Insight - Fortune Brands to expand non-US sales
- CFO predicts higher proportion of sales from outside US
- Spirits market in US doing "nicely" in 2009
- Sees new "consumer reality"
Fortune Brands, owner of Beam Global Spirits & Wine, expects to increase the proportion of its sales from outside of the US, group chief financial officer Craig Omtvedt has told an investor conference.
Fortune Brands sees "significant international growth opportunities" in spirits, Omtvedt told the Morgan Stanley Global Consumer and Retail Conference in New York yesterday (19 November).
"We get 30% of sales from non-US markets and that's growing," said Omtvedt, commenting on Fortune Brands total business. In spirits, the group already sources 45% of annual sales revenue from outside of its US homeland.
Operating profits from the spirits portfolio, which includes Jim Beam Bourbon, Courvoisier Cognac and Canadian Club whiskey, accounted for three quarters of Fortune's operating profits in the 12 months to September 2009, said Omtvedt.
He reiterated that Beam Global is in a better position after exiting joint venture deals, such as distribution of Absolut vodka in the US and the break-up of the four-party Maxxium Worldwide distribution operation.
"In the joint ventures we had direct control of about 8% of sales globally...We now have direct control of over 76% of sales," he said.
"Once we did the Allied brands acquisition [in 2005] and added additional brands, it added a layer of complexity that made decision making slower and prioritisation more of challenge and, candidly, the joint ventures were becoming a bit of an inhibitor to us.
"With Pernod's acquisition of Absolut in 2008, that gave us the opportunity to get out from under the joint ventures."
In the US, Omtvedt said yesterday that the spirits market "has held up nicely", despite some trading down by consumers and a shift to drinking at home. US spirits market growth in volume sales is likely to be between 1% and 2% for 2009, he said.
Moving into 2010, Omtvedt said he sees a "new reality in terms of the way people are going to shop for the forseeable future.
"We think we're going to see consumers with a much stronger value for money orientation, and that doesn't mean price," he said. "What it means is that people are going to consciously look at products and say 'I'm going to buy what gives me the satisfaction I'm looking for and I will pay whatever it takes to get it, but its going to be a very conscious decision."
Beam Global sales were flat in the third quarter of 2009, to the end of September, giving the unit a 2% fall in sales for the first nine months of the year.
Pernod Ricard's Absolut Berri Acai...
- Five ways small brands can beat big players
- Pernod Ricard Q1 2017 results by region, brand
- Interview, Bulldog Gin CEO Anshuman Vohra, Pt II
- Interview, Bulldog Gin founder Anshuman Vohra
- The end is nigh for Global Travel Retail - Comment
- Stumbling UK Pound prompts Conviviality price hike
- Edrington’s The Macallan 40 Year Old - NPD
- Bacardi rolls out new Oakheart rum packs to US
- AB InBev fund ZX Ventures buys homebrew co
- Diageo most at risk to Thai alcohol ban - analyst
- Global gin insights - market forecasts, product innovation and consumer trends
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global rum insights - market forecasts, product innovation and consumer trends
- Global Wine Market 2016-2020
- Global RTD insights - market forecasts, product innovation and consumer trends