After disposing of its beer and cider business, Kent-based Chapel Down delivered healthy results for the year to December 2022 as a purely wine-focused company. Revenue rose by 10% over the 12 months but accelerated in the second half to 14%, providing extra momentum moving into the current financial year.
The record result of £15.6 million ($19.4 million) was led by sparkling wine with a 70% share by value. The winery makes it fizz using the ‘Méthode Traditionnelle’ as used by Champagne region producers in France, helping to enhance its image.
Profitability has been a focus for CEO Andrew Carter and, given Chapel Down’s brand awareness and a 33% share of the English off-trade wine market (according to Nielsen), he has pushed the premiumisation of the brand. This has paid off with an increase of 51% in operating profit to £1.7 million ($2.1 million), though price increases have played their part.
In a statement, Carter said: “Our average selling prices to customers grew by 19% in the year. This was driven in part by prices increasing to help offset inflationary cost pressures, but more significantly by a changing mix of sales as we focus on the sale of higher-priced traditional method sparkling wines. Consumers are looking for premium drinks brands that are exciting, fresh and have real provenance. ”
A limited supply of Champagne stocks due to reduced yields in recent years, has given high-end sparkling wine a route into this end of the market, and other English producers, like Gusbourne, Langham, and Ridgeview, have also been taking advantage.
Following Chapel Down’s carve-out of the Curious Drinks Brewery in April 2021—bought by Risk Capital Partners—the company has capitalized on the continuing interest in English wine, and sparkling in particular. In 2022, traditional method sparkling wine sales rocketed by 53% to £9.6 million ($11.8 million)—versus an already strong 2021—to reach a record volume of almost 800,000 bottles sold.
Chapel Down chairman Martin Glenn said: “English wine is on a high. Building our wine business and brand has taken time and considerable investment over the years. After 20 years of building, we believe we are in a very good position to further accelerate growth.”
Raising its profile as well as a glass
Chapel Down has long been a sponsor of the Oxford-Cambridge men’s and women’s boat races (which took place last weekend) on the River Thames, and in 2022 the company also became the official sparkling wine of the England and Wales Cricket Board (ECB). This tie-up gives the brand significant television exposure and access to a new, more international consumer audience. And for the Coronation of King Charles III, the company has created a limited edition vintage sparkling wine.
The export business is also part of Chapel Down’s premiumization push. It remain small at £456,000 but grew by over 160% last year and is earmarked for future long-term expansion. Wines are now exported to 14 markets, with an eye on the largest sparkling wine export hubs like the USA and Scandinavia, as well as developing the global travel retail airport channel which will become an international shop-window for the brand.
“We focus on traditional method sparkling wine almost exclusively in the export channel and this accounted for 96% of all exports by revenue,” said Carter, who added: “In 2023, we will continue to invest in premiumizing and growing the Chapel Down brand and range.”
Further along, Chapel Down has plans to double the size of its business by 2026 by taking advantage of the English wine industry’s popularity, which shows no sign of abating.
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