Brown-Forman has reported flat sales in Australia in HY2020, with underlying net sales growing 2%, led by higher prices and increased volumes of Jack Daniel’s Tennessee Whiskey.
CFO Jane Morreau said: "Australian and France contributed solid underlying sales growth with takeaway trends in both markets improving significantly for the most recent six-month period compared to a year ago."
Globally, the company’s reported net sales increased 5% to $1.8 billion (+3% on an underlying basis) for the first six months of the fiscal year.
Reported net sales benefited approximately 1% due to the net change in distributor inventories related largely to the launch of Jack Daniel’s Tennessee Apple.
CEO Lawson Whiting said: “As expected, our results improved during the second quarter. We continue to deliver solid underlying growth from both a geographic and portfolio perspective, despite the uncertain global economic and geopolitical environment.
"Today, we reaffirmed our underlying net sales outlook for the year and remain on track to deliver another year of mid-single digit growth in underlying net sales led by the Jack Daniel’s family of brands, including the launch of Jack Daniel’s Tennessee Apple in the United States, as well as sustained double-digit growth from our premium bourbon and tequila portfolios.
“We continue to build our business for the long term. Our takeaway trends remain healthy in many major markets as we continue to invest in consumer momentum by absorbing most tariff-related costs.
"We believe this, coupled with increased investments in advertising and route-to-consumer changes in certain markets, position us well for the next generation of growth.”
Year-to-date highlights for Brown-Forman
The company’s premium bourbons grew underlying net sales 22% (+28% reported), driven by Woodford Reserve’s 20% underlying net sales growth (+25% reported) and even stronger rate of growth from Old Forester.
"Jack Daniel's super premium portfolio, the biggest of which would be Gentleman Jack, is approaching 900,000 cases worldwide and serves as a way to really premiumise the trademark," said Whiting.
"Our Jack Daniel's flavours continue to bring new consumers into the franchise as evidenced by our eighth consecutive year of growth for Jack Daniel's Tennessee Honey, our fifth consecutive year of growth project Daniel's Tennessee Fire and we anticipate similar success with the launch of our new flavor introduction innovation in Jack Daniel's Tennessee Apple. So it's very early. Certainly, the consumer excitement for this product seems to be very high."
Morreau was equally buoyant about the success of Jack Daniel’s Tennessee Apple, which has been charcoal mellowed and matured in new American oak barrels and apple-flavoured liqueur.
"We're in the very early days of Jack Daniel's Tennessee Apple launch. But so far with about four weeks of takeaway information that we have available to us, it's comparing favorably to our launch of Fire and Honey," she said. "So we're certainly cautiously optimistic at this point, the trade and consumer reactions have been quite favorable."
She was also excited by the future of bourbon in emerging markets such as India and China.
"And we remain very encouraged by China and India's strong double-digit underlying net sales growth, led by the Jack Daniel's family of brands and our single malt scotch portfolio, as we believe we have only just begun to reach consumers in these markets where the long-term potential is so significant," Morreau said.
Brown-Forman's tequila portfolio grew underlying net sales 11% (+10% reported), led by Herradura’s 19% underlying net sales growth (+21% reported) and el Jimador’s 13% underlying net sales growth (+8% reported).
Australia's favourite Jack Daniel's RTDs are also taking off around the world, delivering volumetric gains producing underlying net sales growth of 7% (+6% reported). Germany’s flat underlying net sales were offset by the continued volume growth of Jack Daniel’s RTDs, while France grew underlying net sales 3% (+4% reported) led by volume gains for Jack Daniel’s Tennessee Honey and the launch of Jack Daniel’s RTDs.
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