Scottish brewer Tennent Caledonian has won gold, silver and bronze medals at two of the toughest global beer quality competitions – the Monde Selection in Belgium and the International Beer Challenge. Three new brands launched earlier this year fared well, with five medals awarded for Tennent’s Original Export (UK market), Tennent’s Scotch Ale and Tennent’s Extra (Italian market). This success follows a period of extensive investment in Wellpark brewery over recent years, including the installation of a £4 million bottling line and the establishment of the Tennent’sTrainingAcademy.

Master Brewer David Shearer comments: “Our decision to enter some of our beers into global competition for the first time in a number of years is reflective of a renewed confidence and ambition around the Tennent’s brewery at Wellpark. We are really pleased to have been recognised in two of the world’s most prestigious awards this year and I’d like to commend our team for consistently producing the highest quality products for our home market and abroad.”

The awards are good news for Tennent’s and owners C&C Group, as they implement an ambitious export programme for the Tennent’s brands, with a focus on key territories including Ireland, Canada, Australia, Italy and the USA.

The Tennent’s business has been brewing since 1740 at the historic Wellpark Brewery in Glasgow and is today the oldest running commercial concern in the city. The business was purchased by C&C Group in August 2009:

C&C Group, the Irish and UK branded cider and beer business, has increased operating profit before exceptional items by 9% to Eur111.2 million for 2012, despite a 4.8% drop in net revenue to Eur480.8 million. Operating margins improved to 23.1% up 2.9 ppts reflecting the group’s strategic focus on driving brand value and greater operational efficiencies. This operating margin improvement was achieved without reducing the level of brand investment, with C&C Group continuing to invest approximately 13% of net revenue behind its key brands.

The Magners brand delivered positive volume and revenue growth in the competitive cider market in Great Britain and export volume growth of 28% principally driven by North American and Australian markets. The Tennent’s lager brand grew operating profits by 22.5% in the year; with Irish volumes rising by 64%.

Although group volumes declined 10.5%, the positive impact of brand mix reduced the net revenue decline to 4.8%, on a constant currency basis. Both the Republic of Ireland and GB markets experienced on-trade volume declines as consumer sentiment remained weak, while continued off-trade promotional activity and the challenge of new entrants resulted in another competitive year across the cider and beer categories.

Stephen Glancey, chief executive of C&C Group.

However, the group’s well invested brands and market positions enabled it to grow operating profits in the year supported by tight cost control and ongoing innovation. In addition, the group improved its operational efficiencies by securing new third party packaging contracts.

C&C Group has also continued to expand its international cider business during the year with the acquisition of the Hornsby’s brand in the United States and with the contracting of new distribution agreements in key markets for its core Magners brand.

“This has been a robust year for the group,” says Stephen Glancey, chief executive of C&C Group. “C&C is now a focused cider-led LAD business. While we remain cautious about the near term prospects of our core markets, the continuing global growth of the cider category, and C&C’s unique position within the sector, underscore our belief in the prospects of our business. C&C’s balance sheet strength and free cash flow characteristics will enable us to capitalise on organic and acquisition growth opportunities.”

Scotland’s most historic and successful brewery, Tennent Caledonian Breweries, has opened a new £4 million state-of-the-art bottling line at its famous Wellpark site in Glasgow. Situated within Wellpark’s 2000 square metre packaging hall, the new £4 million line gives Tennent Caledonian the largest and most technologically advanced beer bottling operation in Scotland, with the capacity to run 50,000 bottles per hour – for Tennent’s brands and for contract business that will now be attracted to Scotland from across the UK.

Tennent Caledonian, which is now part of cider and beer producer C&C Group, has been brewing for over 450 years. The site also houses Tennent’s Training Academy, a £1 million centre of training excellence for the pub and hospitality industry.

The launch of the bottling line is part of an ambitious plan of growth and development at Tennent Caledonian, resulting from an inward investment programme from C&C Group following its purchase of the business in 2009. The development programme also includes: 50 new jobs created, both at the bottling line and in other areas of the business; a renaissance of the company’s international ambitions, with last year seeing Tennent’s Export once again being shipped to Ireland, Canada, Australia and Italy; and a renewed focus on new product development that has seen the company launch a major new beer for the Scottish market, Caledonia Best, which is made using barley sourced 100 per cent in Scotland.

