Davide Campari-Milano S.p.A.
Davide Campari-Milano S.p.A.
Sales: EUR 660.6 million ($650 million) (2002)
Stock Exchanges: Milan
Ticker Symbol: CPR
NAIC: 312140 Distilleries; 424820 Wine and Distilled Alcoholic Beverage Merchant Wholesalers
Long a single-product company, Davide Campari-Milano S.p.A. has transformed itself into one of the world’s top ten spirits and beverages specialists. The company is famed for its Campari Bitters, which remains a world leader in its category after nearly 150 years. Yet, through a series of acquisitions in the 1990s and 2000s, Campari has built a strong stable of internationally recognized brands, including Cinzano, SKYY Vodka, Cynar, Ouzo 12, Gold Cup, and Gregson’s. Other brands in the group’s stable include winemakers Sella & Mosca and Zedda Piras, both acquired in 2002, and Biancosarti. The company also produces a line of soft drinks, including Lemonsoda, Oransoda, Pelmosoda, and the nonalcoholic aperitif Crodino. In addition to its own brands, Campari holds manufacturing and distribution licenses for a number of brands, including Glenfiddich, Grant’s, Henkell Trocken, Lipton Ice Tea, and Jägermeister. Spirits represent nearly 65 percent of the company’s sales, which topped EUR 660 million ($650 million) in 2002. Soft drinks contributed more than 19 percent, and wines added nearly 15 percent to sales. Campari distributes to more than 190 countries; Italy, however, remains the group’s single largest market, at more than 50 percent of sales. Davide Campari-Milano has been controlled by the Garavoglia family since the 1970s; the family reduced its holding to 51 percent after listing the company on the Milan stock exchange in 2001.
Recipe for Success in the 19th Century
Born in 1828, Gaspare Campari began an apprenticeship as a “maitre licoriste” (drink master) at the Bass Bar in Turin, then an important center for Italy’s liqueur market. Campari worked alongside another famed name in drinks, Alessandro Martini, who went on to lend his name not only to the famous vermouth, but to the cocktail as well.
Campari left the Bass Bar to begin developing his own drink recipes and in 1860 opened his own café in Novara called Caffè dell’Amicizia. In that year, to celebrate the unification of Italy, Campari created a new drink recipe, a bitters that contained some 60 ingredients, including herbs and spices, tree barks, and fruit peels. The resulting recipe—which remained a closely guarded family and then company secret—created a distinctive red-colored, mid-proof aperitif that quickly became known throughout Italy.
Campari decided to move to Milan two years later to tap into the expansion potential of the Lombard region capital. Then, in 1867, Campari opened a second Milan café, in the newly built Galleria Vittorio Emanuele. The café became a popular gathering point for Italy’s elite, including then King Vittorio Emmanuel.
Campari was later joined by Davide Campari, a son from Campari’s second marriage. Davide Campari was to prove instrumental in establishing the Campari name’s international renown. The younger Campari became a fixture at the family’s café, as orders for bottles of Campari Bitters poured in from throughout Italy. Meanwhile, Gaspare Campari continued adding new recipes, launching a wide variety of spirits and liqueurs. None, however, were to enjoy the same success as his bitters.
Until the end of the century, the company produced its aperitifs and other recipes at two smaller plants. The rising demand for its bitters encouraged the family to open its first large-scale production plant, in Sesto San Giovanni, in 1904. Meanwhile, Davide Campari proved an innovative marketer. As demand for the aperitif swelled, the company began requiring that bars and cafés wishing to serve the drink also display advertising bearing the Campari Bitters name. Davide Campari then began commissioning artists to create advertising posters, a move that created many classic advertisements.
Davide Campari was also the driving force behind the company’s growing international sales, after the group began exports at the dawn of the 20th century. As Campari legend has it, Davide Campari had fallen in love with Italian opera singer Lina Cavaliere, who was leaving for Nice soon after they met. Campari decided to follow her, telling his family he was leaving to set up export sales to France. Cavaliere’s career led her to travel around the world, and Campari accompanied her, each time setting up imports of Campari Bitters in the new markets. In this way, it is said that the company’s sales spread across Europe and to Russia and the United States.
