Sales for Brown-Forman Australia surged 28% in the nine months to January 31, 2021, with the company crediting the country’s economic response to COVID-19 as a contributing factor.

In the US, sales were up 7%. Globally, the company’s reported net sales of $2,649 million, up 2% on an underlying basis, compared to the same prior-year period. Year-to-date reported operating income increased 10% to $998 million (+3% on an underlying basis). 

Lawson E. Whiting, President and CEO, said countries that had fiscal stimulus from their governments had done “remarkably well” during difficult times.

“It’s interesting, we did a bit of a study on which markets are growing really nicely this year and Australia and Germany … some of these really big markets that have done really, really well,” he noted.

High single-digit underlying net sales growth in developed international marketswas fuelled by Jack Daniel’s RTDs – up 34% in Australia – the ongoing launch of Jack Daniel’s Tennessee Apple, Jack Daniel’s Tennessee Honey, and its super-premium American and Scotch whiskeys. These gains, along with strong growth in the off-premise channel, were partially offset by lower volumes of Jack Daniel’s Tennessee Whiskey due to COVID-19 related restrictions, which severely limited and in some cases entirely shut down the on-premise channel.

However, the company said it continued to experience very strong growth in the off-premise, which was more than offsetting the on-premise volumetric weakness. Brown-Forman’s portfolio’s explosive growth in the e-commerce channel has continued to expand at triple-digit rates.

Australia’s innovations in RTD space

Whiting pointed to the strength of the RTD category globally, saying it was “on fire”.

“Benefiting from the convenience trend, the RTD category has been exploding in many parts of the world,” he said. “We continue to see strong growth from our Jack Daniel’s spirit-based RTDs in markets like Australia and Germany and while in its first year, we’re pleased with the performance of our spirit-based RTDs in the US.

“The RTD business is much, much larger outside of the US than it is inside the US. It’s like 3.5 times the size in the international markets than it is in the US. Germany’s business is well over one million cases now and very, very profitable and doing very, very well. Australia has been one of the largest RTD markets in the world for quite some time. And that business is really strong.

“Based on off-premise takeaway data in the major markets of Australia, the UK, Germany, and France, each are growing double-digits and gaining value share.

Whiting also praised innovations by Brown-Forman Australia in the RTD space.

“innovation is becoming increasingly important now,” he said. “The RTD category for as long as we’ve been in it, has been heavily reliant on innovation. Australia would be the best example of that and every year, they come up with something new and different pack sizes, and proofs, flavours and mix, all the rest of it. And so we’ve been doing that for quite a long time and that will continue. So the RTD space, I would rate us high on having the supply chain and the ability to forecast where the consumer is going in that space.”

Looking ahead, Brown-Forman said it expects to continue to face uncertainty related to the evolving COVID-19 pandemic and its effect on the global economy. As a result, no quantitative guidance is being provided by Brown-Forman for fiscal year 2021.

Jane Morreau, Executive Vice President and CFO, noted: “While near-term uncertainty remains, we believe we are operating from a position of strength, and will emerge even stronger from this crisis, continuing to grow market share and drive long-term sustainable growth for all stakeholders.

“The company’s financial and business fundamentals have remained strong throughout the entire pandemic allowing us to deliver solid growth in this challenging environment.”

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