Iconic Brands experienced what can be classified as a breakout year for the company. In a shareholder letter last week, Iconic Brands CEO, Richard DeCicco noted the strong momentum the company achieved for its diversified product lines since the start of 2020. Additionally, even in these challenging COVID-19 times, the company proved its ability to be nimble and seek opportunities to continue its growth. And with an overall spike in consumer demand for spirits, Iconic has positioned itself to participate in this growth.
A key driver to the company’s growth was its decision to move its sales online to accommodate the growth in demand and provide another distribution channel for its customers. That move is hoping to attract business from a significant spike in online purchasing of alcohol-based products. Because of the timing and attention to the shifting markets, Iconic saw revenue increase by 370% over the fourth quarter of 2019, with that period of revenue growth topping the previous three quarters combined. The company’s total revenue for the full year of 2019 showed solid growth due to a strong fourth quarter. Total revenue for 2019 was $1,210,242, representing an increase of 114% year-over-year.
In its remarks, Iconic also provided a teaser by noting that they are in discussions with a national retail chain to private-label for them, which they anticipate announcing soon.
Bellissima Processo Sales Contribute To Growth
Trends indicate that the wine and spirits sector is experiencing strong signs of growth. That bodes well for Iconic’s online and wholesale business to capture a rising market opportunity. Already, the market demand proved valuable in the first quarter of 2020, with Iconic posting revenues of $405,886, a 233% increase from the prior-year first quarter. That growth was driven by higher sales from its Bellissima Prosecco and Sparkling Wines, and Hooters Spirits. A new product, Bellissima Zero Sugar Sparkling Wine, is reported as becoming a top choice for health-conscious people looking for a healthier wine.
Promoting the Bellissima Prosecco line is Christie Brinkley, the company’s Brand Partner. She was recently featured on Extra and Entertainment Tonight (ET) and was on the cover of the April edition of Wine Enthusiast magazine. She has also been featured along with Bellissima Prosecco and Sparkling Wines on QVC in December, January, and just recently in April.
Notably, Iconic stressed that all of its team members take immense pride in their work and their obligation to its community. In a philanthropic move, the company partnered with Christie Brinkley to donate a portion of the proceeds made from online orders of Bellissima products through the company’s website, bellissimaprosecco.com, which was portioned to Direct Relief to aid in relief efforts for COVID-19. The campaign ran initially in April and was extended through May 2020.
Volume sales came from segments with QVC in December ’19 and January ’20, where an estimated 40,000 bottles of Bellissima Prosecco and Sparkling Wines were sold. A return visit in April ’20 resulted in an estimated $300K worth of product being sold. The company expects to be back on QVC in June, and because of the demand, it will be featuring its Bambini 375ml half bottles.
Meeting Demands Of A Changing Market
According to the CEO update, brick-and-mortar distribution and e-commerce are significant market drivers that exist as a result of the COVID-19 outbreak. With people having to stay home, and many bars are being closed across the country, wine, liquor stores, and e-commerce sites see brisk business. An April 1, 2020 article in Newsweek, “U.S. Alcohol Sales Increase 55 Percent In One Week Amid Coronavirus Pandemic”, highlighted the new demand. Business Insider wrote on April 15, 2020, “E-commerce alcohol sales are exploding, with direct to consumer shipments in March reaching $423 million, slightly more than 20% of the off-premise market, according to Nielsen.” Online sales are booming and are reflected by Amazon (Nasdaq: AMZN) substantially outperforming the S&P. Other online leaders include Walmart (NYSE: WMT) and Netflix (Nasdaq: NFLX).Consistent with that trend, Iconic noted that all of its online platforms are doing well, meeting market needs with solid inventory reserves.
For the remainder of 2020, the company has set some goals and expectations. Highlighted in its update, the company noted experiencing consistent increases in unit sales from October through April. From that, total revenue for Q1 2020 was $405,886 for the three months ended March 31, 2020, and $121,913 for the three months ended March 31, 2019, an increase of 233%. Gross profit, a highly watched number, increased by 279% in Q1 compared to the same period in the previous year. For the FY 2019, total revenue increased 114% year-over-year, driven by sales of Bellissima Prosecco and Sparkling Wines and Hooters Spirits.
Notable too that growth, reported revenue for Q4 2019 increased 370% compared to the same period in the previous year, with the fourth quarter revenue growth greater than the last three quarters combined.
Brand Ambassadors And Private Label Adds Marketing Power
In March 2020, Iconic Brands announced the signing of Chase Elliott, driver of the No. 9 Hooters Chevrolet Camaro ZL1 1LE, as a Brand Ambassador for our premium line of Hooters Spirits in a multi-year deal that includes personal appearances at select Hooters Spirits events. Elliott, the reigning two-time NASCAR Cup Series Most Popular Driver, has won six races since joining the NASCAR Cup Series full time in 2016 with the powerhouse Hendrick Motorsports team and has qualified for the NASCAR Playoffs each season.
The Hooters Spirits Brand is available in Hooters corporate restaurants in 22 states across the United States as well as a growing number of Hooters franchise restaurants, with expansion plans for distribution of Hooters Spirits products into off-premise retail locations. The premium line of alcohol includes Vodka, Gin, Rum (Dark & Light), Tequila (Silver & Gold), American Whiskey, and Hooters Heat Cinnamon Whiskey. The expansion of Hooters Spirits into Hooters franchise restaurants and off-premise retail locations is growing, supported by Hooter’s Spirits to-go by the bottle with purchase of food in all corporate restaurant locations in the states that are eligible. This comes at a time when delivery and online are in higher demand than ever before.
Additional growth during the year is expected to come from BiVi Sicilian Vodka by Chazz Palminteri. This 100% Sicilian Vodka will be marketed later this year with a focus on key target markets. Private label brands in the sector have proven to be extraordinarily powerful, with some private label brands ultimately selling to major manufacturers for more than a billion dollars.
Driving Into 2020-2021
The remainder of 2020 looks to be well-positioned to expedite the growth momentum. The company has established traction for its brands, and the company continues to add more product lines and brands to its portfolio of wines and spirits. Many believe that the company’s strong financial performance has not yet been reflected in its share price. However, the company is emphatic that, in due time, they will be able to produce very meaningful value to our shareholders.
Iconic Brands is not shy to proclaim a primary goal over the next 12 months is to up-list its shares to a national stock exchange such as the Nasdaq or New York Stock Exchange. If that goal is achieved, the move higher can help Iconic on many levels, from business development to sponsorship, analyst coverage, and trading liquidity. It would also create institutional awareness of the value proposition to the marketplace.
Strong growth, compelling brands, and innovative marketing ideas should keep Iconic Brands on investor’s radar. The value proposition from Iconic Brands is already on display, with milestones being reached and new goals set higher. Enjoy the spirit they provide.
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