The Brown-Forman Corp. announced third-quarter net sales jumped 9% to $878 million from $808 million the same period one year ago. The Louisville, Kentucky-based wine and spirits producer reported operating income of $304 million, up 11% compared with $273 million in the year-ago period.
Growth in underlying net sales for the first nine months of the company's fiscal year were particularly strong in Woodford Reserve bourbon (22%), Herradura tequila (20%), super- and ultra-premium American whiskey brands (16%) and emerging markets (15%), the company noted.
Brown-Forman continues to enjoy robust sales due to the growing demand for spirits here and abroad. CEO Paul Varga had predicted a strong 2018 fiscal year due to the continuing popularity of its Jack Daniel's products, Slane Irish Whiskey and single malt Scotch whisky, although bourbon and tequila are also driving recent growth.
Sales in markets outside the U.S. remain strong, with only Japan showing a recent drop due to volume declines in Early Times whiskey. In Spain, where Brown-Forman launched its own distribution company last summer, sales are showing double-digit underlying net sales growth, the company said.
For the Jack Daniel's brands, sales of the new Tennessee Fire product blending cinnamon liqueur with whiskey grew 15%, Brown-Forman reported. Other Jack Daniel's innovations include Tennessee Honey, Cider, American Serve, Lynchburg Lemonade and Southern Peach Country Cocktails.
U.S. spirit sales hit a record high last year, according to Reuters, with 4% more being sold in the country, for a total of $26.2 billion. Most of that jump was fueled by high-end blended scotch and whiskey, plus tequila and vodka, the Distilled Spirits Council reported, adding that volumes were up 2.6% to 226 million nine-liter cases.
Continuing interest in the history of whiskey helps to drive sales in that segment, the council said, although vodka still takes the No. 1 spot with one-third of total volume sold in the U.S. However, sales for American whiskey were up 8.1% last year while vodka rose by 3%, the group added.
Spirits have also continued to edge out beer in terms of market share for eight years running — up 0.7% in 2017 to 36.6% of the total U.S. alcohol market. And since the recent tax code changes cut excise taxes on spirits for two years, that benefit will help distillers even more.
These trends are clearly fueling increasing sales for the premium spirits produced by Brown-Forman. With popular brands such as Jack Daniel's, Woodford Reserve and Herradura doing well and innovations taking hold, the American-owned company occupies a lucrative spot in an evolving and competitive market.
That's undoubtedly why Constellation Brands attempted to buy Brown-Forman last year, but the family-controlled company rejected the idea. Expect other suitors to try and acquire the company, though it's unclear if they will receive the same response.