Organic net sales growth for Brown-Forman in its third quarter of FY23 has driven by Jack Daniel’s Tennessee Whiskey in its international markets and Jack Daniel’s RTDs in Australia and Germany.
Brown-Forman’s President and Chief Executive Officer Lawson Whiting said: “RTDs remain the third largest contributor to overall company growth, driven by the consumer trends of convenience and flavour. Jack Daniel’s RTDs grew organic net sales 10% and New Mix delivered 41% organic net sales growth.”
In the nine months ended January 31, 2023 reported net sales increased 8% to $3.2 billion (+12% on an organic basis) compared to the same prior-year period.
“Brown-Forman continues to deliver strong net sales growth year-to-date, as we executed our strategic priorities and invested boldly behind our brands and our people,” Whiting said.
“Even as trends begin to normalize, we believe our business will remain robust given the premiumization of our portfolio, the health of our brands, and the resolve of our people. We also believe our long-term perspective enables us to navigate the changes of our world and drive consistent, reliable growth year after year.”
Portfolio growth was led by Jack Daniel’s Tennessee Whiskey with reported net sales growth of 6% (+12% organic), continued very strong double-digit growth of Woodford Reserve as reported net sales increased 34% (+35% organic) and RTDs, with double-digit reported net sales growth of 12% (+15% organic) fueled by New Mix and Jack Daniel’s RTDs.
Whiting told an analysts call: “I wanted to take a moment to step back and acknowledge that it has now been three full years since March of 2020, which for Brown-Forman and the world was the start of the COVID-19 pandemic. Since that time, we’ve experienced significant volatility and uncertainty, while always remaining focused on the long-term health and growth of our portfolio of brands and our people.
“Consider that during this three-year time period, we added two new super premium brands in Gin Mare and Diplomático and we divested others. We just launched a major global initiative with Jack & Coke. We grew by more than 500 employees as we evolved our route to consumers in five markets, strengthened our integrated marketing communications capabilities and grew our emerging brands’ teams among other changes.
“And importantly, compared to the first nine months of fiscal ’20, we grew Jack Daniel’s Tennessee Whiskey by 1.5 million cases and Woodford Reserve by 500,000 cases even amid severe supply chain constraints.”
Jack Daniel’s an international success
The Jack Daniel’s family of brands reported net sales growth of 5% (+11% organic) was driven by Jack Daniel’s Tennessee Whiskey in international markets and the Travel Retail channel. Continued consumer desire for convenience and flavor drove gains in Jack Daniel’s RTDs, Jack Daniel’s Tennessee Fire, and Jack Daniel’s Tennessee Honey. In addition, reported net sales also benefited from the launch of the brand’s new Jack Daniel’s Bonded.
Premium bourbons propelled by very strong double-digit net sales growth from Woodford Reserve and Old Forester, delivered 33% reported net sales growth (+34% organic) driven by stronger consumer demand in the United States, partially due to the estimated net increase in distributor inventories.
RTDs growth was driven by New Mix, which gained market share in Mexico as reported net sales grew 45% (+41% organic), fueled by higher volumes and prices. Jack Daniel’s RTDs grew reported net sales 6% (+10% organic) led by Australia and Germany.
Reported net sales for the tequila portfolio increased 12% (+11% organic) with el Jimador and Herradura both delivering double-digit reported net sales growth. el Jimador grew reported net sales 18% (+19% organic) led by growth in the United States and Mexico. Herradura increased reported net sales 10% (+9% organic) driven by volumetric growth in the United States, partially due to an estimated net increase in distributor inventories, and higher pricing in Mexico.
High hopes for international Jack & Coke launch
Brown-Forman and The Coca-Cola Company created global headlines in June last year when they announced a partnership to debut the iconic Jack & Coke cocktail as a branded RTD.
The Jack & Coke can and packaging will feature both brands’ trademarks and a zero sugar version of the beverage will also be available.
“While we only have a couple of months of data from the distributors, since the November launch in Cancun, Mexico, the early results are certainly very positive,” Whiting said.
“They shared that the 9-liter case volume of the Jack Daniel’s and Coca-Cola RTD significantly exceeded the volume of the Jack Daniel’s & Cola RTD in the equivalent two-month period a year ago. They reached the distribution target within days of launch, showing the excitement and enthusiasm from the retailers. And the consumer repurchase rate is encouraging. The experiences and learnings from Cancun has helped to set the stage for a successful national launch across Mexico, which began in early February.
“These learnings will also be shared with other markets that are launching soon, including the United States, a number of European markets as well as Japan. For these initial markets, cans are now rolling off their production lines and will be on retailer shelves in cold boxes in late March and early April.”
An Australian launch is also in the works.
Whiting said: “If you look at the US, and it’s going to be also similar for Germany and Australia, which are two really big RTD markets, we’re going to handle the manufacturing and the distribution. And so US, Australia, Germany, you will see the revenues, the brand expense, the costs all in our P&L.”