Beam Suntory reports ‘flat’ full-year results
Maker’s Mark owner Beam Suntory reported stagnant net sales for 2020, despite Jim Beam surpassing 11 million cases for the first time.
Beam Suntory, owner of brands such as Courvoisier Cognac and Sipsmith gin, said net sales for its 2020 full year were ‘flat’. The company was hit by the pandemic, which led to lower sales in markets including Spain, India, China, South Africa and global travel retail.
Beam Suntory said a rebound in growth during the second half of 2020 offset lower sales in the first six months. The firm saw net sales decline 3% in the first half of 2020.
“As we expected, consumer demand increased in the second half of 2020, even as the global pandemic continued to impact markets around the world,” said Albert Baladi, president and CEO of Beam Suntory.
Beam Suntory’s sales increased by 4% in the US, due to ‘improved’ movement in the on-trade during the second half of 2020. The firm also said spirits continued to gain share from beer and wine.
Japan’s sales were ‘flat’ while the UK and Russia recorded single-digit growth. Australia and Canada’s sales grew by high single digits, and Germany and South Korea experienced double-digit gains.
The second biggest-selling American whiskey brand in the world, Jim Beam, exceeded 11 million nine-litre cases for the first time last year. Beam Suntory noted that Basil Hayden’s Bourbon, Hornitos Tequila, and Japanese brands Toki whisky and Roku gin grew sales by double digits.
Furthermore, Beam Suntory highlighted ‘exceptionally strong’ sales for Japanese ready-to-drink products and bottled cocktail range On The Rocks, which the firm acquired in September 2020. The company said growth was boosted by consumer demand for convenient formats, refreshment and quality cocktails.
Baladi added: “We were able to meet consumers digitally in the emerging ‘home premise’ to support at-home cocktail making and satisfy their expectations for convenience through increased investments in e-commerce and ready-to-drink products.”
Looking to the next financial year, Baladi noted the ‘uncertain’ pace of recovery from the global pandemic.
He said: “In this environment, we expect to drive continued improvement in sales as we benefit from the strategic investments we made in 2020, the exciting brand plans we have in place, and our commitment to delivering quality to consumers at every step of the value chain up to the moment of consumption.”
Beam Suntory previously reported a mid-single-digit revenue increase in 2019, but was impacted by EU-US tariffs on American whiskey.
New sustainability strategy
Beam Suntory also said it had made ‘substantial progress’ in cutting its impact on the environment in 2020. The firm plans to unveil a new global sustainability strategy with ‘ambitious’ goals.
Beam Suntory provided an updated on its Growing for Good initiatives, which included a reduction of its scope one and two carbon emissions by 25% compared to 2015. In addition, the firm decreased its water use per unit of production by 29% through optimising existing cooling systems and investing in more efficient cooling technologies across Jim Beam distilleries in Kentucky.
The company continues to expand watershed protection activities at its manufacturing sites in India, Mexico, Spain, US Virgin Islands and Ireland. It will also be expanded to Scotland, France and Canada.