Growing consumer preference for premium spirits, coupled with an increased presence in the American whiskey and tequila categories, is helping to boost Jack Daniel's parent Brown-Forman, its CEO has said.
“Despite the many challenges and ongoing uncertainties created by the pandemic, Brown‑Forman’s business remains incredibly strong,” Lawson Whiting, the drinks company's president and chief executive said, as the company reported a 9% increase in net sales in its first half.
First half sales totalled $1.9 billion (€1.68 billion), which was 12% higher on an underlying basis.
Sales were largely driven by both developed and emerging international markets, while the travel retail channel delivered 'strong double-digit net sales growth'.
Germany, the United Kingdom, Korea, and Spain were the company's best-performing markets. In its home market of the US, sales were flat (+6% underlying).
“We are pleased with the strong first half of the fiscal year and remain confident in our ability to deliver sustainable long-term growth," Whiting added. In the group's first quarter, the company saw sales grow by a fifth.
Jack Daniel's Performance
The Jack Daniel's family of brands grew net sales by 9% (+11% underlying), with the company's flagship Jack Daniel’s Tennessee Whiskey reporting 14% net sales growth.
Its Premium Bourbons portfolio, which includes the likes of Woodford Reserve and Old Forester, reported net sales growth of 11% (+18% underlying), while its Tequila portfolio was up 16% (+16% underlying), boosted by double-digit growth for Herradura and el Jimador.
Operating income was down 15%, with diluted earnings per share decreasing 24%, largely due to the share gains driven by the sale of the Canadian Mist, Early Times, and Collingwood brands in the prior year.
The group said that it is currently 'managing the impact' of global supply chain disruptions, including glass supply, although it believes that the impact of these will lessen as the year progresses.
It has revised its sales and operating income outlook upward, although warned that quarterly performance is likely to remain 'volatile' for the remainder of the financial year, given the lingering COVID situation.
'While volatility and uncertainty persists in the operating environment due to COVID-19 and supply chain disruptions, we remain confident in our growth momentum and have revised our full-year underlying net sales outlook from mid-single digit to high-single digit growth', the company said.
During full-year 2020/21, with lockdowns in effect in many of its key markets, Brown-Forman reported a strong performance from its ready-to-drink range of products, it said during the summer.