Brown-Forman year-to-date sales up 2%
El Jimador owner Brown-Forman saw organic sales for the nine months to 31 January 2025 rise by 2%, but its Tequila portfolio plunged by double digits.
Reported net sales for the nine months were down by 4% to US$3.1 billion, and operating income rose by 5% organically to US$902 million.
Organic sales for the third quarter (November-January) rose by 6% to US$1bn, but were down by 3% on a reported basis.
For the six months ended 31 October 2024, Brown-Forman’s reported net sales fell by 5% to US$2bn.
“We are pleased to reaffirm our outlook for organic top and bottom-line growth in fiscal 2025, and are proud of our team’s ability to deliver industry-leading growth in this challenging environment,” said Lawson Whiting, Brown-Forman’s president and CEO.
“While we anticipate continued uncertainty and headwinds in the external environment, we are also confident that we have the right people, brands, and strategy in place to take advantage of ongoing growth opportunities.”
In January, Brown-Forman revealed it would slash its 5,400-strong global workforce by approximately 12% and close its Louisville-based barrel-making operation by April.
The company disclosed that it had incurred US$33m of restructuring and other charges due to the company’s workforce reduction, the planned closure of its cooperage, and the early retirement benefit offered to qualifying US employees.
Brown-Forman also plans to mothball Scotch distillery Glenglassaugh, with production to be paused indefinitely and an unknown number of roles made redundant.
Tequila sales plunge
Brown-Forman said its year-to-date sales were mainly led by the divestments of Finlandia Vodka (which it sold to Coca-Cola HBC in 2023) and Sonoma-Cutrer wines.
The group’s Tequila sales suffered a 13% organic sales drop in the year to date, as the result of a ‘competitive’ US market and ‘challenging macroeconomic conditions’ in Mexico.
Sales of El Jimador Tequila were down by 11% due to lower volumes in the US and Mexico, which were offset by higher prices in the States. Herradura Tequila also experienced an 11% sales drop after lower volumes in Mexico.
Brown-Forman’s whisky portfolio was up by 2% organically over the nine months, led by growth from American whiskey brands Woodford Reserve (up 10%) and Jack Daniel’s (up 2%). Old Forester Bourbon also rose by 12%.
However, the group’s ‘rest of whiskey’ portfolio (which includes Scotch brands Benriach and Glenglassaugh, and Slane Irish whiskey) decreased by 20%.
The company’s ready-to-drink (RTD) range rose by 6% with the Jack Daniel’s RTD and ready-to-pour line increasing by 3%. Organic sales of Tequila-based RTD New Mix soared by 13%.
The group’s ‘rest of portfolio’ sales (which includes Chambord, Fords Gin and agency brands) were flat as a result of Brown-Forman’s recent divestments, but the group noted ‘positive contributions’ from Diplomático rum and Gin Mare.
Geographically, the group’s biggest market, the US, was down by 1%. The organic sales decrease was attributed to the divestment of Sonoma-Cutrer, lower volumes of Korbel California Champagnes and Jack Daniel’s Tennessee Whiskey, and the impact of shifting RTD production of Jack Daniel’s Country Cocktails to Pabst Brewing Company.
Brown-Forman’s ‘developed international’ markets dipped by 1%, after the absence of Finlandia, negative foreign exchange effects, and lower volumes in South Korea, Germany (down by 4%) and the UK (down by 5%). Spain and France also recorded decreases, down by 7% and 2% respectively.
Australia rose by 1% and Canada was up by 2%.
Emerging markets saw an 8% increase with growth for the Jack Daniel’s portfolio in Turkey, Brazil and the UAE, and higher volumes for New Mix.
Across the emerging markets, sales in Mexico were flat, while Poland grew by 5% and Brazil increased by 14%.
Sales in the travel retail channel fell by 2%, driven by lower volumes for super-premium Jack Daniel’s expressions, and Finlandia’s absence.
Brown-Forman anticipates full-year organic sales growth and operating profit to rise between 2% and 4%.
In December, the CEO of Brown-Forman said the company is “proactively preparing” for any potential tariffs on spirits.
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