Within this, Bulmers cider brand volumes were down 15.8% in the company’s H1 figures.
The beer and cider manufacturer/wine and spirits distributor reports that, as result of Covid-19 and the ensuing restrictions, the RoI’s Long Alcoholic Drink volumes were significantly down, driven by the closure of the on-trade.
“Restaurants and food-led pubs re-opened on 29 June,” it stated, “Since then there has been a steady increase in the number of sites trading and a gradual increase in trading levels, with national Covid-19 restrictions switching to localised restrictions.”
With the on-trade largely closed down during most of the six-month period, the off-trade picked up its volume share by 24.6% MAT.
On a six-month basis off-trade volume growth increased by 46.7% which then softened in the latest three-month period to 38.1% as the on-trade gradually re-opened.
“As a result of Covid-19, larger brands have performed well while own-label and niche have suffered,” stated C&C, “Retail habits have evolved; frequency, basket-size and outlet choices have changed. Convenience channel was and remains the highest growth channel, with growth in rural areas at the expense of larger cities/urban areas.”
Despite Covid-19, C&C continued to move forward in terms of brands. From the 1st of July the Group assumed exclusive distribution of the Budweiser brand in Ireland and launched a new brand identity for it. The addition of Budweiser means that the Group now distributes Budweiser Brewing Group’s full beer portfolio on the Island of Ireland.
C&C’s Clonmel manufacturing facility continued to be fully operational through the period to meet the increased demand from the off-trade. Working with its customer base throughout Lockdown and the reopening phase, it provided flexibility with delivery days and order sizes which included a ‘new for old keg’ replacement process and C&C’s Hygiene initiative, helping 500 on-trade customers.
As of August 2020 the business was trading with 47% of the outlets it traded with in August 2019.
Bulmers gained both volume and value share in the off-trade LAD category in the latest six-month period, growing by 0.4 percentage points and 0.2 percentage points respectively. Bulmers off-trade volumes were up 42.4% in the six months to the end of August against the same period in 2019, “driven mainly through the Convenience channel which has significantly outperformed”.
The performance in the off-trade has moderated as the on-trade has re-opened.
Wholesale distribution and wine
C&C also reported that its wholesale channel had been significantly impacted, with the majority of the 4,600 outlets it serves closed during most of H1.
This is reflected in volumes which were down 41.5% against the same six-month period the previous year. However the wholesale wine business had performed strongly with volumes up 11.3% in H1, a performance driven by the off-trade and buoyed by Summer “staycations”.
Overall revenues down 55%
Net revenues at the C&C Group overall were down 55.4% to €387 million resulting in an Operating Loss of €11.7 million. The off-trade benefited to some extent with revenue growing 15.6% compared to the same period last year.
According to C&C Group Interim Executive Chairman Stewart Gilliland, the business returned to profit generation in July through to September.
“The outbreak of Covid-19 coincided with our financial year end and has meant that the entire six month performance being reported today, was impacted,” he stated, “Although we expect the pace of recovery will continue to vary, as the largest independent alcohol distributor across the UK and Ireland, our business is structurally integral to the markets we serve.”
September continued C&C’s return to profitability but October “is challenged by further on-trade restrictions in both the UK and Ireland”.
He added, “The outlook for the on-trade sector remains challenging with limited near-term visibility.
“We expect to see reduced volumes in the on-trade continue for the near-term partially offset by increases in the off-trade. We’re adapting to this temporary change in consumption dynamics and whilst it will invariably reduce short-term profitability, we fundamentally believe in the medium- and long-term outlook for the on-trade channel.”
C&C reports that the “near-term outlook for the on-trade sector remains challenging and uncertain, with the key Christmas trading period likely to be impacted by continuing restrictions across the hospitality industry”.