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Brown-Forman Posts 5% Growth In U.S. In Fiscal First Half

December 7, 2016

Brown-Forman has revealed solid underlying growth numbers in the core U.S. market for the six months through October, marking its fiscal first half, with organic net sales up 5%. The company continues to benefit from the U.S. market’s brown spirits renaissance, as ongoing growth for the Jack Daniel’s brand family was augmented by double-digit gains for Woodford Reserve. Brown-Forman’s Tequila and wine businesses have also been on the rise in the U.S., with its Herradura and El Jimador brands up double-digits and Sonoma-Cutrer posting a high single-digit advance.

Brown-Forman noted that it has increased prices on much of its super- and ultra-premium whiskies—such as Woodford Reserve, Woodford Reserve Double Oaked, Jack Daniel’s Single Barrel and Gentleman Jack—“to reinforce their super-premium positioning.” Woodford Reserve, an Impact “Hot Brand,” is on pace to cross 400,000 cases in the U.S. this year on continuing double-digit growth.

Another Hot Brand, Jack Daniel’s Tennessee Fire, is seeing solid on-premise growth so far this fiscal, the company reported, offsetting a dropoff in off-premise business compared with the same period last year, in which Tennessee Fire launched into national distribution. Sister brand Tennessee Honey has also eked out growth in the highly competitive on-premise shot segment in the U.S. over the last six months.

Globally, the Jack Daniel’s family was up 2% for the half-year, with Tennessee whiskey up 2%, Fire up 12%, Honey increasing 2% and Gentleman Jack rising by mid-single digits. Woodford Reserve continued to set the pace with 19% progress, while Finlandia vodka, down 4%, faces ongoing challenges. Overall, Brown-Forman’s net sales grew 2% on an underlying basis to $1.5 billion in the first half, but foreign exchange woes and the divestiture of Southern Comfort and Tuaca led to a decline of 4% on a reported basis. Operating income also suffered from those factors, falling 5% to $500 million. —Daniel Marsteller

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