BELUGA GROUP announces operating results for Q4 and full 2020
- The company's overall sales totaled 17 369K 9L cases, a 10.7 % increase from last year,
- The sales of the company's own products grew by 6.9%, reaching 14 982K 9L cases,
- The sales of imported brands increased by 42.1% to 2 387K 9L cases.
In the Q4, overall sales increased by 9.3% reaching 5 807K 9L cases, and sales of the company’s own brands grew by 4.7% up to 4 894K 9L cases in comparison to the same period of 2019. Sales of imported partner brands totaled 912K 9L cases, a 42.8% increase year-on-year. Impressive results were demonstrated by Belenkaya and Arkhangelskaya in-house brands in vodka category, Zolotoy Reserve in Russian brandy, Fox & Dogs in whiskey and Green Baboon in gin.
Alexander Mechetin, Chief Executive Officer of BELUGA GROUP, commented on the results: "Excellent operating results in spite of the difficulties of the global pandemic demonstrate the success of our diversification strategy and our ability to adapt it effectively. It is clear that our team's concerted efforts to implement this strategy, along with its pro-active response to fast changes in the economy and consumer trends, are crucial elements to our success and essential to the sustainable development of our group.
Let us look back on our strategic goals.
First, we seek to strengthen our position in the Russian vodka market. As part of this goal, we prioritized our leading brands, which showed excellent performance in 2020. For example, Arkhangelskaya vodka, which was already the clear leader in the low-premium category, grew by 82%. Belenkaya vodka, also already a leading brand on the Russian market, enhanced its position by growing 11%, while premium vodka brands like Snow Owl and Copper Horse grew by 89% and 43%, respectively. Interestingly, both Arkhangelskaya and Belenkaya brands entered the top 30 world vodka in the Millionaires' Club 2020 rankings by the high-profile British magazine Drinks International. Arkhangelskaya also topped the list of the fastest growing vodka brands around the world and placed second in the overall list of dynamically developing brands. Innovations and new product development play an important role in these achievements. In 2020, the Arkhangelskaya brand launched three new products, Myagkov introduced vodka on Alfa spirit, and two new debut vodkas were released: Orthodox and PARKA.
Our second goal aimed at establishing a categorical diversification outside of vodka into Brown Spirits and Wines, both in-house and with imported partner brands. Namely, our in-house brand of super-premium bitters, Beluga Hunting, grew by 19%, while our in-house Scotch whisky, Fox & Dogs, grew by 84%, with its share of the Russian whiskey market now reaching 6%. Sales of Golubitskoe Estate premium still wines grew by almost 150%, and Green Baboon gin continues to build its position, with sales nearly doubling since 2019. Most partner brands also saw growth. For instance, sales of super-premium whiskies like The Balvenie and Glenfiddich improved by 57% and 12%, respectively, while Torres Brandy grew by 27% and Ron Barcelo, by 42%. Sales of imported wines doubled, with Masi wines exhibiting the best results with 100% growth, Torres—84%, Faustino—47%, and Cono Sur—28%, with the brand exceeding the threshold of 100K 9 L cases. In the beginning of 2020, BELUGA GROUP launched the major Armenian brandy Noy in Russia. Last spring we reached an agreement with the Portuguese Sogrape to sell Portugal's most popular wine, Mateus, in Russia. Over the summer, we signed an agreement with Les Grands Chais de France to establish a partnership with the French company. Earlier, we succeeded in restoring their Calvet brand back in the Russian market, and from January 1, 2021 we will begin distributing their world-famous wine, JP Chenet. After an agreement entered into force in October with Sazerac, named American Whiskey Producer Of The Year By 2020 International Spirits Challenge, BELUGA GROUP is now the exclusive Russian distributor of Fireball Whisky Liqueur, the first product in the category in the company’s portfolio, and of Early Times bourbon. We have been actively developing brand innovations outside vodkas as well. For example, last spring we launched a line of premium in-house sparkling wines, Tête de Cheval, created using the traditional Champagne method.
