Andy Morton

just On Call - Pinnacle set for more growth - Beam Inc CFO

By | 1 February 2013

Beam Inc has high hopes for Pinnacle

Beam Inc has high hopes for Pinnacle

Beam Inc is confident of continuing double-digit sales growth for Pinnacle vodka just seven months after it bought the brand, executives have said.

In a conference call after full-year results today (1 February), Beam CFO Bob Probst told analysts the vodka has posted 19% sales growth under Beam ownership, with similar increases predicted for this year. “We're feeling good and on-track from a top-line perspective,” Probst said.

Beam bought Pinnacle from Maine manufacturer White Rock Distilleries in April in a US$605m deal that also netted the Calico Jack Rum brand. 

Probst said that since the purchase, Beam has restructured Pinnacle's distribution and doubled brand investment, as well as launched a Pumpkin Pie flavour extension.

Probst said Beam's consolidation moves will help push Pinnacle from adding $0.05 per share last year to $0.10 per share this year. 

Earlier this week, Beam announced it is to move the US bottling of Pinnacle Vodka and Calico Jack  to its Kentucky site. About 160 jobs are in doubt at the former White Rock plant in Maine, which Beam acquired along with the brands.

Beam executives, meanwhile, deflected questions over an ongoing misconduct review in India, saying investigations are still ongoing. Probst said the investigation is “making progress” but that it is still too early to speculate on how much it will cost the company.

In October, The Times of India reported allegations of possible violations of the US Foreign Corrupt Practices Act involving the group's operations in the country. 

Beam CEO Matt Shattrock said the company is now “ramping up our repositioning programme to restore our place in the (Indian) market”. He added: “Our long term belief in this market is undiminished.”

Beam posted strong increases in full-year sales and profits as growth in Bourbon beat expectations.

Expert analysis

Beam Inc. (BEAM) - Financial and Strategic SWOT Analysis Review

Beam Inc. (Beam), formerly known as Fortune Brands, Inc, is a premium spirits company. The company offers branded distilled spirits products. The product portfolio of the company consists of bourbon whiskey, Scotch whisky, Canadian whisky, tequila, cognac, rum, cordials, and ready-to-drink pre-mixed cocktails. The renowned brands offered by the company include Jim Beam Bourbon, Canadian Club Whisky, Maker’s Mark Bourbon, Sauza Tequila, Courvoisier Cognac, Teacher’s Scotch, Laphroaig Scotch, Knob Creek Bourbon, Cruzan Rum, Basil Hayden’s Bourbon, Kilbeggan Irish Whiskey, Hornitos Tequila, Skinnygirl Cocktails, EFFEN Vodka, Pucker Vodka and Sourz Liqueurs among others. The company’s major markets includes North America, Australia and Europe, and also maintains presence in the markets of India, Brazil, Russia, Central Europe, Asia, and other geographies. The company is headquartered in Illinois, the US. The company is expanding its operations as evident from its recent acquisition related agreement with White Rock Distilleries to acquire the fast-growing Pinnacle Vodka and Calico Jack rum brands and other related assets for $605m in cash.

Sectors: Company results, Spirits

Companies: Beam Inc

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