From wave to wave

Henkell Freixenet is steering a solid course through the Corona pandemic. Concentration on core brands remains the guiding principle.

Plus: Interview with Dr. Andreas Brokemper, spokesman of the executive board. Go to interview

The Henkell Freixenet head office in Wiesbaden / Credit: Henkell Freixenet
The Henkell Freixenet head office in Wiesbaden / Credit: Henkell Freixenet

The Oetker Group has bundled its sparkling wine, wine and spirits activities under the umbrella of Henkell Freixenet. In the 2020 financial year, the group achieved sales of €1.195 billion, a lower-than-expected decline of 7.4 percent in view of the Corona pandemic. Adjusted for consolidation and exchange rate effects, the decline is reduced to 6.5 percent. After deducting the tax on sparkling wine and spirits, Group turnover was €972 million, compared to €1.056 billion in 2019. 

The group wants to stick to its strategy and continue to focus on global (Global Heros) and strong local (Local Heros) brands, as Dr. Andreas Brokemper, spokesman of the executive board, explained in an interview with Meininger's Wine Business International. This also includes brands in the portfolio that are not needed, such as Deinhard, or business areas, such as production in Ukraine, which will be sold off.

Due to the structure of the company, with its worldwide activities in both production and distribution, subsidiaries in 30 countries, and sales in 150 countries around the world, the situation in the national markets can be assessed very differently. Brokemper outlines the challenges the company faced in the Corona pandemic.

 

Strong off-trade, weak on-trade

Two main market- and consumer-specific factors had an impact on the Group's business. In countries of the core region of Germany, Austria and Switzerland (DACH region) with a high share of sales through food retailers, which were booming during the pandemic, sales of the sparkling wine and spirits brands were maintained at a high level. In the DACH region, Henkell Freixent achieved sales of €304 million, which corresponds to an increase of 1.1 percent. The Group also did well in England, where wine series such as "I heart" or brands such as "Freixenet Prosecco" made good gains.

On the other hand, the company had to record losses in sales and turnover everywhere where the consumption of wine, sparkling wine and spirits mainly takes place in the gastronomy sector, which applies to a large extent to Freixenet's core sales region Spain, but also Italy (Mionetto Prosecco) and France (Champagne Alfred Gratien and various Cremants). In addition to the temporary closure of the gastronomy sector, the loss of tourist consumption and sales during travel also had an impact on the group. Spain, Brokemper explained, had 80 million tourist arrivals before the pandemic, which were reduced to 20 million in 2020. 

In line with the country-specific conditions, the sales achieved in 2020 also fell by region. In addition to the above-mentioned DACH region, these are: Western Europe with a decline in sales of 10.2 percent to €323 million, Eastern Europe with a slight decrease of 5.4 percent to €165 million, the Americas (USA, Mexico, Canada) with a significant decrease of 20.2 percent to €133 million, and the Asia/Pacific region with a decrease in sales of 15.9 percent to €42 million.

In the USA the group, which in addition to distributing Mionetto and Freixenet products is also active there with production plants from the Freixenet portfolio in California (Gloria Ferrer) and Mexico (Finca Sala Vivé), was affected not only by the lockdown in the catering industry but also by the specific three-tier system with intermediary importers and distributors in sales. Despite all the difficulties, Brokemper was also able to report some highlights, such as the Freixenet brand setting a sales record in 2020 with 99.3 million bottles.

Despite the Corona-related losses, Henkell Freixenet claims the position as world market leader in sales and turnover of sparkling wine with a world market share of 8.5 percent (by sales) and 9.7 percent (by turnover). In 2020, the Group employed 3,494 people worldwide, slightly fewer than in the previous year due to the sale of parts of the company and the closure of the site in Ukraine. In Germany, Henkell Freixenet employed 616 people, slightly more than in 2019. hp

Key sales figures of Henkell Freixenet at a glance / Graphi: Henkell Freixenet

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