UK spirits marketing and distribution specialist Hi-Spirits has reported 9.3% turnover growth to 16.5m, 12.4% gross profit growth to £3.72m and 166% operating profit growth to £417k for the year to 31 March 2015.
The company, which distributes brands such as Antica Sambuca, Buffalo Trace bourbon, and Brokers Gin, has also reported sales for the first two months of the current financial year up by 35% versus the same period last year.
Hi-Spirits managing director Dan Bolton said: “After an exceptional year last year, we are continuing our solid growth with all channels in double digit percentage growth on last year. The on-trade, which has always been the foundation of our business, is looking particularly strong, at 45% ahead of 2014.”
Gathering pace
Sales growth through both managed pub and bar operators and, increasingly, casual dining brands expanding their spirits and cocktail offers, has been key to Hi-Spirits’ success. “We have seen some very strong on-trade growth in the past 18 months, which I put down to a steely focus on spirits range planning and service by operators, as well as the continued increase in consumer confidence. From our perspective, this on-trade market positivity is definitely gathering pace.”
Potential of casual dining sector
Bolton expects the casual dining sector to continue to develop in importance to Hi-Spirits. “We have been tracking the economic and market data, and combining it with feedback from our UK-wide sales force and it is clear the casual dining sector is a key growth area and one we are well placed to focus our efforts on.
“Cocktails and other serves that can be paired with food are becoming increasingly important for the consumer, and operators are striving to offer something unique and interesting to their customers. With the majority of our on-trade sales force coming from the bartending industry, they are well placed to offer the perfect solution to these requirements, both in terms of our brand portfolio and the training support we provide.”
New brands and organic growth
Sales expansion has come from both new brands and through organic growth of the existing portfolio, added Bolton: “Our portfolio continues to go from strength to strength. Antica Sambuca is the UK’s number one Sambuca brand, having grown on average by 7% every year for the past five years, a phenomenal performance and one that is propping up the category single handed.”
Alongside impressive growth of Antica Sambuca, Bolton said the company had recorded even stronger growth of other brands. “Whilst Antica Sambuca will always remain a top priority in the business, over the past few years we’ve worked tirelessly at bringing on new brands that consumers want and that opportunities already exist for. One of the standout performers amongst these new brands is Fireball, which is the fastest growing spirit brand in the US. By the end of 2014 we saw a 32% increase in volume compared to 2013, which has come from the on-trade as well as some key multiple retail listings, showing just how popular this brand has become in the UK.”
Off-trade
Bolton added that the multiple retail channel is going from strength to strength for the company overall: “Whilst the on-trade channel continues to grow for us, we’ve also been working hard at developing our off-trade business. Over the past couple of years we have seen enormous growth – both in terms of listings and volume – in the multiple retail channel, all at a time when shelf space is more and more at a premium.
“The key for us is to generate demand in one channel and use it to sell successfully in the other. For example, we had great success with Red Leg spiced rum in the on-trade, which culminated in a key listing in Sainsbury’s last month which launched with much success. This approach is fundamental to our business – we find the opportunities first and create a solution to them. For a product to be popular in the supermarkets there needs to be some brand awareness and popularity.”
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