In Ireland, Tennent’s Lager is now sold in over 1200 pubs. In Canada, Tennent’s was launched at the Toronto Beer Festival in September 2011 and has since gained scale with the support of a local distributor. Similarly, in Australia, Tennent’s was launched last July and is now listed in Australia’s top two leading supermarket chains. 2012 will also see a renewed emphasis on Italy, with the launch of a range of three new beers; Tennent’s Scotch Ale, Tennent’s 1885 Lager and Tennent’s Extra Lager. 

Steven Annand, commercial managing director of Tennent Caledonian, comments: “Tennent’s is a very successful Scottish brand and C&C Group is focused on strengthening its domestic base here in Scotland, growing Tennent’s international markets and creating jobs here in Scotland in the process. Our new bottling line here at Wellpark will underpin this growth story and enable us to introduce new products both here in Scotland and overseas.

Tennent’s Lager is known as an industry pioneer, recognised as being the first commercial lager to be produced to scale in Scotland (and one of the first in the UK) and at the forefront of introducing canned and draught lager to the UK. Tennent Caledonian was one of the pioneers of bottled beer, with a patent for ‘stopped bottles’ secured back in the 1890s.

CAPTION:

Pictured at the launch of the new bottling line are (left to right): Stephen Glancey, group chief executive of C&C Group; Scottish First Minister Alex Salmond, who opened the line; John Gilligan, sales managing director of Tennent Caledonian; and Steven Annand, commercial managing director of Tennent Caledonian.

UK and Irish beverages producer C&C Group has acquired Hornsby’s, the number two domestic US cider brand, from E & J Gallo Winery, for a cash consideration of up to €20 million ($27.5 million). The deal makes C&C the second ranked cider company in the US with an estimated 20% share of a rapidly growing category. The US long alcohol drinks (LAD) market is one of the largest in the world with significant growth potential for cider – cider’s current share of LAD is estimated to be 0.2%.

Hornsby’s complements C&C’s Magners Irish cider brand in the US market. Magners is primarily an on-trade and East Coast brand, whereas Hornsby’s is primarily an off-trade and West Coast brand. C&C will also benefit from a broader portfolio through the combination of a US domestic cider brand with strong brand equity and a premium imported craft Irish cider brand. The deal also presents a significant opportunity for C&C to invest in and grow Hornsby’s volumes in the US and the potential to develop export led growth of the brand.

In the year ended 31st December 2010, Hornsby’s volumes were 61,000 hectolitres and net revenue was $11.7 million. The business is currently delivering low single-digit revenue and volume growth. Based on year to date performance, the business is expected to generate a contribution after marketing of Eur3.6 million in the 12 months to December 2011 before estimated overheads of approximately Eur1.4 million.

Hornsby’s is produced and packaged at Gallo’s winery in Modesto, California. The business does not have its own dedicated sales and marketing resource and as a result, Hornsby’s is managed within the context of the entire Gallo portfolio of brands. Gallo is the largest winery in the world.

According to Stephen Glancey, C&C’s chief executive designate, the acquisition of Hornsby’s “represents a significant step towards the development of the group’s international, cider-led strategy.” He adds: “The Transaction more than doubles our volume in a growing market; broadens the scope of our cider portfolio; and, presents significant opportunity to develop the Hornsby’s brand throughout North America.”

C&C estimates that annual US sales of cider are currently 400,000 to 500,000 hectolitres. US cider category volumes are growing at approximately 20% per annum.

Year-on-year volume growth of 4% for its Magners cider brand, including 3.6% growth in Great Britain and 33.8% export growth, helped C&C Group, the Irish and UK branded alcoholic drinks group, to increase operating profit before exceptional items by 17% to Eur105m in the year ending February 28th 2011. Buoyed by contributions from acquisitions (Tennent’s lager and Gaymers cider), net revenue rose 46% to Eur529.6m.

