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Brown-Forman CEO Lawson Whiting: UK route to market will ‘reaccelerate growth’

Lawson Whiting, CEO of Brown-Forman, said the launch of the group’s own distribution firm in the UK will “reaccelerate growth” in the market after sales declined due to a “short-term disruption”.

Brown-Forman produces the Jack Daniel’s whiskey brand

Brown-Forman, the Kentucky-based owner of brands such as Woodford Reserve Bourbon and Herradura Tequila, released its third quarter and year-to-date sales last week.

The UK – the group’s second largest market after the US – dropped by 7% during the first nine months of its fiscal year, as a result of “softness in the cash-and-carry channel and short-term disruptions from changes to [Brown-Forman’s] promotional strategy and upcoming route-to-market transition”.

In January this year, Brown-Forman opened its refurbished London headquarters, as it prepares to launch its own distribution company in the UK.

It came just seven months after the group revealed it had reached an agreement with Bacardi to end their distribution partnership in the UK after 18 years.

The firm will take over full control of its route to market in the UK from 1 May.

During a conference call for the results, Whiting said the move “will reaccelerate growth in this market into the next fiscal year and expectations are that this would be the strong market force into the future”.

Speaking to analysts, Jane Morreau, Brown-Forman’s executive vice president and chief financial officer, said the group experienced “some short-term disruption” in the UK and expects “negative trends in this market to ease as we move into next fiscal year”.

‘Lack of attention’

Regarding the distribution partnership with Bacardi, Morreau said the relationship “probably served us quite well”, however the company had a “limited portfolio at that time”.

She said the group had “10, 12, 15 brands” when the deal began in 2012. “Now, combined, we have over 100 brands,” Morreau explained. “So, you can only imagine the lack of attention, focus prioritisation, understanding the consumer and focus on our own portfolio.”

During the call, Whiting also said the “amount of promotion in the UK market got too big” and the group is “trying to reduce that a little bit and get some pricing up”. He added: “We do think in the long run, it’s the smart thing to do.”

Whiting said it was “difficult to quantify the financial impact” that coronavirus would have on the business as the group revised its full-year outlook.

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