Andrew Carter, CEO of Chapel Down, wants to more than double the international business by 2026.
U.K. sparkling wine producer Chapel Down is set to expand its retail footprint, initially through the travel channel, as it drives forward a plan to double the size of the business in the five years from 2021 to 2026 and entice new investors on the AIM market.
England’s largest winemaker, founded in 2002, began trading on AIM—operated by the London Stock Exchange—on Thursday, moving from the AQSE Growth Market. The entire issued share capital was 159,253,885 ordinary shares at £0.05 each.
In a statement, the CEO of Chapel Down, Andrew Carter—who holds 0.19% of the shares—said that the decision to list on AIM reflected the maturity of the business, founded in 2002, and its ambitious growth plans. He commented: “Chapel Down has greatly benefited from its AQSE listing over the past 20 years as it has grown from a start-up in an embryonic industry into England’s leading and largest winemaker. The move to AIM will attract a wider pool of investors (in) the leading producer in the world’s newest global wine region.”
Chapel Down has had a fairly consistent track record of profitable growth over the years and under Carter’s tenure (CEO since September 2021), the company has been on a development track ahead of other English sparkling wine producers like Balfour, Gusbourne, and Nyetimber.
Brand building has been a particular focus through partnerships with high-profile sports organizations such as the England and Wales Cricket Board and Ascot Racecourse, and events like the Oxford-Cambridge Boat Race. The company claims it had brand awareness of 37% by June this year supported, also, by 60,000 visitors annually to its winery tours and tastings at its home in Tenterden, Kent in Southeast England. The region has become the country’s sparkling wine hub, and a Champagne challenger according to several wine experts.
Retail strategy
On the retail front, Chapel Down will remain a U.K.-driven business in the foreseeable future. More than half of sales currently come via major British supermarkets like Tesco and Waitrose, and another 15% from about 2,000 on-trade establishments; mainly hotels and bars.
Direct-to-consumer e-commerce and winery tours account for a substantial 25% of revenue while a small 4% comes from international markets. “We want to increase that to about 10% by 2026,” Carter told me. “We see a big international opportunity as we increase our vineyard production.”
In the interim, the U.K. travel retail channel will be the brand’s shop window to international consumers. So far, Chapel Down is listed in key international airports like London Heathrow, London Gatwick, London City, and London Luton. Next year, a deal with Avolta will see another 10 locations added. Carter said that cruise lines are also a target.
Chapel Down will be relying on the travel channel, and major sporting events, to get its name out to a global audience, particularly in markets like Scandinavia and the United States, in advance of an export push.
The company leases and sources from 1,023 acres of vineyards, of which 750 acres are fully productive. Having sold 1.4 million bottles of wine in 2022, production will be ramped up through new planting. Carter said: “We had a record 2023 harvest, with tonnage 86% higher than 2022 and 75% higher than the previous record posted in 2018. This will underpin our strategic ambition to double the size of the business by 2026.”
The bumper 2023 harvest is expected to enable the production of approximately 3.4 million bottles of sparkling and still wines.
