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After Record Second Quarter, Beam Says It Will Step Up Brand Investment

August 4, 2011

Beam Global Spirits & Wine enjoyed record sales of $703 million, up 11%, in the three months through June, and says it intends to continue aggressively upping its spend behind key brands in the second half of 2011. For the first half of the year, Beam’s net sales increased by 14% to $1.38 billion, while operating income before charges rose 12% to $299 million.

“Our investments in innovation and brand building are paying off, and we’re further stepping up our brand investment as a result,” said Bruce Carbonari, chairman and CEO of Beam parent Fortune Brands. “Jim Beam accelerated its momentum in the quarter, Maker’s Mark continued its double-digit growth, and Skinnygirl (acquired in March) has become the fastest-growing spirits brand in America.” Carbonari said profits are expected to lag behind sales growth in the third quarter as Beam’s promotional spend continues to rise by double-digits, before “normalizing to a relatively constant run rate as a percentage of sales” in the fourth quarter.

Beam’s increased spend this year has included TV ads for Jim Beam, Maker’s Mark and Sauza Hornitos. Its innovation agenda has spawned a new Skinnygirl Sangria extension, a line of Pucker flavored vodkas and a new Jim Beam variant, Devil’s Cut, which is higher-proof (at 45%-abv) and higher-priced (at $24 a bottle) than the core brand.

Fortune Brands closed the $1.225 billion sale of its Acushnet golf business to a group led by Fila Korea and Mirae Asset Private Equity in recent days, and is preparing for a spinoff to shareholders of its Home & Security division, following which it will become a pure-play spirits company under the name Beam Inc. by early in the fourth quarter.

Beam Global Spirits & Wine
Top 10 Brands in the USA

(thousands of nine-liter cases)
Depletions Percent Change3
Rank Brand Type 2008 2009 2010 2008-2009 2009-2010
1 Jim Beam1 Bourbon 3,078 3,059 3,188 -0.6% 4.2%
2 Dekuyper Cordials/Liqueurs 2,700 2,529 2,447 -6.3% -3.3%
3 Sauza1 Tequila 1,441 1,401 1,597 -2.8% 14.0%
4 Canadian Club Canadian Whisky 1,228 1,187 1,169 -3.4% -1.5%
5 Kamchatka Vodka 954 995 1,031 4.4% 3.6%
6 Windsor Supreme Canadian Whisky 955 978 965 2.4% -1.4%
7 Makers Mark Bourbon 770 805 915 4.5% 13.7%
8 Kessler Blended Whiskey 731 740 739 1.3% -0.1%
9 Cruzan Rum 584 538 642 -7.9% 19.4%
10 Wolfschmidt Vodka 479 485 568 1.2% 17.1%
Total Top 102 12,919 12,717 13,261 -1.6% 4.3%
1excludes RTDs
2addition of columns may not agree due to rounding
3based on unrounded data

Source: IMPACT DATABANK

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