Premium brands and core markets boost Beam Suntory H1 sales
Beam Suntory has reported “strong” results for the first half of the year despite “strong headwinds” such as the ongoing trade war that has hit Bourbon sales and the escalating cost of agave.
From January to June, Beam Suntory’s organic sales increased at a mid-single-digit rate, driven by the US and Japan – the firm’s largest markets – as well as Europe, the Middle East and Africa, and Asia Pacific.
In India, China, Southeast Asia and Mexico, Beam Suntory witnessed double-digit gains. The firm said it has “big growth ambitions” in these emerging markets.
In terms of brands, Jim Beam and Maker’s Mark reported mid- and high-single-digit growth respectively, while Hornitos Tequila, Sipsmith and Roku gins, and Toki Japanese whisky grew case volumes at double-digit rates.
According to Albert Baladi, who became CEO of Beam Suntory earlier this year, the group is “determined to drive a higher proportion of sales from premium products”.
He also noted that “strong headwinds” will “continue to challenge [Beam Suntory] in the balance of the year”.
“Specifically, the on-going trade war has impacted our Bourbon sales in the EU and China, and the rapidly escalating costs of agave have created share pressure as we’ve taken price on core Tequila products,” Baladi said.
“With our trademark agility, east-meets-west competitive advantage and proven growth strategy, we feel confident in our ability to manage these challenges, deliver strong full-year results and continue towards our ambition to be the world’s most admired and fastest growing premium spirits company.”
The group’s Japanese arm – Suntory Spirits Limited – recorded 5% sales growth, boosted by Kakubin, Jim Beam, Torys and Maker’s Mark.
Total revenue for the alcoholic beverage segment within Beam Suntory’s parent company, Suntory Holdings, including beer and wine, was up by 4.3% to 364.0 billion yen (US$3.4bn), excluding excise taxes. Operating income was up by 2.7% to 64.1bn yen (US$603 million).