June 5, 2014 – Brown-Forman CEO Paul Varga is looking to expand his company’s line of flavored whiskies based on the success of recent extensions of the Jack Daniel’s brand. During a conference call with analysts Wednesday following the release of Brown-Forman’s quarterly earnings, Varga cited the success of Jack Daniel’s Tennessee Honey. The whiskey-based liqueur sold more than 1 million cases worldwide during the past year, and Varga said Brown-Forman will use the lessons learned from launching Tennessee Honey in future product development.
“I’m sitting and looking at a category that in the United States alone, if you just — just our rates and estimates of what’s happening in the flavored whiskey as a segment in the United States, the latest numbers have it significantly largely than the — I’ll just cite the Irish whiskey category or the cognac category. And as the more recent three-month trends related to flavored whiskey as a general segment reflects that continued growth. I mean, it will be larger than scotch pretty soon. And so you are sitting in and you are weighing — you don’t want to be too slow or too fast on either one of those.”
Brown-Forman introduced Jack Daniel’s Tennessee Honey four years ago in the US market, and is now testing a cinnamon-flavored “Tennessee Fire” version in three US states. Chief Financial Officer Jane Morreau told analysts flavored whiskey is “driving some of the most explosive growth that we’ve seen in the spirits industry in years.”
Brown-Forman reported a 17% increase in fourth-quarter earnings for the fiscal year ending April 30, with earnings of $0.62 per share – outperforming analyst consensus estimates of $.58. Overall sales for the Jack Daniel’s brand rose 8% worldwide, with international sales growing by 10% and domestic sales by just 6%. Woodford Reserve sales were up by 26%, with a 16% gain for Old Forester. Varga hinted that Brown-Forman will try to expand export sales of both brands and the company’s other whiskey brands to take advantage of what he called “the global whiskey opportunity.”
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