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BELUGA GROUP announces its operational results for the first 9 months of 2020

08
october 2020

BELUGA GROUP announces its operational results for the first 9 months of 2020

  • The company's overall sales showed a positive trend of 11.4% 
  • The sales of the company's own brands grew by 8.1%
  • The sales of imported brands increased by 41.8%

BELUGA GROUP, Russia's largest alcohol company, announces that its overall sales grew by 11.4% in the first 9 months of 2020, amounting to 11,6 mln 9L cases. Sales of the company's own brands increased by 8.1% up to 10,1 mln 9L cases, while sales of imported brands increased by 41.8% up to 1,5 mln 9L cases.

Of the company's own brands, Arkhangelskaya and Belenkaya vodkas showed significant upward: during the reporting period, the sales of the former grew by over 85%, and those of the latter rose by 20%. Fox & Dogs whiskey also performed solidly, increasing sales by over 60%. Year-to-date, sales of partner brands exclusively represented in Russia by BELUGA GROUP have increased steadily, with Barcelo rum, Torres brandy, and Grant’s whisky as the main drivers. The wine line continues to grow organically, with Torres, Faustino, Barefoot, Cono Sur, and Masi demonstrating the best dynamics. The volume of shipments was also influenced by the sales of the Armenian brandy Noy and the Portuguese wine Mateus, which were included in the group's imported portfolio in H1.

The super-premium vodka Beluga—the company's flagship brand—has strengthened its position in the United States with a 38.5% increase, its best result in this market since launch. These figures have grown in all key states: +28.7% in California, +65.4% in New York, +23% in Florida. The brand has also strengthened its position in Germany, Poland, and Australia.

The WineLab retail chain has continued to develop. The number of outlets now exceeds 620, total sales have increased by 49.9% compared to the same period in 2019, and like-for-like sales have grown by 23.5%. The average ticket in the chain for the period increased by 10.7%. The company is focused on evolving its omni-channel model, in which retail outlets form the backbone of online sales. As such, sales through the click & collect system increased more than five times compared to the same period of last year, and the share of e-commerce sales (in the click & collect format) within the chain's total revenue increased to 2.3% by September 2020 (0.6% in September 2019). In Moscow and St. Petersburg, the share increased to 5.3% (up from 1.9% a year earlier).

Alexander Mechetin, Chief Executive Officer of BELUGA GROUP, commented on the results: “The company has shown stable growth over the first nine months of this difficult year. The group takes a leading position in production in all key categories of strong spirits. It is successfully developing its own brands and launching new products both within existing lines, such as Arkhangelskaya Bitter Extract and Arkhangelskaya Garlic and Pepper, as well as launching innovations like Orthodox and Parka vodkas and Tête de Cheval premium sparkling wine. We keep representing partner brands at high level and it leads to increase of their sales volumes. We also continue to conclude contracts with producers of world-famous brands, such as for Noy cognacs and Mateus wines this year.

BELUGA GROUP is a vertically integrated business, which means that we control the whole process from the product making till it’s placement on store shelves. Our WineLab retail chain is making an increasing contribution to the distribution by boosting sales of our own brands, especially through its click & collect system. The control and management over all processes alongside with the diversification of our business, which involves not only the production of our own brands but also the development of our import and export operations allows us to stay flexible and adapt our working approach in response to external constraints and the turbulence of the current period. The results of 2019 allowed the group to be the only one of all alcohol players to enter the 200 largest private companies in Russia according to the Forbes rating published in September.

Beluga continued to develop in the US market, which saw an increase in sales due to improved brand exposure, verified trade marketing, and digital activations. The brand's rise in popularity is also evidenced by the fact that it featured in Christopher Nolan's recently released Tenet, as well as in music videos by Jennifer Lopez & Maluma and Sia & David Guetta.

The company has been paying greater focus to corporate governance and the investment attractiveness of its business. For example, a new dividend policy was adopted in September that determined the size and procedure for the payment of dividends. The payment of interim dividends was also announced for the first half of 2020.

We have big plans for the future. We have been actively integrating advanced technologies into various business processes. We are significantly modernizing our production base by implementing 'lean manufacturing' and using IT tools, AI, and machine learning to analyze the efficiency of factories, logistics, sales, and our own retail.

These changes allow us to build a modern company with a unique business model that has no analogs in Russia. We combine a strong portfolio of brands, major import contracts, and in-house retail with high-tech manufacturing, logistics, and distribution. This strategy will allow the company to strengthen its leadership position in the market, make the best offers to connoisseurs of our brands, and increase value in the interests of all stakeholders."

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