- Mixers minnow partners with major China distributor
- Supercharges focus on premium Chinese drinks market
- Margins holding up well despite inflationary pressures
Shares in East Imperial (EISB) fizzed 28% higher to 4.1p after the ultra-premium mixers minnow signed a long-term distribution deal with Wen Hua Hang Wine Spirits Company, one of China’s biggest distributors.
This stirred interest in East Imperial because WHI has assisted in distributing and growing global brands including wine and spirits powerhouse Pernod Ricard (RI:EPA) in Mainland China and Macau, where it will now supply the company’s entire product range.
BIGGER OPPORTUNITY
Upmarket mixers firm East Imperial is already an established brand in China, having worked locally with the likes of Ritz-Carlton, Bulgari, W Hotel, Rosewood and Capella Hotels.
East Imperial, whose popular tipples include Old World Tonic, Grapefruit Tonic, Yuzu Tonic and Mombasa Ginger Beer, insisted the WHI tie-up will enable it to continue building its presence in the middle kingdom’s luxury hotel market while also focusing on the supply of local premium customers.
The company reiterated that the APAC region, forecast to contribute almost 60% of sales in 2022, remains the ‘cornerstone’ of the business in the short to medium term.
The WHI deal builds on new distribution tie-ups with SUTL for the Singapore and Indochina region and Leung Yick for Hong Kong.
SUPERCHARGED FOCUS
East Imperial’s CEO and founder Tony Burt said the announcement represents ‘an important milestone for East Imperial, as the partnership with WHI enables us to supercharge our focus on the premium drinks market in China’.
The WHI deal offers East imperial a ‘fantastic opportunity’ to ‘consolidate our market share in the valuable APAC region. We are a company born out of the East, and it remains the cornerstone of our identity and a market to which we are fully committed. I am incredibly excited to bring our products to the discerning Chinese consumer and look forward to working with WHI as we put into practice our strategy for growth’, he enthused.
In its pre-close trading update (21 July), East Imperial reported 32% year-on-year sales growth for the six months to June driven by new customers and strong demand from the existing base.
First half sales in APAC beat management’s expectations as Covid-19 restrictions continued to lift in key markets, with New Zealand and Singapore returning to pre-Covid levels of demand.
In the US, revenue was 37% higher than budget with June being East Imperial’s biggest-ever sales month, boosted by a long-term agreement with Republic National Distributing Company, one of the largest distributors in the US.
Burt stressed that because East imperial sells an ultra-premium product with pricing power, margins are ‘holding up well’.
And while consumers more broadly are feeling the squeeze, the continuing shift towards premiumisation across the beverage industry ‘means that demand for East Imperial’s products remains very resilient despite inflationary pressures as people recognise the unparalleled quality of our product.’