Brown-Forman and The Coca-Cola Company created global headlines this week when they announced a partnership to debut the iconic Jack & Coke cocktail as a branded RTD.

Jack Daniel’s & Coca-Cola RTD will be made with Jack Daniel’s Tennessee Whiskey and Coca-Cola. It will be available in markets around the world, with initial launch planned for Mexico in late 2022.

The Jack & Coke can and packaging will feature both brands’ trademarks and a zero sugar version of the beverage will also be available.

“This relationship brings together two classic American icons to deliver consumers a taste experience they love in a way that is consistent, convenient, and portable,” said Brown-Forman CEO Lawson Whiting.

“Brown-Forman has been a leader in the ready-to-drink category since we launched our first Jack Daniel’s RTD more than 30 years ago. Coca-Cola perfectly complements Jack Daniel’s and our existing RTD offerings, enabling us to accelerate expansion and continue to grow our business around the world.”

When asked what he thought the sales potential of the new product could be in its first 1`2 months, Whiting told Yahoo Finance Live: “We haven’t given any guidance on the absolute size of the product. It is a little bit difficult to know. There is a Jack and Cola product that’s already quite sizeable for us. It’s a big business for us around the world. It’s particularly big in places like Germany and Australia. But certainly, putting the Coke label on the can is a game changer and something that we’re really excited about.”

In regard to the explosion of canned cocktails in the US, Whiting said Australia was a great example of what a mature market looked like for RTDs.

“Consumers love it. I mean, if you take a place like Australia just as an example, the RTD business is much bigger than what we call glass or the bottle of Jack Daniel’s business. So there is a consumer demand for these products,” he said.

“And when the pandemic hit, the business absolutely went on a rocket ship and really took off as consumers were consuming at home, as opposed to in the bars and restaurants. And so, yeah, there’s a proven consumer demand for these RTD products. Obviously, there’s a lot of people getting into the business right now, but they’re not getting in with two of the biggest trademarks in their respective categories in the world. So, yeah, we’re quite optimistic.”

Global appetite grows for Jack Daniel’s

Last week, Brown-Forman reported its financial results for its fourth quarter and fiscal year ended April 30, 2022, with net sales of $996 million, an increase of 23% (+27% on an organic basis).

For the full year, the company’s reported net sales increased 14% to $3,933 million (+17% on an organic basis).

Jack Daniel’s Tennessee Whiskey fuelled overall company performance, with 20% reported net sales growth (+23% organic). Jack Daniels RTDs delivered another year of double digit organic net sales growth for the fiscal year lapping very strong prior year comparisons, largely driven by Australia and Germany. 

Whiting foreshadowed the Coke announcement, noting: “While the majority of our RTD business is international driven by Australia and Germany, we believe the combined consumer trends of flavour, convenience and premiumization are driving demand for spirit based RTDs in the US and creating additional opportunities for growth.

“With the strong consumer popularity of our spirit-based Jack Daniel’s RTD in the US, we’re going to expand the US launch of our Jack Daniel’s spirit-based RTD, which has been incredibly well received by the consumer.”

Coke pins its hopes on adult beverages

Coca-Cola’s partnership with Brown-Forman following the company introducing several new flavoured alcoholic beverage offerings in recent years. However, this is the first pairing for its namesake soft drink.

Coca-Cola has teamed up with Molson Coors on Topo Chico Hard Seltzer, which is available in more than 20 markets, and Simply Spiked Lemonade, which is available in the United States. It also collaborated with Constellation Brands on Fresca Mixed, a line of spirit-based, canned cocktails in the United States. In addition, Coca-Cola offers Schweppes pre-mixed cocktails, which are currently available in Brazil. 

Chairman and CEO of The Coca-Cola Company James Quincey said: “We keep consumers at the centre of everything we do as we continue to develop our portfolio as a total beverage company, and that includes new products with our iconic Coca-Cola brand,” said “We are excited about our new relationship with Brown-Forman and look forward to the introduction of Jack Daniel’s & Coca-Cola.“

Analysts applaud the move

According to Seeking Alpha, analyst Cowen sees upside for both Brown-Forman and Coca-Cola in the deal.

“For Coca-Cola, the deal is another expansion of its portfolio into alcoholic beverages, while Brown-Forman is seen benefiting with the Jack Daniel’s brand being under-penetrated in emerging markets and the KO heavyweight presence giving it a tremendous brand building opportunity,” the site notes.

Whiting agrees: “We see this as an emerging market play in places like Africa and India, where we’re not as big. It’s exciting in those markets where consumers often can’t afford an entire bottle of Jack Daniel’s, but they can afford a can of Jack and Coke. And so it’s an entree into some of these markets for us and another reason why we feel pretty good.”

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