Brown-Forman sales boosted by Jack Daniel’s
Finlandia Vodka owner Brown-Forman saw net sales increase by 8% for the nine months ending 31 January 2023, bolstered by Jack Daniel’s Tennessee whiskey.
During the first nine months of the financial year, reported net sales reached US$3.2 billion, year on year.
Portfolio growth was bolstered by Brown-Forman’s Tennessee whiskey brand Jack Daniel’s in international markets and the travel retail channel. Jack Daniel’s also saw gains for its Tennessee Fire and Tennessee Honey whiskeys. Sales also benefitted from the launch of the brand’s Bonded bottling.
Across the same nine months, reported operating income fell by 13% to US$829 million.
Reported net sales for the three months to 31 January 2023 increased by 4% to US$1.bn, compared to the same period last year.
However, in the third quarter (Q3) its operating income plummeted by 50% to US$173m, due to a lower gross margin, higher operating expenses, financial setbacks from the acquisitions of Gin Mare and Diplomatico rum, and a non-cash impairment charge of US$96m for Finlandia Vodka.
An impairment charge is a process businesses use to write off assets that have dropped in value.
Lawson Whiting, Brown-Forman’s president and chief executive officer, said: “Brown-Forman continues to deliver strong net sales growth year-to-date, as we executed our strategic priorities and invested boldly behind our brands and our people.
“Even as trends begin to normalise, we believe our business will remain robust given the premiumisation of our portfolio, the health of our brands, and the resolve of our people. We also believe our long-term perspective enables us to navigate the changes of our world and drive consistent, reliable growth year after year.”
During Brown-Forman’s first three quarters, results showed a ‘broad-based’ reported net sales growth across all ‘geographic clusters’, and the travel retail channel was driven by strong consumer demand. Sales benefitted from the launch of Jack Daniel’s Bonded, as well as the rest of its portfolio.
The firm’s first six months (H1) of the 2023 fiscal year (May-October 2022) saw double-digit growth of 11%, as it reported a net sales increase to US$2.12bn compared to the same period last year.
Premium Bourbons witnessed a 33% reported net sales growth, as Woodford Reserve and Old Forester welcomed demand in the US.
Brown-Forman’s ready-to-drink (RTD) offerings also proved to be popular with consumers.
RTD cocktail New Mix gained market share in Mexico as reported net sales of the brand saw a jump of 45%.
Jack Daniel’s RTDs grew by 6%, led by Australia and Germany. Brown-Forman’s Tequila portfolio delivered double-digit net sales growth of 12%, with El Jimador rising by 18% and Herradura by 10%.
Reported net sales in Brown-Forman’s largest market, the US, grew 4%. This was backed by Woodford Reserve, and the Jack Daniel’s family of brands.
Meanwhile, sales in emerging markets rose by 18%, which includes the success of Jack Daniel’s in the United Arab Emirates and Brazil.
The travel retail channel sustained strong growth, up by 48%.
Brown-Forman anticipates strong growth in 2023 despite ‘macroeconomic volatilities and geopolitical uncertainties’. It also expects high-single digit organic operating income growth this year, despite the dip so far.
In October 2022, Jack Daniel’s released an American single malt whiskey aged in charred white oak barrels and finished in Oloroso sherry casks.