just On Call - US vodka hit by "flavour fatigue" - Brown Forman CEO
Brown-Forman released its first-half results yesterday
Paul Varga told analysts in a conference call yesterday (4 December) that though he has no hard data on a shift in consumption to flavoured whiskies, “we certainly have been hearing some of that more anecdotally”. Varga was speaking after first-half results that saw Tennessee Honey post double-digit growth in the US two-and-a-half years on from its launch.
“We have seen a little bit of softening (in vodka),” the CEO said, whose group owns the Finlandia brand. “And we've been hearing anecdotally in the flavoured vodka arena that maybe there is some oversaturation with flavour or a little flavour fatigue.”
In October, Brown-Forman moved further into the flavoured brown-spirits category with the release of Winter Jack, which Varga yesterday described as “an additional flavour from Jack Daniel's”.
He said the success of Tennessee Honey, and early feedback on Winter Jack has encouraged the company to plan more flavours.
Meanwhile, Brown-Forman CFO, Don Berg, who was hosting his last conference call before his retirement, said the US on-trade market is “slightly declining”, though he is unsure why.
Berg said: “Sometimes it's high gasoline prices. Sometimes it can be little shocks in the market of one nature or another. But this has been trending down for a little while now and it's hard to really say exactly why.”
Berg will hand over his duties on 31 January to Jane Morreau. Berg officially leaves on 30 April, the end of the company's financial year.
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