile-headquartered group saw its sales in the third quarter, to the end of September, slip by almost 5%. Yesterday, however, the Casillero del Diablo brand owner posted a top-line rise of 5.1%, although this wasn’t enough to restore the full-year sales rate to positive territory.
Editor’s note: Concha y Toro’s results are presented in reported terms rather than organic, meaning ForEx fluctuations are included.
The main driver of the quarterly lift was Europe, where sales soared by 23.8% on the corresponding three months a year earlier. Indeed, the UK – Concha’s largest market – warranted a namecheck for a 34% leap in sales. Specific reasons for the jump were not shared, although more generally, the company credited “all of the measures and strategies [we have] implemented in the last year to recover volumes, against a backdrop of decelerating consumption and adjustments following the focus on finished product inventory reduction among our distributors and key retailers”.
Over in the US & Canada, which combined account for 16% of group sales, the former came in down 19% in sales by value on an 11.6% volumes dip, The forementioned inventory situation in the US coincided with “the adjustment in consumption observed on an industry level in the local market, with lower sales volumes especially among sub-US$10 segments”.
Turning to the full year, wine exports – which do not include the US performance – dipped by almost 3% as volumes declined by 5.2%. Sales in Europe rose 5.7% thanks in part to the UK’s impressive recovery.
While much continues to be made by Concha of its premiumisation strategy, an accelerated consumer appetite for “mass-market” wine in the company’s domestic market was observed for last year. Meanwhile, the US performance in 2023 – +15.4% in value, -10.7% in volume – was defined not only by distributor inventory moves but also by lower sales of cheaper wine as well as “in categories above US$20”.
Elsewhere in the results announcement, Concha flagged a one-off $7.2m expense in Q4, which was “related to a judicial contingency in the US”. Further details were not provided, although Global Drinks Intel has requested further clarification.
“In the face of the complex global situation resulting from high interest rates, increased inflation, weak consumption, and elevated inventory levels, the company’s performance showed sustained improvement throughout the year, ending with record sales in the fourth quarter and increased market share in priority countries,” said CEO Eduardo Guilisasti. “As a whole, 2023 was a particularly challenging year for the global wine industry due to the complex prevailing economic conditions.
“For 2024 we see a better scenario, with growth in volume and value at a consolidated level.”
