Brown-Forman’s U.S. Sales Dip As Distributors Destock
March 6, 2024Brown-Forman posted flat sales globally for the nine months through January at $3.2 billion, despite an improvement in the U.S. market during the third quarter. Operating income was up 2% on an organic basis to $1 billion, as margins expanded, driven by higher pricing and a more favorable product mix.
U.S. sales were down 2% organically, which the company noted was a sequential improvement from the first half. Brown-Forman saw lower volumes as distributors continue to destock, partially offset by higher pricing across its range, including on Jack Daniel’s and El Jimador Tequila. The company added that it’s seeing growth in super-premium Jack Daniel’s expressions such as Jack Daniel’s Sinatra and Single Barrel Rye Barrel Proof, as well as Diplomático rum.
According to Impact Databank, the core Jack Daniel’s whiskies were down 5.3% to 5.1 million case depletions in the U.S. last year, with flavored offerings Tennessee Honey and Fire also declining. However, Jack Daniel’s RTDs more than doubled in size to above 1 million cases, boosted by the rollout of Jack Daniel’s & Coca-Cola.
Elsewhere in the portfolio, Brown-Forman saw strong growth from Bourbon brands Woodford Reserve and Old Forester, whose U.S. depletions increased 11% and 14% respectively in 2023, according to Impact Databank. El Jimador and Herradura Tequilas both dipped for the year on a volume basis, as did Gentleman Jack.
Globally, Brown-Forman saw sales jump 11% in its emerging markets, led by robust growth for New Mix RTDs in Mexico and Jack Daniel’s Tennessee Apple in Brazil and Chile. The company continues to bring distribution in-house in markets around the world, making the transition in Japan in April and announcing plans to launch its own distributor in Italy next year.
After slower than expected sales over the first nine months of the fiscal year, Brown-Forman is now expecting a flat performance for its full year ending in April, with operating income targeted at 0% to 2%. President and CEO Lawson Whiting cited “a year with significant uncertainty and complexity in the spirits industry,” but added that the company has been resilient against the slower conditions, which are following two years of double-digit growth.—Daniel Marsteller
| Brown-Forman—Top Ten Spirits Brands in the U.S. (thousands of 9-liter case depletions) |
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| Rank | Brand | Origin/Type | 2022 | 2023 | Percent Change1 |
|---|---|---|---|---|---|
| 1 | Jack Daniel’s2 | Tennessee Whiskey | 5,454 | 5,144 | -5.3% |
| 2 | Woodford Reserve3 | Bourbon | 1,278 | 1,420 | 11.1% |
| 3 | Jack Daniel’s RTDs4 | Pre-Mixed Cocktail | 419 | 1,036 | 147.5% |
| 4 | El Jimador | Tequila | 921 | 885 | -3.9% |
| 5 | Jack Daniel’s Tennessee Honey5 |
Flavored Whiskey | 746 | 707 | -5.1% |
| 6 | Old Forester6 | Bourbon | 427 | 485 | 13.5% |
| 7 | Gentleman Jack | Tennessee Whiskey | 419 | 404 | -7.9% |
| 8 | Herradura | Tequila | 384 | 373 | -3.0% |
| 9 | Jack Daniel’s Tennessee Fire5 |
Flavored Whiskey | 370 | 356 | -3.7% |
| 10 | Korbel | Brandy | 259 | 227 | -12.2% |
| Total Top Ten Spirits7 | 10,677 | 11,038 | 3.4% | ||
| 1 Based on unrounded data. 2 Excludes flavors, Winter Jack and RTDs/FMBs; includes Single Barrel, Bonded, Rye, No. 27 Gold and Sinatra. 3 Includes Double Oaked, Reserve Rye, Straight Wheat and Straight Malt. 4 Excludes Country Cocktails (malt-based). 5 Excludes RTDs. 6 Includes 86 proof, 100 proof, single barrel, Mint Julep, and rye. 7 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2024 |
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