Top tipple: Britain’s biggest sparkling wine producer Chapel Down intends to make the most of new trends
British tipplers quaff 215 million bottles of sparkling wine a year, most in the form of Italian prosecco and Spanish cava. Champagne accounts for little more than 25 million bottles, while a mere 6 million bottles of English sparkling are consumed on these shores.
But it seems that tastes are changing. Demand for the local stuff has soared by more than 20 per cent this year, even as sales of Continental bubbles have dipped.
Britain’s biggest sparkling wine producer Chapel Down intends to make the most of new trends. The Kent-based group already has 38 per cent of the UK market. But boss Andrew Carter has big ambitions and the shares, now 71.5p, should answer.
Midas first looked at Chapel Down in 2013 when the share price was 19.75p, production was 500,000 bottles a year and the group owned 160 acres of vineyards. Today, the company has 906 acres of planted land, with another 100 due next year.
Production has soared, the group has won several awards and discerning drinkers are giving Chapel Down the thumbs up. Last month, Carter announced production of almost 3.5 million bottles from this year’s vintage, after a record harvest of more than 3.8 tons of grapes. The result, 86 per cent up on 2022, followed ideal conditions, with plenty of sun in May, June and September and mild temperatures throughout.
British weather is notoriously unpredictable, but rising temperatures on both sides of the Channel, are making life harder for champagne houses and more clement for English growers. With its chalky soil, there is little doubt conditions in Kent increasingly resemble those of the Champagne region 40 or 50 years ago.
Carter is keen to reap the benefits. A drinks industry veteran, he joined Chapel Down in 2021 with a mission to double sales to £28 million by 2026. Results for 2023 should show he is well on his way with turnover up at least 10 per cent to more than £17 million and profits rising too.
Over the past two years, Carter and his team have worked hard to ensure Chapel Down is sold across the UK, in bars and restaurants, supermarkets and off-licences, as well as direct to consumers via a thriving online site.
Sponsorship of English cricket has raised awareness and global sales are rising, with Americans and Scandinavians showing a particular fondness for English fizz.
Signalling its long-term growth plans, Chapel Down has just moved from the Aquis Stock Exchange to the London Stock Exchange’s AIM, also a market for young companies but one that tends to attract a wider pool of investors, large and small.
In common with many drinks businesses, November and December are crucial months for Chapel Down, accounting for up to a quarter of annual sales.
The season is going well. Chapel Down says one in seven households drink its bubbly through the year but numbers are expected to rise over the festive season, as young and old take to home-grown fizz.
Midas verdict: Chapel Down shares have more than tripled over the past decade but there should be plenty more pop in the stock. Results are strong, Carter is driven and blind tastings show that even the French savour English sparkling wine. Shareholders relish generous perks too, including a 33 per cent discount on all purchases, ideal at this time of year. At 71.5p, this is a thirst-quenching long-term hold.
Traded on: AIM Ticker: CDGP Contact: chapeldown.com or 01580 766111
