Jack Daniel's RTDs lead profits for Brown-Forman Australia
Australia has delivered "very strong underlying net sales growth" of 7% for Brown-Forman in the nine months of fiscal 2019, driven by Jack Daniel's RTDs.
The result was led by higher prices of core Jack Daniel's RTD brands, Jack Daniel’s & Cola and Jack Daniel’s Double Jack, along with volumetric growth of Jack Daniel's Tennessee Whiskey.
Jack Daniel’s maintained its position as the number one most valuable spirits trademark in Australia last year, while Gentleman Jack saw growth of 17% year-on-year and Woodford Reserve recorded growth of 34%.
Outside of whiskey, El Jimador was the number one growth driver in Australia, up 17%, while Herradura saw growth of 13%.
In the year-to-date fiscal 2019 - to January 31, 2019 - the company’s reported global net sales increased 3% to $US2,580 million (+5% on an underlying basis).
CEO Lawson Whiting said: “Our portfolio of premium spirits brands delivered solid rates of sustained sales growth, led by the strength of our bourbon and tequila brands, as well as the international expansion of the Jack Daniel’s trademark [such as Double Jack and Dry in Australia]. We remain on track to deliver another strong year of results as cost discipline helped offset some of the large burden we are absorbing due to the retaliatory tariffs on American whiskey.
“The growth opportunity for our brand portfolio remains significant, and our teams around the world are executing on our long-term growth strategy.”
The Jack Daniel’s family of brands grew underlying net sales 4% (+2% reported) globally, and was negatively impacted by approximately one percentage point due to tariff-related lower net prices. Jack Daniel’s Tennessee Whiskey experienced 2% underlying net sales growth (flat reported), driven by volume gains.
Gentleman Jack grew underlying net sales 8% (+8% reported). Jack Daniel’s Tennessee Honey’s underlying net sales gained 6% (+6% reported) and Jack Daniel’s Tennessee Fire increased underlying net sales 6% (+5% reported), fueled by continued global growth for both brands. Jack Daniel’s RTD/RTP business delivered underlying net sales growth of 8% (+3% reported) despite difficult comparisons against last year’s high rates of growth.
Brown-Forman’s portfolio of super-premium American whiskey brands, including Woodford Reserve, Jack Daniel’s Single Barrel and Gentleman Jack, delivered 24% underlying net sales growth (+21% reported), as category trends remain favorable. Woodford Reserve grew underlying net sales 24% (+21% reported) and is enjoying out-sized growth as the leader in the super-premium bourbon category. Old Forester grew net sales double-digits due to volumetric gains and favorable price/mix.
el Jimador grew underlying net sales by 15% (+11% reported), propelled by volume growth and higher prices in the United States as well as strong takeaway trends in Mexico after repositioning the brand in the premium space over the last few years. Herradura grew underlying net sales by 14% (+9% reported), with double-digit gains in the United States and Mexico fueled by continued consumer demand for Herradura Ultra. New Mix’s underlying net sales grew double-digits, helped by new SKUs and innovation including the launch of New Mix Mineral.
Finlandia vodka’s underlying net sales declined 7% (-9% reported). The decrease in underlying net sales was driven by a competitive retail environment for vodka in Poland and the tough prior year comparison when we changed to a new distributor in Russia.
"For many years, Brown-Forman's growth was powered by Jack Daniel's Tennessee Whiskey in the United States but over the last decade, we've invested significantly in the international expansion of the company," Whiting said.
"In terms of our increasing geographic breath, 30 years ago roughly 20% of Jack Daniel's Tennessee Whiskey volumes were from outside the US, today over 60% of the volumes are international and over the last decade 80% of it's incremental growth has come from markets outside of the US.
"Europe and Australia remain solid contributors as we have been steadily investing in our route-to-consumer capabilities."