Dive Brief:
- Brown-Forman reported a 1% dip in net sales to $1.08 billion for the third quarter but a 4% uptick in underlying quarterly sales. Currency headwinds accounted for much of the difference.
- Quarterly earnings were up 2% to $190 million but flat for the first nine months of the year at $545 million.
- Whiskey sales remained strong: a 7% increase on an underlying basis for the Jack Daniel's brand, 11% for Jack Daniel’s Tennessee Honey, 29% for the premium bourbon Woodford Reserve, and double-digit growth for Old Forester bourbon.
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Dive Insight:
A strong whiskey portfolio has given Brown-Forman an edge over competitor Diageo, which has faltered in the U.S., its largest market, by not adapting as quickly to U.S. consumers' growing preference for whiskey and premium spirits.
With a 7.8% sales increase in 2015, American whiskeys outpaced growth for the spirits industry as a whole at 4.1%, according to the Distilled Spirits Council. High-end whiskey and bourbon brands are especially popular, with 6.8% volume growth as compared to 4.8% growth for value products.
Flavored whiskey is a growing opportunity for producers to reach untapped markets. In addition to double-digit quarterly sales growth for Tennessee Honey, Brown-Forman's Jack Daniel's Tennessee Fire brand had a strong first year driven by interest from millennials, particularly women and Latinos.
Women are a key, fast-growing market for whiskey producers, as this demographic is leaving behind their once-preferred vodka drinks in favor of whiskey. As of early last year, 37% of U.S. whiskey drinkers were women as compared to 15% of whiskey drinkers in the 1990s.