Berry Bros. & Rudd, the UK’s oldest fine wine merchant, has reported a dip in annual revenue and a sharp decline in profits amid what it describes as a “turbulent year” for the global luxury wine and spirits market. Despite these challenges, the company significantly increased its investment into future-facing projects and technology, demonstrating a long-term approach to growth.

Tough trading conditions hit profits

In the financial year ending 31 March 2024, Berry Bros. & Rudd saw group turnover fall by 3.3% to £245.98 million, down from £254.28 million the previous year. Excluding en primeur sales, the company also reported a pre-tax loss of £1.2 million, a stark contrast to the £9.46 million profit recorded the previous year.

Chief Executive Officer Emma Fox noted that high inflation, rising interest rates and wider macroeconomic uncertainty all contributed to a challenging business environment. These pressures were compounded by planned investment spending, leading to a 51.2% drop in EBITDA before exceptional items, from £20.67 million in 2023 to £10.08 million this year.

Despite the decline, Fox highlighted that the company’s core fine wine and spirits divisions in the UK and Asia still managed to grow revenue slightly, underscoring resilience in its core markets.

Positive growth in key areas

Not all segments of the business were hit equally. While sales of mature wines and revenue from the company’s fine wine trading platform BBX declined in line with broader industry trends, en primeur sales rose by 15%. There was also a 27% increase in income from fine wine storage, thanks in part to the expanded capacity at the group’s Andover facility, which opened in late 2022.

The events side of the business also showed promise, with revenues climbing 16%, and the company’s own brands and UK distribution arm saw growth of 11.8%. Spirits sales, though modest, continued on a steady upward trajectory.

Customer engagement improved too. Fox noted a rise in fine wine collectors, as well as more frequent purchases across the board, suggesting that the company’s long-term relationships with its clientele remain strong even in uncertain times.

U.S. market struggles amid changing consumer behaviour

The company's performance in the United States proved more challenging, with sales falling by 8.8%. According to Fox, this reflected the broader economic slowdown in the U.S. as well as a significant shift in consumer behaviour following the pandemic.

A key part of the decline stemmed from the group’s American spirits import arm, Hotaling & Co., which saw EBITDA fall by 41.7%. The post-COVID spirits boom appears to have subsided, as distributors grapple with reduced margins, overstocking and erratic consumer patterns.

These U.S. market difficulties contributed significantly to the group’s overall earnings drop, but Fox remains optimistic about long-term prospects.

Investing in resilience and long-term success

Despite the dip in profits, Berry Bros. & Rudd doubled down on its commitment to future growth. The company invested £27 million during the year into new technologies, business ventures, and brand development. Brand investments alone rose from £10.33 million in 2023 to £15.12 million in 2024, much of which was accounted for in profit and loss.

Chair Lizzie Rudd echoed this future-focused mindset, praising the team’s adaptability during difficult conditions. She pointed to strategic moves such as the acquisition of a minority stake in Cotswolds Distillery and the partnership with Symington Family Estates to acquire Hambleden Vineyards—England’s oldest commercial vineyard—as examples of forward-looking investments.

“We expect the market challenges of the past year to persist,” Rudd said. “But our strategy and strong financial position put us in a great place to seize new opportunities.”

To support continued confidence, the company declared a dividend of 1310p per share—split across October and January payments—highlighting “sustainable underlying growth” despite market volatility.

As the fine wine sector adjusts to changing economic winds, Berry Bros. & Rudd is focusing on agility, innovation and diversification. With firm roots in tradition and an eye on modernisation, the business aims to solidify its role as a global leader in premium wine and spirits for years to come.