I became an honorary Gin Rectifier last night (May 9). I took an oath and now I am duty bound to promote the best interests of gin.
The Italian group, which claims Sagatiba is the market leader in the Brazilian premium cachaça segment, has sold the brand in Latin America under a distribution agreement since March 2010.
According to Campari, the acquisition's cost was US$26m (€18m), but also incorporated an ‘earn-out’ (annual performance-related payment to the seller) calculated at 7.5% of annual sales value, in the eight years after the deal’s closing.
The acquisition is aimed at exploiting the growing premium cachaça category in Brazil which, according to Campari, is driven by “the consistent trading up of local consumers towards premium brands, thanks to higher disposable income and positive demographics”.
A statement by Campari read: “The group adds a high-quality business with relevant upside potential in the attractive Brazilian market and further enhances the group’s local offering in terms of category (covering aperitifs, cachaça, vodka, local whiskies, liqueurs and local brandy) and price points.”
Gruppo Campari's presence in Brazil includes eponymous brand Campari, Cynar, Cinzano, SKYY Vodka and Dreher.
Bob Kunze-Concewitz, chief executive officer said: “The acquisition of Sagatiba, the leading super premium and fastest growing cachaca brand in Brazil, significantly strengthens our brand portfolio in that key emerging market.
“It enables us to tap into the largest segment of the Brazilian spirits market as well as leverage the premiumisation trend being driven by socio-economic improvement.”
Since Sagatiba was founded by Brazilian entrepreneur Marcos de Moraes in 2004, the company has expanded to offer a portfolio of cachaças, including its aged expressions Velha and Preciosa - aimed at an older demographic who drink the spirit neat - and its un-aged Pura, marketed towards younger drinkers.
Sagatiba achieved 112,000 9-litre case volume sales in 2010 – two thirds of which was sold in Brazil - and recorded a CAGR (compound annual growth rate ) of 21.6% during 2005-2010.
Gruppo Campari registered a sales turnover of €589.1 million during the first half of 2011, recording growth of 14.2% and organic growth (growth excluding profits from takeovers, acquisitions or mergers) of 12.2%.
Bob Kunze-Concewitz, chief executive officer, said: “Benefiting from our heightened marketing investments and strengthened route to market, we had another strong quarter with solid double digit growth across organic sales and key operating indicators."
The group’s net profit increased by 8.7% to €75.3m, during the period, buoyed in particular by the growth of Aperol (+52.0%), Wild Turkey (+54.8%) and Cinzano vermouths (+42.0%).
The Americas, which is 32.3% of total group sales, posted overall growth of +8.0%, the Italian market (35.6% of sales) grew by 2.7%, Europe - minus Italy – (23.9% of sales) rose by 30.4%, while the rest of the world (8.2% of sales) saw increases of +75.6%.
Bob Kunze-Concewitz, chief executive officer said: “The strong momentum, founded on a well-balanced growth across geographies, segments and brands also reflects the heightened seasonality of Aperol driven by increased internationalisation.”
The group has reduced its net financial dept from €677m at the end of last year to €669m.