Jack Daniel's whiskey drives growth in sales and income for Brown-Forman
Brown-Forman reported that for the fiscal year end on April 30, 2014, net sales increased by 4% and operating income increased by 8%, largely driven by organic growth with the Jack Daniel’s brand.
“We are pleased to report another fiscal year of excellent organic growth, particularly in light of the moderating growth rates of our global competitors. I believe that our leadership position in premium American whiskey, led by the one and only Jack Daniel’s trademark, and a very balanced geographic contribution, underpin the company’s differentiated performance,” said Paul Varga, Brown-Forman’s chief executive.
Brown-Forman’s super and ultra-premium whiskey brands grew underlying sales by 19%. The Jack Daniel’s family of brands grew underlying sales by 8% and was helped by the honey flavoured Jack Daniel’s Tennessee Honey, which has sold over one million cases.
Jack Daniel’s honey flavoured whiskey has helped drive growth, with global underlying net sales growing by 36%.
Net sales for the year totalled US$3.95 billion and fourth quarter sales were up 3% totalling US$893 million.
Underlying net sales grew by 4% in the US and 9% in emerging markets.The 9% growth in emerging markets is impressive for Brown-Forman compared to the hit that competitors have taken particularly in light of the slowdown in Asia.
The UK market, which is 10% of reported net sales, showed 9% growth in reported net sales for the year.
Overall growth was driven both by volume increases as well as price increases.
To keep up with growing demand Jack Daniel’s invested over US$130 million back into the business. Some big investments costs included a new cooperage which opened in April 2014 and investment in a new distillery which is set to open in April of 2015.
The company is expecting another strong year ahead. Varga said: “We remain optimistic about the organic growth prospects for Brown-Forman, and our investment posture and fiscal 2015 earnings outlook reflect that optimism.”