Campari Sales Slump as the Company Struggles to Maintain Its Viral Phase

Campari bottle is seen in Milan, Italy on May 20, 2024. (Photo: Jakub Porzycki/NurPhoto via AP)

On Wednesday, Italian spirits giant Campari Group announced its first revenue decline in over three years. The 18.2% operating profit drop came in around 80 million euros short of what investors expected from the company, signaling a change in pace as the brand struggles to reclaim the viral popularity that has propelled it through the 2020s thus far.

In a post-results conference call, the company blamed “macroeconomic weakness, poor weather” and “pressure on disposable income from inflation.” Interim co-CEO Paolo Marchesini added, per Reuters; “I think probably we have maybe underestimated the level of disruption at the level of consumer confidence.”

In light of the dour earnings, Campari Group says it will streamline its portfolio by disposing of “non-core brands.”

The company owns a varied catalog including SKYY Vodka, Espolon Tequila, Wild Turkey Whiskey, Courvoisier Cognac and Appleton Estate Rum. Its two most prolific products are its namesake liqueur, Campari, and its sister brand, Aperol.

Both of its flagship products witnessed stellar performance over the past few years, thanks in no small part to Internet word-of-mouth.

Between May and September, there wasn’t a trendy brunch spot in sight without at least a dozen orange-garnished Aperol Spritzes on the table. Sales of the bitter aperitif grew by 50% in 2022 alone. Ex-Campari CEO Bob Kunze-Concewitz attributed the growth to an unlikely source — HBO’s “The White Lotus,” a show in which the Aperol Spritz was equally ubiquitous with sex, lies, murder and sunny Italian vistas.

“The White Lotus” Season 2 had a hand in relaunching the Aperol Spritz trend as we know it today. (Photo: HBO)

Campari had its own breakout moment thanks to an HBO show, as well. In an interview promoting “House of the Dragon” in 2022, actor Emma D’Arcy offhandedly mentioned that a Negroni Sbagliato was their “seductive” drink of choice. The ensuing TikTok craze skyrocketed orders of the Prosecco, sweet vermouth and Campari cocktails at bars worldwide.

Campari Group is now tasked with translating the trends into long-term results.

Executives told The Wall Street Journal last month that they hoped to “deseasonalize” the appeal of Aperol. Popular as the red aperitif may be, common sense tells us that Aperol is associated with bright, summer occasions and not the depths of winter. Whether or not the brand can succeed year-round is of vital importance to the company; the liqueur comprised 24% of Campari Group’s sales in 2023, up from 4% just two decades prior. A 5% growth slump earlier this year was chalked up to “dreary weather” in Italy, France and Britain, per the WSJ.

Campari Group reported a 1.4% sales drop across its entire portfolio earlier this week. Chances are, the company will lean harder on Aperol and Campari alongside its tequila and whiskey offerings to overcome the slump.