Campari Group opens operating company in Singapore to capture thirsty Apac market

SINGAPORE - The high-net-worth crowd in Singapore makes up a third of Campari Group’s business here, with its appetite for ultra-premium whisky, cognac, bourbon and the like, according to the group’s Asia-Pacific (Apac) managing director.

“These are people who are either collectors (or are buying for) very special gifting. They look for products that one can’t find anywhere else,” said Mr Matthijs Kramer.

Selling premium alcohol directly to individuals is not something Campari does in many markets, he said. But it is something it is keen to do here as these wealthy individuals are seen as influential tastemakers in the region.

Even though Singapore is admittedly a small market for the group, he sees big opportunities for its entire portfolio of premium spirits and alcohol.

This led Campari to “over-invest” by opening its own operating company here in January.

Reasons that Mr Kramer cited were the city’s constant good weather, affluent and sophisticated consumers, and a very developed bar and restaurant scene with good bartenders.

“If we are big enough in a market to have our own sales organisation, our own marketing organisation, then we always go quite quickly in establishing... what we call our in-market company, our own operating company,” he said.

Data analytics firm Euromonitor International forecasts consumers in Singapore to splash out US$11.2 million (S$15.2 million) on luxury spirits in 2028.

While it is a mere drop in the ocean compared with Apac’s US$166.9 billion expected expenditure in this area the same year, consumers in Singapore and Asia are getting more sophisticated and are choosing quality over quantity.

Mr Nathanael Lim, insights manager for beverage in Asia at Euromonitor International, said: “This is seen through new product innovation and the use of quality ingredients in the liquor, appealing to consumers’ desire for novelty and experience in their alcohol consumption.”

In China, younger consumers are developing a taste for whisky and cognac. British alcohol company Diageo, which produces Johnnie Walker whisky, had plans to expand beyond its 10 whisky stores and sections in other stores in China, Reuters reported in March 2024.

Mr Lim said hard liquor from the West has gained traction in Singapore and Asia due to the availability and prevalence of renowned bars and their strong cocktail culture, with consumers willing to splurge on it due to its premium quality.

Four Singapore bars made it to the list of The World’s 50 Best Bars 2024: Jigger & Pony, Nutmeg & Clove, Atlas and Analogue Initiative.

The Asia-Pacific region made up 6.5 per cent, or €147.6 million (S$206 million), of the group’s net sales for the first nine months of 2024 ended Sept 30. Europe, the Middle East and Africa made the most at €1.1 billion, followed by the Americas at €1.03 billion.

Campari Group has made regular luxury alcohol brand and company acquisitions almost yearly since 1999, to further solidify its premium portfolio.

In recent years it acquired Courvoisier cognac (2024), Champagne Lallier (2023) and Wilderness Trail Distillery’s bourbon and rye whisky (2022).

Its wider focus will be on pushing the Italian aperitif Aperol in Singapore and the region, home to some of the biggest beer markets and breweries in the world, such as the Heineken Vietnam Vung Tau Brewery and China Resources Snow Breweries.

Mr Kramer said: “If you look at the European and US markets, Aperol sits somewhere between a beer and a cocktail. And this is what makes it so attractive for consumers, because, basically, it is a trade-up from beer, but not at the price of a cocktail.

“So here, when you really crack it, you know you are immediately generating volumes that are no longer even comparable with spirits. You’re more comparable with beer.”

In 2024, consumers in Apac drank a combined 67.98 billion litres of beer and paid a total of US$202.4 billion for it, according to Euromonitor International. 

Total beer consumed is forecast to go up to 73.92 billion litres in 2028, with spending to hit US$232.6 billion.

Campari’s current strategy is to associate Aperol with festivals and major events, such as the recent Electric Daisy Carnival music festival in Phuket and the Australian Open in Melbourne.

Aperol was featured on various cocktail menus during the Singapore Grand Prix 2024. It is set to appear again at the 2025 race, though this is more a tactical marketing strategy than a massive investment, said Mr Kramer.

“When it comes to Aperol, we’re likely to go more towards festivals where we find a slightly younger consumer,” he added.

The growing trend of consumers drinking less but better-quality alcohol works in Campari’s favour, given that Aperol’s alcohol content of 11 per cent is considered low. The typical alcohol content in gin, vodka and whisky generally ranges from 36 per cent to 50 per cent.

Mr Kramer said: “Overall, we’re in the early days. In general, the Asia-Pacific region within the Campari Group weighs only about 8 per cent of our global net sales. So it’s definitely a percentage that we’re going to increase, you know, good into the double digits, that’s for sure.”

He said China will be an important driver of growth, along with South Korea, Japan and Australia.

“We’ve got a very long-term view on things. It’s not that we go into Apac and we think it’s a project for a couple of years. We make investments for the long term and this will become a very important region for the group,” said Mr Kramer.

“This is a market where we’re seeding today to reap the reward in the next years and decades ahead.”