Higher costs cut into Spadel profit

Belgian drinks manufacturer Spadel ‘s turnover in 2016 grew several percent, despite a very strong year in 2015. However, because of increased marketing costs, profit dropped.

Strong growth in Belgium

Spadel’s consolidated turnover grew 3.5 % to 250.4 million euro. “This increased turnover despite a extremely favourable July 2015, reflects the bottled water market’s growth which followed the increased consumer demand for natural and healthy products“, Spadel writes. 

Belgian turnover grew 6.7 % mainly thanks to products with smaller volume, designed for consumption on the go. Dutch turnover grew 1.1 % for similar reasons and French turnover went up 1.8 %. The United Kingdom posted the largest growth, up 8.6 %.

Regardless, Spadel’s operating income dropped 18.1 % to 25.1 million euro. “The drop in operating income is mainly because of considerable advertising and sales costs related to the Benelux launch of our newest line of lemonades, based on 100 % natural ingredients.”

Invest in non-fizzy soda

The company’s overall expenses also grew, in part because of an aseptic bottling line and the automization of its supply chain in its Spa plant. The one-time costs related to its Bulgarian Devid AD acquisition were factored into the results. Net profit ended up at 17.2 million euro, down 18.1 % compared to 2015.

For 2017, Spadel will continue to focus on sodas based on natural mineral water, with a new generation of non-fizzy sodas for the Benelux market. Obviously, this will require another marketing push.