Berry Bros & Rudd has heralded a ‘solid year of consolidation’ that saw sales at the upmarket wine and spirits retailer surge by £16m.
Turnover at the London business grew 9.4% to £186m (excluding the accounting adjustment for en primeur sales) over the year ending 31 March 2018, its latest results reveal.
However, operating profits were down 78% to £1.6m due to “a reduced gross profit in our UK business driven by mix” and increased depreciation as a result of investing in IT.
Nevertheless, exceptional items such as the sale of The Glenrothes whisky brand to Edrington and that of Anchor Brewing - of which Berry Bros was a major shareholder - to Japanese beer giant Sapporo, meant Berry Bros & Rudd ended the year with pre-tax profits of £46.5m, compared with a loss of £4.7m last year.
Berry Bros had “restructured the balance sheet” CEO Dan Jago told The Grocer. “It has been an incredibly solid year of consolidation and we’re continuing to invest in the infrastructure of the business, making sure that we’re sourcing great people to look after what is a complex business because of the number of different channels we sell into.
“The London on-trade has been tough, but our national accounts, regional merchants and agency business is very strong.”
Berry Bros would now look to make “considered investments around people, IT and distribution” Jago added. “We’re investing more and more in our own vans, for instance, because we believe being able to do the final mile ourselves, and spending more on digital and understanding our customers.”
Jago went on to warn that “instability of the market” would be a key challenge “for any business that supplies or produces alcohol” .
He said: “Through Brexit and beyond, the drinks industry is not in a solid and secure place due to external influences. There is also a climate of consumers wanting to drink less but better - although for a business like ours that is a real opportunity because we are a premium retailer and a top-end brand.”
More own-label spirits are on the cards following the launch of Berry Bros’ four-strong ‘classics’ range of whiskies and the resurrection of its own-label London Dry Gin earlier this year.
“There is going to be lots of work on spirits after the performance we’ve seen on those ranges,” according to Jago. “The gin has been so well received that we are now looking quite carefully at logical range extensions and things we could do that would be a bit different.
“We’re really happy to try stuff out because there is not a 50-man NPD and marketing department who won’t let anything get through unless it ticks all the boxes. We’re going to add to the Berry’s Own wine selection this year as well, but wine is less about innovation and NPD. It’s about doing a brilliant job with the classics.”
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