Davide Campari-Milano, the Italian distiller known for its popular aperitif brands Aperol and Campari, has revealed plans for potential acquisitions. With a successful track record of completing 11 deals over the past five years, the company is now considering larger-scale purchases as part of its long-term strategy.
Chief Executive Bob Kunze-Concewitz expressed his enthusiasm for pursuing bigger opportunities. Kunze-Concewitz believes that the effort required for an acquisition is the same regardless of the company’s size, making larger deals an attractive option. However, he acknowledged that time will ultimately determine the outcome of these acquisition plans.
The possibility of a significant acquisition could coincide with the conclusion of Kunze-Concewitz’s role as CEO. After serving in the position for 16 years, his tenure is set to end in April of next year. As a leader with a keen interest in deal making, Kunze-Concewitz aims to leave behind a company that embraces growth opportunities through acquisitions.
Campari’s recent change in shareholding structure has further enhanced its potential for expanding its portfolio. In August, Lagfin, the controlling shareholder, increased its voting rights from 68.6% to 84.0%, granting the company greater financial flexibility. By converting some of its shares, Lagfin paved the way for pursuing external growth prospects.
Kunze-Concewitz highlighted the benefits of Campari’s capital structure and loyalty shares, stating that the company could potentially raise up to €25 billion without losing control to its majority shareholder. This indicates the strength and stability of the company’s financial position.
While specific segments for potential acquisitions were not disclosed, it is clear that Campari’s CEO has ruled out expanding into premixed cocktails. As the company explores new opportunities, it remains committed to its core products and its reputation as a leading player in the beverage industry.
Only time will reveal whether Campari-Milano’s pipeline of potential acquisitions will materialize into tangible additions to its brand portfolio. With a strong foundation and a clear vision for growth, the company is poised to make strategic moves that will shape its future.
The Future of Ready-to-Drink Cocktails
French drinks group Pernod Ricard plans to launch a ready-to-drink cocktail in collaboration with Coca-Cola next year. The cocktail will be made using the popular vodka brand Absolut and the sparkling soft drink Sprite. However, Bob Kunze-Concewitz, CEO of Campari, one of Pernod Ricard’s competitors, has expressed skepticism about this trend.
Kunze-Concewitz believes that while spirits-based ready-to-drink cocktails may experience short-term success, they can ultimately harm the reputation of the brand in the long run. He explains that consumers quickly tire of the taste, which then requires the company to continuously introduce new flavors in order to sustain growth.
In other news, Matteo Fantacchiotti, currently the managing director in Asia Pacific for Campari, has been appointed as the deputy CEO. Eventually, he will assume the role of CEO once Kunze-Concewitz retires. However, Kunze-Concewitz assures that even with a change in leadership, the core capabilities of the company will remain intact.
In its latest quarterly update, Campari reported a 4.4% organic growth, which fell below analysts’ expectations of 8.5%. This news caused a significant drop in the company’s stock price. Kunze-Concewitz believes that there has been an overreaction to their results and states that Campari is still performing well compared to its reference markets.
Looking ahead, Kunze-Concewitz emphasizes that Campari is focused on long-term success. The company’s performance next year will depend on various external factors such as the overall economic environment and consumer confidence. If conditions are unfavorable, Campari aims to achieve high-single-digit growth. However, if the environment becomes more positive with increased consumer confidence and lower interest rates, growth in the low-double digits is also a possibility.
Overall, Campari remains optimistic about its future prospects and is committed to navigating the ever-changing market landscape.