Jack Daniels whiskey’s sales to emerging markets have soared as combined net sales to Turkey and Russia increased by more than 35 percent in the nine months, the company said on March 6.
While worldwide demand for its Jack Daniels whiskey helped U.S. distiller Brown-Forman Corp to beat Wall Street profit estimates for a third consecutive quarter, and the company said full-year sales would rise, particularly thanks to recorded double-digit percentage growth in sales to emerging markets.
However, fourth-quarter gross margins were likely to be affected by investments in marketing and selling, general and administrative expenses in Europe and Asia, Chief Financial Officer Donald Berg said on a post-earnings conference call.
To expand geographically, the company last year struck a deal with Japanese brewer Asahi Group Holdings Ltd to distribute its brands in Japan.
Cash-strapped Americans are also less likely to cut spending on liquor than on groceries, an Ipsos poll for Reuters this month showed.
Sales in Brazil and Mexico also grew at double-digit rates, up 14% and 11%, respectively. Berg said the company’s whiskey business, which includes the Gentleman Jack and Old Forester brands, accounts for almost 60 percent of the cases sold by Brown-Forman around the world.
Brown-Forman said it gained share in its home market, the United States, due to higher prices and strong demand for its whiskeys and its Jack Daniel’s Tennessee Honey Liqueur.
Two-thirds of Americans are spending less as they cope with higher taxes and gasoline prices, the Ipsos poll found. But while 62 percent of respondents said they would cut back on clothing and shoes, and 46 percent would buy fewer groceries, only 39 percent said they would seek to cut their liquor budget.
The Louisville, Kentucky-based company said sales of its flagship Jack Daniel’s whiskeys and liqueurs rose 10 percent in the nine months to Jan. 31. Sales of the Jack Daniel’s Tennessee Honey Liqueur brand alone nearly doubled.
“These rates of growth will continue into the fourth quarter, keeping us on track to deliver high single-digit underlying net sales growth,” Chief Financial Officer Donald Berg said on a post-earnings conference call.In the first nine months of the company’s fiscal year, underlying net sales rose 8 percent, driven by premium brands and strong global demand for its North American whiskeys.