During the year, C&C Group successfully integrated and delivered synergy benefits from recently acquired businesses as it continued to build momentum behind the Magners brand in Great Britain; while protecting the Bulmers cider brand’s earnings position in Ireland.

John Dunsmore, chief executive of C&C Group.

Operating profit in the original cider business increased 9.0% to Eur71.1m while acquisitions contributed operating profit of Eur29.8m. C&C Group is now effectively debt free having reduced net debt by Eur359m to Eur6m in 2010/11.

“Our principal cider brands, Bulmers and Magners, are in good health. The group’s balance sheet strength and cash generation capability provide us with financial flexibility to invest in the continuing development of our business and to support our brands,” says John Dunsmore, chief executive of C&C Group. “The UK, as the world’s largest cider market, continues to grow and attract new entrants to the category. Magners now enjoys growth and momentum in both the UK and international markets. We intend to protect the strength of the brand with incremental support.”

He adds: “While we have not assumed any pick up in consumer spend within the next twelve months, the shape of our business today should sustain earnings growth.”

C&C Group expects operating profit to grow from Eur100.5m last year to a range of between Eur108m and Eur115m for its current financial year.

Irish and UK cider and beer producer C&C Group has reported that its Magners cider brand in Great Britain is continuing to recover with volumes up and net revenue close to level, arresting the decline of previous years.

In the three months to 30th November last year on year volumes of Magners were up 4.8%. As was the case at the half year, channel mix weighting in favour of the off trade, the absorption of the duty increase and promotional activity in the off trade combined to deflate net revenues by just over 5%. The net volume and price impact leaves net revenues down 0.3% in the quarter, in comparison with minus 5.8% at the half year.

Although economic conditions in its core markets remain unpredictable, C&C remains confident of achieving its previously stated guidance for operating profits in the range of €102m-€106m for the full year.

Reflecting the impact of acquisitions and a return to volume growth of its Magners brand in Great Britain for the first time since 2007, Irish cider producer C&C Group has reported a 29.4% increase in operating profit from continuing operations to Eur63.4m for the six months ended 31st August 2010 on net revenue up 73% to Eur305.5m. Acquisitions contributed operating profit of Eur15.6 m while the group’s disposed spirit business contributed Eur4.5m in the period.

Although the Magners brand grew volume by 1.6% year-on-year, Magner’s Northern Ireland volumes declined by 20.6% and the Bulmer’s volumes declined 3.4% year-on-year in a challenging Republic of Ireland cider market. Operating profit in C&C’s original cider business declined by 1.8% to Eur47.9m. Group operating margin, as a consequence of new acquisitions, declined by 6.9 percentage points to 20.8% of net revenue.

During the first half, C&C disposed of its spirits and liqueurs business to Scotch whisky distiller William Grant & Sons for Eur300m. C&C also completed the integration of acquisitions – the AB Inbev beer business in Northern Ireland and the Gaymer’s cider operation in Great Britain. Indeed, synergy targets have now been revised upwards to Eur8m for 2010/11 and to Eur10m for 2011/12 delivering total cost and revenue synergies of Eur18m.

“Economic conditions in the group’s core markets of Ireland and the UK remain unpredictable and challenging. Consequently, we are appropriately cautious in our outlook. Despite the challenges, we are pleased to report the continued growth of the cider category in the UK and the return to modest volume growth for the Magner’s brand for the first time since 2007,” comments John Dunsmore, chief executive of C&C Group. “We remain confident of delivering to market consensus for operating profit in the range of Eur102-Eur106m for 2010/11.”

Independent Scotch whisky and spirits distiller William Grant & Sons has increased operating profit by 8.8% to £103.6m on turnover up 40.1% to £838.3m for its 2009 financial year. Pre-tax profit dropped from £129m to £114m but this was chiefly due to one-off gains in the previous year resulting from the restructuring of the Maxxium spirits distribution joint venture.

William Grant & Sons’ Scotch whisky brands include Glenfiddich, The Balvenie and Grant’s, while its non-Scotch brands include Sailor Jerry, Hendrick’s Gin and the newly acquired Tullamore Dew Irish whiskey.