Thirdly, we invested in developing the global reach of our super-premium vodka, Beluga. Despite the pandemic, the brand saw 30% growth in the United States, a key market for super-premium vodkas. The brand also exhibited double-digit growth in the UK, UAE, Poland, Belgium, the Baltics, and Australia. Our accomplishments were reflected in the Annual Brands Report 2021 by Drinks International, which showed Beluga among the top 10 Bestselling/Top Trending vodka brands in the world (placed 7th and 6th, respectively).
Our fourth goal is to continue improving on the quantity and quality of our retail chain, WineLab. This makes up a valuable and actively growing segment of our business: the number of stores exceeded 640, with sales having increased by 48% year-on-year and like-for-like sales demonstrating growth of 23%. The average ticket for the period increased by 11.6%. Our company has especially focused on developing e-commerce. As such, volume of click & collect-based sales in 2020 grew fivefold compared to the previous year. WineLab is among the top 7 players in the retail alcohol market in Russia, having won the Retail Week Awards 2020 as "The Fastest-Growing Food Retail Chain." The chain is undergoing a digital transformation, a direction first set in 2020 that will become a key development initiative in the coming years. Restrictive measures caused by the pandemic have had a significant impact on client relationships. Focus on customer, friendly service, and the safety of purchases have acquired a particular importance over this difficult period. WineLab stores not only complied with strict safety measures but also introduced numerous initiatives to improve customer experiences. This resulted in 32.6% growth in customer traffic compared to the previous year, while new the customer satisfaction index grew by 21%.
These positive indicators enabled BELUGA GROUP shares to be included in the Broad Market Index as well as the Consumer Sector Companies Index of Moscow Exchange in late May. In late June, the group's ordinary shares were upgraded from the Level Three section to the Level Two section of the list of securities accepted for trading on the Moscow Exchange, thus confirming the group's effective corporate governance and a considerable improvement in the liquidity of shares. By and large, we have increasingly focused on our business's appeal to investors, incorporating a new dividend policy, paying out dividends for 2019, along with interim dividends for the first 6 months of 2020. Moreover, our company was featured prominently in four ranking lists published by well-established agencies and media in fall 2020. We rank #190 in the Forbes 200 Largest Private Companies in Russia, becoming the only alcohol company represented in the list, and #12 among agribusiness companies. We also sit at #249 on the RBC 500 List and #285 on RAEX-600, occupying the first place among producers of spirits. Finally, we rank #301 in the Expert-400 rating, while taking 15th place in the food industry and 1st place as a producer of strong alcoholic beverages.
This year shaped up to be unlike any other year. It brought a new reality and changed the world order established over the last few decades. We must now leave behind the approaches that we were once used to. Internally, we took proactive measures to protect the health and safety of our employees, partners, and, as I previously mentioned, our customers. We introduced extra precautions across our businesses, including factories, offices, and retail stores. Our teams maintained outstanding performance and continuous operations even when working remotely. During these trying times, BELUGA GROUP took part in a global solidarity efforts to fight the pandemic, concentrating on regions where our teams operate. We allocated tens of millions of rubles to purchase essential medical equipment and support the health care systems across Arkhangelsk, Primorsky Krai, the city of Moscow, and Moscow Region.
The consequences of this pandemic will impact the global economy and each business for years to come. Still, BELUGA GROUP remains a sustainable business and unmatched in Russia. We have high-tech facilities, a strong portfolio of in-house and imported brands, an increasingly popular retail chain, and a unique distribution platform. However, were we to stop now and rest on our laurels, we would only lose the progress we have gained. That is why we continue to improve and launch the global transformation of the BELUGA GROUP, advancing an automation of systems and equipment, upgrading operations sites, and introducing new IT and digital technologies, among other strategies. This means that more achievements and successes lie ahead. I would like to say thank you to our entire team for making it through this difficult year with excellent results, and to all the connoisseurs of our brands for choosing us. Meanwhile, we will maintain the exceptional quality of our products at optimal prices."