Davide Campari took over as head of the family business at the beginning of the 1920s and led the company into a new direction. Instead of maintaining a diversified drinks portfolio, Campari decided to build the company on the basis of its popular Campari aperitif, as well as its companion cordial liqueur version. The company now turned to developing its production capacity to meet the growing international demand, opening its first foreign plant, in Nanterre, France, in 1923. Several years later, the company opened a second foreign plant, in Lugano, Switzerland.
In the 1930s, Campari hit on a new success. Campari Bitters had inspired a wide array of cocktails, including the famed Negroni and Americano cocktails. Yet by far the most popular way of drinking the bitters, at least in Italy, was mixed with soda. In 1932, the company debuted its own blend of Campari and soda, packaged in a distinctive cone-shaped bottle. The result, which was dubbed, appropriately enough, Campari Soda, became a new success for the company, and was held to be the world’s first pre-mix packaged drink.
Joining the Consolidation Race in the New Century
Davide Campari died in 1936; ten years later, the company incorporated as Davide Campari-Milano S.p.A. The company remained focused on this core product for most of the rest of the century, even after Domenico Garavoglia gained control of it in the 1970s. Sales grew especially strongly during the 1960s and 1970s, as Campari became synonymous with a newly developing, “sophisticated” cocktail trend.
Although Italy remained the company’s largest sales base, Campari’s distribution network had brought the brand to more than 80 countries by then. To support this growth, Campari opened a new production plant in 1987, in Barueri, Brazil. At the beginning of the 1990s, the company also entered a series of production and distribution joint ventures with Veuve-Clicquot, Marnier-Lapostolle, and William Grant & Sons.
The rapid consolidation of the global drinks market, and especially the creation of a small number of dominant players, such as Diageo and Allied Domecq, forced Campari to make a choice between joining the race for market size, or simply defending its core, but niche, product. Campari, now led by Luca Garavoglia, decided to pursue the former option.
Using the strong cash flow generated from the sales of its products—at the time limited to Campari, CampariSoda, and Cordial Campari—the company launched an aggressive acquisition campaign in the middle of the 1990s. The company’s first purchase came in 1995, when it acquired the Italian drinks portfolio of The Netherlands’ Koninklijke BolsWessanen. The acquisition gave Campari a strong list of soft drinks, including popular Italian brands Lemonsoda and Oransoda, and the nonalcoholic aperitif Crodino. The company also gained control of two brands, Cynar and Biancosarti, with a strong international market. In exchange, BolsWessanen acquired a 35 percent stake in the company. That year, the company also began distributing the Ricadonna brand of Asti sparkling wines, with sales especially targeted at the Australian and New Zealand markets.
The BolsWessanen agreement also led to Campari’s acquisition of the Italian production and distribution rights for the German bitters brand Jägermeister in 1996. In that year, also, the company gained the distribution rights to the popular Glenfiddich and Grant’s whiskey brands.
Campari’s next move came in 1998, when it acquired a 10 percent stake in fast-growing U.S. vodka brand Skyy Spirits. Under the purchase agreement, Campari obtained access to Skyy’s distribution network in the United States. That year, Campari gained the rights to distribute the Lipton Ice Tea brand in Italy from Unilever Italia.
In 1999, Campari took a short break from its acquisition drive to launch a new product, Pelmosoda, which, based on grapefruits, rounded out its portfolio of citrus-based soft drinks. The company then returned to the external growth trail, picking up the Ouzo 12 brand of the popular Greek anise-based drink from United Distillers and Vintners (UDV), part of Diageo, then in the process of shedding a number of its noncore “tail end” brands.
Campari returned to UDV for its next shopping spree in December 1999, when it agreed to pay EUR 106.5 million ($107 million) to acquire Cinzano and its portfolio of wines and vermouth. Cinzano, which had been in operation since 1757, had by then established itself as the world’s number two vermouth brand (behind Martini).
Campari continued adding brands at the beginning of the 21st century, acquiring the distribution rights for the Swiss market from Germany’s Henkell Söhnlein for its Henkell Trocken sparkling wines and its Gorbatschow Vodka. By the end of 2000, Campari began preparations for a public listing. In the meantime, the company continued building up its portfolio, returning to UDV to buy its Brazilian and Uruguay spirits and wine brands for EUR 113 million in 2001. That acquisition added such brands as Dreher, Old Eight, Liebfraumilch, Gregson’s, and Druty’s to Campari’s impressive and well-balanced list.
