However, its Curious Drinks was been significantly impacted by the closure of hospitality venues due to the lockdown measures
English wine maker Chapel Down shrugged off widespread closures in the off-trade to grow sales volumes 38% last year, but group results were hit by the weaker performance of its demerged beer and cider arm Curious Drinks.
Despite the group’s wine business losing a third of its trade in the licensed trade and its own retail shop sales due to COVID-19 lockdowns, its English wine sales volume grew by 38% in the year to 31 December 2020 and sparkling wine sales were up over 50%.
Wine and Spirits revenues on a continuing basis were up 32% to £13.3m, with gross profit on a continuing basis up 31% at £5.1m.
Direct to consumer volumes were up 467%, offsetting reduced volumes in the hospitality trade, growing from just 4% of our trade in 2019 to 18%.
Another “excellent” harvest in both quality and quantity in 2020 has enabled it to increase stocks by 12% to £12m.
However, its Curious Drinks was been significantly impacted by the closure of pubs, bars, restaurants and hotels and other hospitality venues and events due to the UK Government imposed lockdowns.
Beer and Cider sales were down 52% at £2.3m with gross profit was down by two thirds at £0.45m from £1.4m as margins were significantly impacted by stock returns and the shift to lower margin bottle sales.
On 9 February 2021 it announced that it intended to dispose of the Curious Drinks to a new company, established at the direction of Risk Capital Partners, which was completed on 23 April.
This meant that combined business made a loss before tax of £7.9m compared to a loss of £4.3m in the previous year, due to Curious Drinks recording a pre-tax loss of £8.8m including an exceptional charge of £6.7m to write down its assets to nil.
Chairman Martin Glenn commented: The extraordinary events of 2020 presented huge challenges to every business. With nearly one third of our wines and spirits and 90% of our Beer and Cider businesses effectively closed, we have had to pivot our business at astonishing pace and make some tough decisions in order to continue to grow our core wine business and the Chapel Down brand. Sadly, that meant having to take the decision to dispose of our beer business to ensure we could focus our energy and resources on our growing wine and spirits business.
English wine is on a high. Building our wine business and brand has taken time and considerable investment over the years. The results are now encouraging. Our wine quality has never been better and enjoys high critical acclaim both at home and abroad. Consumer interest and desire is growing and the English wine category is being increasingly well supported by trade customers. Chapel Down is the best known and leading brand. After twenty years of building, we believe we are in a very good position to further accelerate growth, he said.
He said: We will continue to invest over the coming years to secure more high quality fruit, excellence in our winery operations, improving our commercial and online infrastructure, hiring and training the best talent and creating smarter and more effective marketing to ensure that we build the Chapel Down brand and experience to consolidate our leadership position in this exciting growth market.