Innis & Gunn has reported a 1% fall in turnover to £21.1m, as it was hit by the Omicron outbreak and delayed year-end shipments.
The Edinburgh-based brewery's financial results ending December 2021 showed that it achieved positive earnings before tax in the second half of last year, with third quarter turnover 23% higher than 2020.
However, the impact of the most recent strain of Covid-19 in late November, alongside supply chain issues, resulted in a sales outturn lower than in 2020.
Gross profit margin rose by 3%, driven by the return of on trade and hospitality sector, delivering total gross profit of £7.4m in 2021 - up 7.4% increase from 2020.
The company's lager continued strong performance in the on-trade, with an exponential rebound of sales and 61% rise in volume year-on-year.
Innis & Gunn retail also performed well on the back of the four existing brewery taproom reopenings. There was a resultant 84% increase in draught sales, "demonstrating a gradual return to pre-pandemic normality".
A new at-table app proved a success, accounting for 32% of all sales and more than 25,000 downloads. A new dedicated marketing resource was also put in place to focus on social channels and the overall taproom experience, with social engagement growing by 110% year-on-year, the consumer database rising 308% and online bookings being up 382%.
In the off-trade, Innis & Gunn remains Scotland’s number one craft beer brand and Scotland’s second biggest beer brand. Inveralmond Ossian grew 44% year-on-year and is now the seventh largest mainstream ale brand in Scotland.
A 0.0% lager was launched, with listings at Tesco Scotland and further retail deals expected this year, while investment continued in the limited-editions programme, with four beers released – Islay Whisky Cask, Kriek, Vintage and Vanishing Point 05.
Meanwhile, additional manufacturing, systems and processing costs were incurred in relation to the rebrand projects, as the use of single use plastic was ended and the company moved to more sustainable headquarters at Orchard Brae House.
Internationally, Innis & Gunn’s total portfolio was up 3.4%, with Caribbean Rum Cask and Session IPA in double digit volume growth in Sweden, despite the total ale category falling by 0.4%. In Canada, the brewer ran its largest product display activation across more than 200 stores, which resulted in a 33% increase in sales.
Exports via the Sovereign Beverages partnership delivered an increase of over 40% year-on-year, with new listings secured in Switzerland and Columbia.
Founder and master brewer Dougal Gunn Sharp commented: “Our performance in 2021 has been extremely encouraging, although revenues ended marginally down on the previous year - in half two we were profitable, despite the continued disruption of lockdowns, restrictions and the well-documented UK and international supply chain issues.
“We are witnessing post-covid recovery on the back of the on-trade reopening, consumers are returning to bars despite growing inflationary pressures on spending and costs.
“Whilst we continue to face an uncertain outlook for consumers and businesses, 2022 is the year in which we will build - we have agility in our cost base and discretionary areas of spend, which affords us a high level of flexibility to help compensate against price fluctuations.
“The worst of the pandemic seems to be behind us and as the on-trade returns to normal, so does our focus on driving the sales momentum we know our brand is capable of in the UK, “ he continued, adding: “That said, no-one in this business is complacent, we have big ambitions for Scotland’s best lager and a passionate and highly experienced team that is focused on delivering growth, despite the ongoing economic challenges we all face.”
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