The Campari Group is one of the world’s leading alcoholic beverage companies with more than 140 years of experience in the industry, producing and selling brands such as Campari, SKYY Vodka and Cynar in the spirits segment, and Cinzano and Sella & Mosca in the wines segment.
Campari went public in July of that year, as Wessanen sold off the majority of its shares. The Garavoglia family nonetheless retained control of 51 percent of the group’s stock. With new access to capital, Campari prepared to step up its growth. In December 2001, the company agreed to purchase an additional 50 percent of Skyy Spirits, paying $207 million to take control of that group, which by then had captured one of the top spots in the U.S. vodka market. Two months later, Campari struck again, this time acquiring two Sardinia-region companies, winemaker Sella & Mosca and spirits brand Zedda Piras. The company then announced its intention to pursue more Italian wine region acquisitions.
Campari’s latest flurry of acquisitions had enabled it, meanwhile, to post a revenue increase of an impressive 32 percent, as the company’s sales topped EUR 660 million in 2002. The company showed no sign of slowing down in its drive to join the world’s global drinks majors. By July 2003, the company had made good on its promise of pursuing more Italian wine brands when it paid EUR 11.3 million to acquire Ricadonna brand from the Bersano-Ricadonna wine group. That purchase gave Campari control of the company’s Asti sparkling wines, which had grown into market leadership in Australia and New Zealand, while leaving Italian distribution of the brand under Bersano’s control. Campari’s thirst for brand expansion appeared certain to continue strongly into the next decade.
Campari Deutschland GmbH; Campari do Brasil Ltda.; Campari France S.A.; Campari International S.A.M. (Monaco); Campari Italia S.p.A.; Campari Schweiz A.G.; Campari-Crodo S.p.A.; Francesco Cinzano & C.ia S.p.A.; Gregson’s S.A. (Uruguay); N. Kaloyannis Bros. A.E.B.E. (Greece); S.A.M.O. S.p.A.; Sella & Mosca S.p.A.; Skyy Spirits, LLC (58.9%); Zedda Piras S.p.A.
Allied Domecq Netherlands BV; Diageo Plc; Seagram Company Ltd.; Fortune Brands, Inc.; Jim Beam Brands Worldwide Inc.; Brown Forman Corporation.
- Gaspare Campari opens a café in Novara, Italy, and introduces his own aperitif recipe.
- Campari moves his café to Milan and begins selling Campari to other cafés.
- Campari opens second café in Milan’s new Galleria Vittorio Emanuele.
- The company opens its first large-scale production plant, Sesto San Giovanni, as the company begins exports.
- Davide Campari takes over the company and focuses it on a single Campari recipe; the company opens its first foreign production plant, in Nanterre, France.
- The company introduces CampariSoda, the world’s first pre-mix cocktail, which becomes a company bestseller.
- The company incorporates as Davide Campari-Milano S.p.A.
- Domenici Garavoglia acquires control of the company, but maintains its single-product focus.
- The company opens a new production facility in Brazil.
- Campari begins an acquisition program in order to acquire scale in the rapidly consolidating global drinks industry; the first acquisition is of Bols-Wessanen’s Italian soft drinks portfolio.
- The company acquires the Italian distribution rights to Jägermeister, Glenfiddich, and Grant’s brands.
- The company acquires a minority stake in Skyy Spirits, giving it access to the company’s U.S. distribution network.
- The company acquires Ouzo 12 and Cinzano.
- Campari goes public on the Milan stock exchange; the company acquires a portfolio of brands in Brazil and Uruguay from United Distillers & Vintners; majority control of Skyy Spirits is acquired.
- The company acquires Sella & Mosca and Zedda Piras.
- The company acquires the Ricadonna brand.
Boland, Vincent, “Campari Takes Control of Skyy Vodka Brand,” Financial Times, December 14, 2001, p. 27.
Homer, Eric, “Salute! Campari Pours a $150 Million Round Via Deutsche Bank,” Private Placement Letter, June 23, 2003.
Kapner, Fred, “Campari IPO Mixes Well with Italian Market,” Financial Times, July 4, 2001, p. 24.
“A Lot of Bottle,” Economist, June 30, 2001, p. 7.
McCann, Paul, “Cinzano and Campari Boogie Back into the Limelight,” Independent, January 12, 1998, p. 3.
Walsh, Dominic, “Campari in Bid for Cinzano,” Times (London), September 21, 1999, p. 29.