“Deep promotions” helped sales of Chapel Down sparkling wines grow by 38% in the run-up to Christmas, its CEO has said.
Speaking to The Grocer, Chapel Down boss Andrew Carter said discounts helped to drive “exceptional rate of sale” in the four weeks to 28 December.
Explaining the decision to offer discounts that took the rsp of some of its sparkling wines as low as £22 per 70cl bottle (before category promotions run by retailers), Carter said: “We’ve got to win at Christmas. That six weeks of the year is 30% of annual sales. We knew we wanted to come out as brand leader and win.”
On further promotions offered by retailers – Sainsbury’s ‘Buy Six Save 25%’ offer took Chapel Down Brut down to just £16 per bottle – Carter added: “Ideally, as a brand, we don’t want to be doing category promotion on top, but clearly we don’t fund it. The consumer gets even greater value; they’re getting world class wines at pricing that is lower than we’d ideally like.”
Retailers ordering ‘regularly’
Promotions helped Chapel Down improve on the 36% decline in sales into retail it reported in the six months to June. The Kent-based winemaker recorded flat year-on-year off-trade sales in H2, resulting in full-year decline of 19%.
Retailers were now ordering “completely regularly” following the “one-off” build-up that contributed to Chapel Down’s first half sales dip, Carter said.
“NIQ sales value growth was up 4% for the full year on sparkling wine, which is a very big difference to the -19% coming out of the winery,” he added.
Chapel Down’s full year net sales revenue (NSR) excluding duty and retrospective discount support fell by 5% to £16.3m, in line with the supplier’s previous, downgraded guidance. Excluding the now-exited spirits business, NSR fell by 3%.
Net debt, meanwhile, climbed from £1.2m to £9.2m after Chapel Down planted 118 acres of new vines, as well as increasing stock levels following an exceptional harvest in 2023.
Chapel Down had “no concerns” about the growing debt, Carter insisted. “It’s offset by the fact that you’ll see an increase in asset value and stock for the future,” he added.
Is Chapel Down still up for sale?
Asked about the decision to end a strategic review that could have resulted in the sale of the AIM-listed business, Chapel Down’s outgoing CEO said: “There was and continues to be a huge amount of interest in our business. But it wasn’t the right thing for our shareholders, or the right time to take on anything from any strategic investor.”
Chapel Down would continue to “explore options” including institutional and strategic investment, Carter said. However, the company remained “well geared and placed to grow into the next five years” in light of its ongoing £20m revolving credit facility, he added.
Chapel Down shares were up 1% to 37p in mid-morning trading.
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