‘Superb’ year for Brown-Forman as JD sales rocket
Brown-Forman has called 2014 a “superb year” after reporting a net sales increase of 4%, spurred once again by its Jack Daniel’s whiskey portfolio.
The Louisville-based company’s reported net sales rose to US$4 billion, while income increased 6% to US$1.027bn in its full 2014/15 financial year.
In the fourth quarter, reported net sales grew 6% to US$947m and operating income increased a significant 23% to US$232m.
Brown-Forman has attributed its growth to Jack Daniel’s family of brands, the net sales of which increased 8%.
The fast-growing flavoured brand extension Jack Daniel’s Tennessee Honey saw sales rocket 28% in the year, and soared 55% in markets outside of the US following the international roll out of the expression.
Brown-Forman estimates that Jack Daniel’s Tennessee Honey is now the 15th largest spirits brand in the world.
The flagship Jack Daniel’s Tennessee Whiskey approached the five million case milestone following the launch of a “successful” marketing campaign.
In total, Brown-Forman’s super and ultra-premium whiskey brands, including Woodford Reserve family, Jack Daniel’s Single Barrel, Gentleman Jack, Sinatra Select, No. 27 Gold, and Collingwood grew total underlying sales by 16%, surpassing one million cases.
Sales of Old Forester Bourbon jumped 35% in the year. Borwn-Forman is looking to capitalise on demand for Bourbon with the build of a new US$45m distillery and visitors’ centre for the brand.
Herradura Tequila witnessed 5% sales growth, while Finlandia Vodka declined 5% due to weakness in its key market, Poland.
Southern Comfort’s family of brands also experienced a 5% decline in underlying net sales both inside and outside of the US, which Brown-Forman attributed to “pressure” from the growth in the flavoured whiskey category. This is despite a recent image makeover for the brand.
‘Strongest year’ in the US
In terms of markets, Brown-Forman said it “enjoyed one of its strongest years in recent history” in the US, where reported net sales grew 10%.
Sales in France grew an enormous 77% as the company moved distribution in-house. Excluding this change, sales in the market increased by 17%.
Meanwhile, sales in Australia fell 8% due to a “challenging economic backdrop, weak consumer confidence, and a continued consumer shift away from highly taxed spirits”
In the emerging markets, Brown-Forman increased turnover by 9%, however Poland’s results were dragged down by the “rebalancing of channel inventories” and Russia was impacted by “severe economic and political turmoil”.
Global travel retail collectively delivered 5% reported net sales growth.
“Fiscal 2015 was another superb year of comprehensive progress for Brown-Forman. Foreign exchange impact aside, our business performed exceptionally well, and once again delivered underlying growth in net sales and operating income that compares quite favourably to our industry,” said Paul Varga, CEO of Brown-Forman.
“We expect our strong underlying performance to continue in fiscal 2016 as a result of our excellent geographic diversification and our strong portfolio focus led by Jack Daniel’s and our premium American whiskeys.”
Brown-Forman said it anticipates global demand for American whiskey will continue to grow in its 2015/16 fiscal year, estimating a 6% to 7% growth in underlying net sales.
The group revealed just this week that it has made its first foray into the Irish whiskey category with the acquisition of Slane Castle Irish Whiskey, pledging US$50m to build a new distillery in County Meath, Ireland.