Koskenkorva Vodka owner Anora Group saw spirits sales fall by 8.1% in the third quarter of 2024 after declines in all markets except Sweden.
Anora’s spirits sales fell by 3.9% to €158.1 million (US$170m) for the first nine months of this year, while the category’s sales for the third quarter (Q3) dropped by 8.1% to €52.6m (US$56.6m).
It followed a decline of 1.7% in spirits sales for the Helsinki-headquartered group during the first half of 2024.
Apart from Sweden, spirits sales declined in all of Anora’s markets during Q3: Finland by 5%, Norway by 8%, Denmark by 11% and international territories by 13%. Excluding Larsen Cognac, which was sold to ThaiBev last September, Anora’s spirits sales in international markets were down by 3%.
Anora said it had increased its spirits market share in Finland, however a recent change in alcohol legislation meant that fewer people visited government-run Alko shops (the only place where spirits can be sold) and opted for grocery stores instead.
In June, Finland’s parliament approved a proposal to increase the ABV limit of fermented alcoholic beverages for sale in licensed retailers to 8%, up from 5.5%. This move does not apply to spirit-based products but means other alcoholic products up to 8% ABV are no longer restricted for sale in Alko stores.
Anora’s spirits sales increased by 4% in Sweden, but the company noted that its market share declined.
In Norway, where the group also lost market share, Anora said it had faced challenges with aquavit sales in the country.
Anora also noted that Koskenkorva had grown its sales from the previous year, with the brand representing more than 16% of the group’s total spirits revenue.
During the nine-month period, Koskenkorva launched seven new products, including four for Alko, one for global travel retail, one for Estonia, and one for Vinmonopolet in Norway.
Furthermore, the company launched two 4.5% ABV ready-to-drink (RTD) products for its Vikingfjord Hard Seltzers brand, Raspberry & Pomegranate and Orange & Mango, in Norway’s grocery channel.
Two more RTDs were also launched in Finland under the Jaloviina Omena brand. Anora also launched Opland Premium Aquavit in Norway.
Group performance
For the first nine months of 2023, Anora’s total sales dropped by 5.5% to €486.7m (US$523.5m). Wine sales fell by 4.3% and the industrial segment dropped by 10.3%.
Q3 sales for the group declined by 6% to €162.7m (US$175m).
Outgoing Anora CEO Jacek Pastuszka said the company had focused on “pricing and revenue management, stable operating expenses and net working capital reduction” during Q3.
Pastuszka, who announced his departure from the company last month, also noted that the group’s gross margin in 2023 was impacted by a one-off capital gain from the Larsen divestment of €12.2m (US$13.1m).
“As a result, our gross profit showed a decline of 17.6% to €68.4 million [US$73.5m] in Q3,” he explained.
“However, our markets declined in September more than previously forecasted and the sharp volume drop in monopolies had a material impact on our bottom-line performance for the quarter, resulting also in lower guidance for the full year.”
In its guidance for 2024, Anora expects its comparable earnings before interest, taxes, depreciation, and amortisation to be €65m-€70m (US$70m-US$75m), down from €68.2m (US$73.4m) last year.
Pastuszka said the company would work to strengthen its cash position and balance sheet by cutting working capital and improving its inventory turnover.
“We seek to restore organic net sales growth in the wine and spirits segments by concentrating our efforts on the largest brands and partnerships,” he added.
In 2024, the company believes its volumes in key markets will be slightly lower than last year due to ‘challenging economic conditions’.
Anora also expects Finnish monopoly alcohol sales to continue declining as a result of the new legislation allowing 8% ABV drinks to be sold in grocery stores.
The company expects the decline to be mostly offset by sales of up to 8% ABV wines in the country’s grocery channel.
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Author: Nicola Carruthers
