Brown-Forman CEO defends Tennessee Fire slide, blames price concerns
Brown-Forman's Tennessee Fire was launched nation-wide in the US last year
Brown-Forman's CEO has blamed consumer price fears for a Q1 double-digits US sales slide on Jack Daniel's Tennessee Fire.
Paul Varga said off-premise sales had been hit by a reluctance among US consumers to trade up to a bottle of the Jack Daniel's flavour extension. He said the price differential was greater than for a single serve in the on-premise, which is why on-premise sales were doing "much, much better".
"We think that might be one of the contributing factors," Varga said. "That the hurdle for an individual drink price in the on-premise isn't as great as the shelf price difference in the off-premise."
In Brown-Forman's Q1 results released yesterday, Tennessee Fire's declines partially offset strong sales growth for the overall Jack Daniel's portfolio. The cinnamon-flavoured extension's problems were also blamed on its roll-out in the US off-trade last year, which has left tough comparables in the wake of a big launch campaign.
However, Brown-Forman management will be concerned over the Q1 decline of Fire, which at one stage was enjoying a more successful launch than fellow Jack Daniel's flavour extension Tennessee Honey. Nielsen figures for the 12 weeks to 18 June showed a 16% decline for Fire, accelerating to 17% for the four weeks to 18 June.
Despite the sales drops, Varga said he was happy with the price position of the overall Jack Daniel's price portfolio "for the very long-term".
Meanwhile, there was good news for Tennessee Honey. Varga said the extension was back in growth in the US, up mid single-digits as it entered its sixth year in the marketplace.
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