ArcusGruppen (Arcus) is a leading supplier of wine and spirits in the Nordic region. Operations are divided into three areas: Spirits, Wine and Logistics (Vectura).
Aalborg Akvavit, Braastad Cognac, Gammel Dansk, Lysholm Linie Aquavit and Vikingfjord Vodka are the best-known brands in the Spirits area. Within Wine, Arcus both has its own brands such as Falling Feather and Ruby Zin, and an agency business where the company represents producers such as Masi, Francois Lurton and E. Guigal. Vectura is Norway’s leading logistics company for alcoholic beverages.
Arcus’s home market is the Nordic region. In Norway, Arcus is market leader within both wine and spirits. In the other Nordic markets, Arcus is one of the leading players.
Within spirits, Arcus competes with multinational companies that have international brands, such as Bacardi, Diageo and Pernod Ricard, as well as with local players such as the Finnish company Altia. In Arcus’s most important spirits segment, aquavit, the market only consists of local players since tastes and consumption patterns vary considerably between different geographic markets.
The Nordic wine markets are fragmented and mainly comprise local importers (agents) that both represent international producers and develop their own locally adapted brands that are chiefly sold in the national retail monopolies.
The market for wine and spirit products is considered non-cyclical. In recent years, the consumption pattern in Nordic countries has shifted from spirits to a greater demand for wine. In total, the market for wine grows approximately 1–3% while spirits are volume-wise stable to slightly falling, but with a premiumisation toward higher value.
The year in brief
Two strategic add-on acquisitions in line with the goal to expand in the Nordic region were completed in 2015. In April, one of Finland’s leading wine importers, Social Wines, and Swedish organic aquavit and mulled wine brand, Snälleröds, were acquired.
Sales increased through healthy growth in the Wine area, while Spirits displayed stable sales growth for the full year after healthy growth during the second half.
Operating profit improved despite the overall weaker growth within spirits, the negative impact of currency effects and raised alcohol tax. During the second half of the year, production in Aalborg was relocated to Gjelleråsen. Despite lower volumes, Vectura logistics operations reported better earnings following significant cost-cutting measures.
Kenneth Hamnes took over as the new CEO of ArcusGruppen in August 2015.
Arcus focuses its sustainability efforts on three themes: the environment, a responsible value chain and responsible consumption. In an effort to diminish its environmental impact, the company works to reduce water consumption and waste in production and increase the proportion of renewable energy. The company complies with the Nordic alcohol monopolies’ common code of conduct and therefore makes clear demands on both its own organisation and its suppliers. It takes an active position against alcohol abuse, among other things through the programme for Responsible Alcohol Consumption. Arcus subscribed to the UN Global Compact in 2012.
Arcus has undergone a transformation since Ratos acquired the company and has evolved into a leading Nordic wine and spirits supplier. Over the past ten years, non-core operations have been discontinued, property sold, several acquisitions of complementary brands have been carried out, and investments in expanding the offering have been made. Arcus has also invested in a new production and logistics facility, Gjelleråsen.
Vectura, distribution of alcoholic beverages in Norway, is a business-critical operation for Arcus. Extensive profitability-oriented restructuring efforts have been carried out that have resulted in a lower cost base.
Arcus operates in a non-cyclical market with stable to weak growth. Organic growth, better profitability and efficient production are the heart of the strategic plan. The spirits portfolio of strong brands has considerable growth potential and brand building features high on the agenda. Together with a strong position in an expanding and fragmented wine market, the company has a solid foundation for continued growth. Value-creating add-on acquisitions have historically been a key part of Arcus’s strategy and are expected to remain so in future. Given its strong management group, the company is well-equipped for the future. Our goal is that Arcus will continue to grow with increased profitability and we foresee unceasing good growth opportunities.
(Mainly from Ratos's annual report 2015.)