“2009 was a good year for the company, thanks to the continued investment behind our core brands, new distribution agreements and our improved route to market,” says Stella David, chief executive of William Grant. “Thanks to our continued success, we have recently been able to acquire Tullamore Dew Irish Whiskey, allowing us to enter the dynamic Irish whiskey category and build another truly iconic brand.”

Tullamore Dew was acquired as part of William Grant’s Eur300m acquisition of the spirits and liqueurs business of Irish and UK cider maker C&C Group in July. The Scottish group subsequently sold the liqueurs business to Campari of Italy for Eur128m.

With sales of 600,000 cases Tullamore Dew is the world’s second largest Irish whiskey brand and provides William Grant with the opportunity to accelerate growth in non-Scotch business.

Italian drinks producer Gruppo Campari is acquiring the Carolans, Frangelico and Irish Mist brands from William Grant & Sons, the Scotch whisky distiller. The acquisition reinforces Campari’s position as a fast growing company in the US and key international premium spirits markets.

The enterprise value of the acquired business is Eur128.2m, corresponding to 7.5 times the pro forma EBIDTA 2009 (inclusive of the distribution margins of the Frangelico brand in the US). The transaction is expected to close on October 1st 2010 and the consideration will be fully self-financed. Overall the acquired business is expected to contribute about 1 million nine-litre cases and net sales of Eur50m on an annual basis.

Bob Kunze-Concewitz, chief executive of Campari.

“With Carolans, Frangelico and Irish Mist we add a high-quality and profitable business with upside potential and further enhance the group’s premium offering. In particular, we increase our critical mass in the highly-profitable US market and strengthen our exposure to a number of key international markets, including Australia, Russia, Canada, Spain and the UK,” says Bob Kunze-Concewitz, chief executive of Campari. “This acquisition represents a perfect fit in our acquisition framework, in business and financial terms. Moreover, it will benefit from low risk and easy integration, as we already account for 60% of the acquired portfolio volume and we are the global source for Frangelico.”

The Carolans, Frangelico and Irish Mist brands only recently became part of the William Grant portfolio following the company’s Eur300m acquisition of the spirits and liqueurs business of Irish and UK cider maker C&C Group in July 2010. The acquisition netted William Grant Tullamore Dew, the world’s second largest Irish whiskey brand with sales of over 600,000 cases worldwide, which has now become the Scotch group’s sixth core brand.

Premium spirits business and independent Scottish family distiller, William Grant & Sons, has established its new global marketing office in Dublin. Employing 17 people, this office will manage the entire global marketing operations for William Grant & Sons’ non-Scotch brands including Sailor Jerry, Hendrick’s Gin and the newly acquired Tullamore Dew Irish whiskey, and will work alongside the company’s existing global marketing office in Richmond, London. The Dublin office will also lead the group’s global planning and innovation function.

William Grant & Sons’ global marketing office in the UK will continue to manage the company’s Scotch whisky brands Glenfiddich, The Balvenie and Grant’s. Both offices will be overseen by group marketing director Maurice Doyle.

Following the Eur300m acquisition in July of C&C’s portfolio of Irish spirits and liqueur brands, this move greatly strengthens William Grant & Sons’ presence in Ireland. A key focus of the marketing activities will centre on the development of the Tullamore Dew brand, which as the group’s sixth core brand is poised for significant growth. William Grant & Sons is currently commissioning an international TV, print and outdoor advertising campaign for Tullamore Dew which will be managed from Dublin.

Stella David, chief executive of William Grant & Sons.

“Our recent acquisition of Irish brands focusing on Tullamore Dew is now well embedded within the group and we look forward to strong growth over the next 12-18 months,” says Stella David, chief executive of William Grant & Sons.

Tullamore Dew is world’s second largest Irish whiskey brand, selling over 600,000 cases worldwide. Hendrick’s is the world’s fastest growing super premium gin with key markets in the US, UK and Spain, while Sailor Jerry Spiced Rum is part of a fast growing brand franchise inspired by tattoo artist Norman ‘Sailor Jerry’ Collins.