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Brown-Forman Tequila sales fall 17%
US firm Brown-Forman reported flat organic sales for the first six months of fiscal 2025 after the group’s Tequila and Scotch portfolios struggled.
For the six months ended 31 October 2024, Brown-Forman’s reported net sales fell by 5% to US$2 billion, attributed to the divestments of the group’s only vodka brand, Finlandia, and the Sonoma-Cutrer wine business. The vodka brand’s sale to Coca-Cola in November 2023 resulted in a pre-tax gain of US$92 million.
Organic sales for the second quarter – August to October 2024 – rose by 3% to US$1.1bn, following a 4% decrease in the previous three months.
The group’s Tequila portfolio plummeted by 17%, with a 16% drop for El Jimador after lower volumes in the US and Mexico. Herradura Tequila posted a 13% decrease, attributed to a ‘challenging economic environment’ in Mexico.
Brown-Forman’s whisky division – which covers Scotch, American and Irish whiskey – experienced stagnant sales.
Within this segment, growth came from premium Bourbons Old Forester (up 11%) and Woodford Reserve (up 8%), which ‘outperformed the US whiskey category’. The core Jack Daniel’s whiskey was flat.
The ‘rest of whiskey’ sales, which includes Scotch brands Glenglassaugh, Benriach and The Glendronach, as well as Slane Irish whiskey, plunged by 22%.
The group’s ready-to-drink portfolio was up by 2% organically, with 5% growth for Tequila-based New Mix.
Brown-Forman also reported a stagnant sales performance for the rest of its portfolio, following the recent divestments. The group said this division was partly offset by Diplomático rum, which soared by 90%.
Other brands within this segment include Chambord liqueur, Fords Gin, Korbel Brandy, Korbel Champagne, and Gin Mare, with the latter growing by 13%.
Market performance
During the first half of its financial year, Brown-Forman noted that sales declined in most of its regions, except for emerging markets. In the US, sales slipped by 3%, driven by its flagship Jack Daniel’s expression.
Developed international markets posted a 3% drop, following double-digit gains in the previous year. The decrease was led by the Jack Daniel’s range, the firm’s exit from the vodka category and a decline for Glenglassaugh as a result of the lack of high-value cask sales in the same period in 2023.
Of these markets, only Canada posted growth (up 3%). The UK and Spain both plunged by 11%, Australia fell by 4% and Germany dipped by 2%.
Emerging markets posted a 6% gain, boosted by the Jack Daniel’s family of brands in Brazil (where the firm’s total sales soared by 37%) and Turkey. Revenue in Mexico decreased by 5% and Poland dropped by 3%.
Travel retail sales slipped by 3% due to the super-premium Jack Daniel’s expressions, Woodford Reserve, and the absence of Finlandia.
Return to growth in FY2025
Lawson Whiting, Brown-Forman president and CEO, said the results for the first half of fiscal 2025 “were in line with expectations” with a return to growth expected for the full year.
For its full-year outlook, the company estimates both its organic sales and operating income to rise between 2% and 4%.
Brown-Forman said this performance would be bolstered by gains in international markets and ‘normalising inventory trends’, however it believes ‘macroeonomic and geopolitical uncertainties will continue to create a challenging operating environment’.
Whiting predicts the group’s performance will “accelerate” in the second half of its financial year.
Brown-Forman recently announced that Marshall B Farrer would become chair of the board when Campbell P Brown steps down in July 2025.
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