ILG reports modest growth in challenging economic times

An impressive turnout of members of the Independent Liquor Group (ILG) came together in Brisbane recently to celebrate the cooperative’s annual Family Reunion.

Delegates celebrated another successful year for ILG, despite the ongoing challenges brought on by the current economic environment. During the week, members took the opportunity to network and learn valuable insights about the group and wider industry.

ILG CEO Paul Esposito discussed the cooperative’s financial performance over the past 12 months, highlighting the impact of economic downturns and inflation on disposable income. Despite challenges, the cooperative returned around $20 million in cash and non-cash benefits to members.

Key strategic initiatives included asset acquisitions in Sydney and Townsville, a new property in Brisbane, and further expansion into Victoria. Sales revenue growth was just under 5.5 per cent, with a 1.8 per cent decline in the bottom line.

Looking ahead, the cooperative aims to grow its member base to 2100 and achieve a $550 million target for the next year, focusing on growth, culture, and future proofing.

Speaking to National Liquor News, Esposito described the group’s performance over the last 12 months as “a tale of two halves”.

He said: “In the first half of the year we saw double-digit growth, then we started to see a slowdown around Christmas. There was a change in buying patterns and we started to see more discounted brands being sold. We saw a fall in the average basket size and a move to value lines.

“Suppliers responded to the declining market conditions and have made adjustments. Spirits companies moved to keep some 700ml spirits under $45 and one litre under $60. RTD cubes were over $100 but they brought them back down under $100.

“In the last quarter we were slightly above last year, but short of what we budgeted for. Overall, we finished with 5.5 per cent growth in value and 3.3 per cent growth in volume, which is a great result considering the current cost-of-living pressures,” said Esposito.

Chairman’s Report

In his Chairman’s Report, Damien Bottero expressed the benefit of being a part of the ILG co-operative and how important members are to shaping ILG’s success.

“Whether you’re a long-time member or are new to ILG, your involvement here is not only valued, but also essential. Together, we are shaping the future of the liquor industry,” he said.

“2024 was a year full of challenges but also opportunities for ILG and all of our members. Our financial results reveal a story of resilience amidst an uncertain economy. We have achieved more than $520m in sales, marking a six per cent increase on our previous year. An incredible milestone for our co-operative. In addition, we’ve distributed approximately $13.5m in member rebates and $5.7m in non-cash benefits, reflecting our commitment to our members.

“While we anticipate a temporary loss this year, this does align with our long-term strategy. Rather than incurring debt, we’ve chosen to invest our growth through working capital.

“Over the past four years, ILG has experienced tremendous growth with very limited resources. In 2024, we expanded our teams across trading, supply chain, finance, e-commerce and marketing. Our people are truly the cause of our success.

“We’ve also made significant investment in e-commerce and digital marketing tools, allowing members to improve their revenue streams. Also, with rapid growth in Victoria and Queensland we partnered with a third-party logistics company to streamline deliveries and expand our warehouse to better serve our members.

“These investments made a solid foundation for the future of ILG, which is important to us all,” Bottero explained.

“This year, we successfully expanded our retail base in Victoria, while continuing to grow in NSW, ACT, and Queensland. We launched e-commerce and digital wallet applications to drive foot traffic to both physical and online stores. And under the guidance of our director Sergio Colosimo, we secured a built for lease contract for our new Queensland distribution centre, with construction already underway, and completion expected in August 2025.

“Let us reaffirm our dedication to ensuring the success and longevity of independents in the liquor industry. Together, we empower one another through the strength and the benefits of being Australia’s largest member-owned co-operative. Remember, our members are not just independent, we are family.”

Looking to the future

Even under the current challenging trading conditions ILG’s footprint has grown. Membership is up and a new property in Ipswich is due to start trading in August 2025.

“The benefit for us is our footprint in Victoria is expanding. Total membership is up to 1700, with 70 applications pending approval. So that’s fantastic,” said Esposito. “We have big plans for Queensland as well. We’re opening a new 17,000sqm property in Ipswich, scheduled to be operational by September 2025. The site will be purpose built for ILG.”

On an MAT growth, ILG is 5.5 per cent up, and Esposito says, “we’ve still got that momentum and we’re growing”.

Esposito highlighted positive indications from the past four-week period, which has seen favourable trading in our retail channel. ILG has seen a slowing in decline in the on- premise trade, but Esposito is hopeful to see a bounce-back with upcoming Christmas activity.

Looking state-by-state, NSW has seen 6.4 per cent growth in value and 6.1 per cent in volume. Queensland has seen 8.3 per cent growth in value and 4.7 per cent in volume. And Victoria has seen 27.3 per cent value growth and 24.2 per cent volume growth.

And breaking down banner performance, Super Cellars was up 9.2 per cent in revenue nationally, with all categories showing growth outside of tobacco.

Bottler saw revenue growth of 4.3 per cent nationally, with all categories showing growth aside from a slight decline in beer and tobacco.

Fleet Street saw 10.1 per cent revenue growth (in NSW and Queensland) with the banner also now expanding into Victoria. Most categories performed well with the exception of wine, non-alc and tobacco, which all saw a slight decline in revenue.

Looking ahead to 2025, ILG is projecting $550m in revenue with 2100 members/customers in 2025. The co-operative has goals to grow Supercellars membership to 370, Bottler membership to 410, Fleet Street membership to 45, and grown Victorian revenue to $30m.

On the final night of the Family Reunion, members came together to enjoy a gala dinner where they were celebrated for their efforts with an awards ceremony. During the night, ILG Board Member Bob McGhee presented a $10k cheque to Friends with Dignity, a not-for-profit registered charity that provides practical programs to assist victim-survivors of domestic violence.

Esposito also took the opportunity to announce the destination for the 2025 International Study Tour, which will head to Spain and Portugal and will coincide with the co-operative’s 50^th year of trading.