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Thu 28th Sep 2017 - Chapel Down Group to start work on new brewery as sales rise
Chapel Down Group to start work on new brewery as sales rise: Chapel Down Group is about to start work on a new brewery in Ashford amid growing demand for its beer as well as its wine. Chief executive Fraser Thompson said: “Our growth (in beer) has been focused on premium accounts and we are delighted by the continuing progress in top end restaurants, bars, hotels and premium off-trade where the brand has good sustainable rates of sale. We are successfully attracting aspirant consumers wanting interesting, original and accessible brands. We have national distribution through Majestic and Waitrose in the off trade and a network of wholesalers including Matthew Clark that enables us to get Curious beers in draught or bottles to the whole of Great Britain. We are supplying M&B, Ei Group, Food and Fuel and a number of up and coming small groups looking for something truly original. Beer and cider sales rose 8% to £1.632m in the first half and we have successfully migrated production. We have also recently completed an overhaul of the brand identity to ensure that our proposition is better communicated and have held off off-trade development until those two elements were in place. Recent research confirms that we have a unique and distinctive consumer proposition – a winemaker’s beer – which is increasingly rare in a beer market excited by novelty and choice. Our real point of difference and taste appeal to a broad church of consumers give us a huge opportunity. We are satisfied with the strong margins and we will be driving growth as we add capacity to build the brand. The construction of the new brewery has been frustrating but we are now about to commence construction and will be brewing on site in 2018. This will help us further improve margins.” Of wine sales, he said: “Wine sales grew 29% in the first half, to £3.345m with wine volumes up 24%. The strong positioning of our brand has been enhanced through our sponsorship of the Oxford & Cambridge University Boat Races, a sharpening of our presentation, and continuing growth in the quality of our wines in trade. We have seen good growth across the country, as well as in our focused export markets, with very encouraging development in the United States where the brand has been well received in prestige accounts in New York following launch and our partners, ABCK Corporation have recently launched Chapel Down in Texas and New England working with Southern Wines and Spirits. Our wines continue to win international accolades, which has helped to ensure that, along with our strong sponsorships and outstanding PR, demand for our wines continues to outstrip our ability to supply and enables us to move pricing forwards whilst maintaining strong relationships with our blue chip retail partners. With high demand and excellent sell through (volumes up 24%) we are confident of an excellent long term future if we can increase our fruit supply. This year’s harvest looks to be of very good quality, but volumes have been affected by an early frost and we are having to limit supply of some of our wines to new customers to ensure we can continue to support our core customers who are experiencing growing demand. Growth in the second half has been managed down therefore, but will nevertheless mean that 2017 will see record sales and gross profits. Investment by our shareholders has enabled us to secure an exciting future. We are very pleased with the development of our new vineyard sites and we continue to invest in creating further high quality supply. We have planted a further 50 acres this Spring taking the total planted on our long term leased land to 172 acres since 2015. We now have 533 acres of vineyard planted from which to source our fruit. We continue to invest in further capacity and equipment to enhance efficiency and quality in the winery, improving our systems and processes as well as building our brand and team. We completed the development of the new Wine Sanctuary at Tenterden to enable us to give an even better visitor experience. Our visitor numbers and spend in the shop are up (around 20%) and the restaurant has also benefitted.” Sales rose 22% to £4,977,000 in the six months to 30 June whilst Ebitda was £235,000 (H12016: £93,000). A total 50 acres of new vineyards were panted on new leased sites in Kent. 

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