Concha y Toro grew by 4% in 2022 but fell short in key markets
The drinks giant’s full-year 2022 results reveal that despite decreases in major markets such as the UK and Chile, the company was able to claw back sales with strong performances elsewhere.
Viña Concha y Toro closed 2022 with a 4% increase in revenue to Ch$870,582 million, driven by strong sales in Central America, the Caribbean and Asia.
Price increases on bottles of wine and a favourable exchange rate were further reasons offered up as to how the company achieved growth in what it described as “a complex global scenario”.
“During 2022, we faced a highly complex global business environment, marked by inflationary pressures and economic deceleration that resulted in significant cost increases and changes in buying patterns among our main markets,” said Eduardo Guilisasti, CEO, Concha y Toro.
Together with lower sales volumes, costs increased by 5.4% in the year, while selling, general, and administrative expenses were up 14.1%, primarily due to higher remunerations and personnel costs (+9.9%); freight, shipping expenses, and warehouse leasing (+19.2%); and marketing expenses in key markets (+10%).
“These results were primarily due to extraordinary market conditions impacting raw materials costs, logistics expenses, and shipping costs, which should not be repeated in 2023 with the same intensity in view of the trends that have emerged in recent months,” Guilisasti added.
The soaring logistical costs he mentions include a +19.2% warehouse leasing charge.
Shares were down 11.7% in 2022,.
According to the announcement, Central America led the wine group’s growth with a 33.5% increase in sales driven largely by the strong performance in Mexico (+32.8%), thanks to brand building efforts carried out by the company’s Mexican subsidy and a trend for growing wine consumption in the market.
Sales in the Caribbean were up 19.4%.
The Asian market also performed well in 2022, with sales increasing by 20.8%, primarily due to higher sales volumes during the first three quarters of the year in Japan (22.6%) and China (+14.8%).
In Chile, where Concha y Toro is headquartered, sales were down 0.6% in value and 5.7% in volume.
The drinks group, which counts wine brands including Casillero del Diablo, Trivento and Bonterra Organic Estates among its portfolio, enjoyed noticeable growth in its premium beer segment, with sales of beer and spirits leaping by 6.6% in volume and 1.6% in value.