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Beam Suntory buoyed by emerging markets

Suntory Holdings’ spirits arm Beam Suntory posted “mid-single-digit” growth in its 2016 fiscal year, spurred on by significant emerging market gains and a “strong” Americas region.

While the company’s alcoholic beverages segment, including wine and beer, saw net sales slide 3.6% year-on-year to ¥988.7 billion (about US$8.7bn), the spirits division outperformed with strong growth noted for Jim Beam and Maker’s Mark Bourbons, Hornitos Tequila and the Japanese ready-to-drink (RTD) lines.

Mid-single-digit sales reflected a “strong” US performance, with “double-digit” gains reported in “emerging” Spain, India and south east Asia.

Suntory Spirits Limited, the division’s Japan business, posted 3% gains with Jim Beam, Torys Classic and single grain whisky The Chita delivering “significant” growth.

The RTD business also shone, with volumes climbing 14% on strong consumer demand for canned Highball serves, -196ºC Strong Zero and Horoyoi.

While Suntory’s net sales for the wider sector were down overall due to adverse currency impact, operating income climbed 12.7% to ¥88.3bn (about US$777,800) .

Although Suntory noted a “mild recovery” in 2016, in its reporting statement the company said the economic environment continued to be uncertain. Over the three Suntory Group segments – non-alcoholic beverages and food, alcoholic beverages and other businesses – net sales decreased by 1.3% to ¥2.6515 trillion (US$23.36bn).

Looking forward to fiscal 2017, the company said it would “respond swiftly to changes in the market environment” with aims to strengthen profitability.

In alcoholic beverages, it will “leverage strong routes to market” with plans to enhance marketing activity in Japan for Jim Beam, Kakubin, Torys Classic, The Chita and key RTD brands.

The company says it is targeting 3.2% net sales gains for the alcoholic beverages segment in 2017, which would see the division cross the one trillion yen mark (about US$8.8bn).

Beam Suntory’s full-year results are in line with Q3 figures when mid-single-digit gains were reported for the business.

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