‘Loyal’ customers help alcohol subscription service Beer52 weather disposable income hit
A “loyal” customer base helped alcohol subscription service Beer52 weather the “challenging trading environment” during its latest financial year.
The Edinburgh-based company said its results have been impacted by high inflation, which hit consumer sentiment and disposable income.
As a result, Beer52 said it changed tack from focusing on revenue growth to “sustainable” profitability during the year to June 30, 2023.
Newly-filed accounts for the financial year show the company’s revenue fell from £39.7m to £35.3m and its pre-tax losses widened from £271,963 to £976,292.
Beer52’s gross profit also fell from £9.4m to £8.3m over the same period.
As well as Beer52, which the group states is the largest craft beer subscription club in the UK, it also runs Wine52, which it says is the country’s fastest-growing wine subscription club.
The results come after Beer52 acquired certain trade and assets from online craft beer and cider distributor EeBria a day after it entered administration.
A statement signed off by the board said: “The financial year reflected a period where the UK economy adapted to a high inflation environment, negatively impacting consumer sentiment and disposable income, which created a more challenging trading environment for the company.
“Reflecting the macro trading environment, the company transitioned from a focus on revenue growth to sustainable profitability during the year.
“This saw measures to protect margins via contract renegotiations with key suppliers to mitigate inflationary cost pressures within the supply chain, tight cost control and a disciplined data-led approach to marketing investment in new customer acquisitions, with aggregate marketing spend down 30 per cent on prior [the] year.
“The directors are satisfied with the performance of the company during the period with revenue, whilst down 11 per cent on the prior financial year, remaining materially higher than pre the Covid-19 pandemic.
“Both clubs showed strong resilience during the year with each benefitting from a loyal membership base.”
Beer52 added: “Using a data-led approach, Beer52 remains focused on sustainability – growing both the beer and wine clubs in the year to come.
“As a result of the actions taken during the year, the company saw a significant improvement in underlying trading and key metrics during the seance half of the financial year which have continued into the current trading period.”
Beer52 was founded by Fraser Doherty, who also established SuperJam and Envelope Coffee.
Mr Doherty holds a significant stake in the company while the likes of The University of Dundee and KM Capital are also shareholders.