Beam planned to decrease Makers Marks alcohol content

Beam planned to decrease Maker's Mark's alcohol content

Beam Inc's much-criticised decision to lower Maker's Mark's abv pushed the brand's sales growth to unsustainable levels, the firm's CEO has said.

Matt Shattock told analysts in a call today (2 May) that consumer stockpiling after the planned drop was announced is behind Maker's Mark's 44% sales jump in first-quarter results. “We did see a bit of a buying forward from customers so that took the growth rate of shipments ahead of the underlying sales growth,” Shattock said.

However, he added: “We won't expect to see those 44% growth rates sustained through the year. In fact, we can't sustain them.”

Shattock said demand is expected to temper through the year, with Beam managing supplies through pricing and market mix. "There is enough liquid to sustain a solid rate of growth," he said.

It was high demand for Maker's Mark that led Beam to announce a planned drop in the Bourbon's abv from 45% to 42% to help conserve supplies. However, the announcement sparked a storm of protest from consumers and the company quickly reversed it decision.

The sales spike for Maker's Mark helped Beam to a 22.6% net profits jump in today's Q1 results despite headwinds in South America and Asia, the company said.