just On Call - Brown-Forman to go slow on Jack Daniel's extensions
Brown-Forman launched Jack Daniel's Tennessee Honey in the US last year
Tennessee Honey saw net sales increase by 50% in the company's first-half results and continues to bring new consumers to the category, CFO Don Berg said in a conference call with investors. However, Berg said that the product still needs time to grow.
“Because it's Jack Daniel's, and in a new territory - flavoured full-strength - we've been cautious and not tried to launch a new flavour every quarter,” Berg said. “We knew we could sell it (globally) pre-packaged in mixable format, but we wanted to take our time with that and know that, when we do introduce it around the world, it can be as successful as possible.”
Berg said the extension differs from flavoured vodka variants that have seen a wide range of flavours, such as whipped cream and peanut butter, marketed in the past few years. “We're not at that level of aggressiveness with the flavour expansion,” he said. “You can buy whipped cream from the store and put it in Jack Daniel's if you want but you're probably not going to see it from us.”
Tennessee Honey, which was released in the US last year, was launched in the UK in May and Australia the following month. Berg said it was growing in line with expectations in foreign markets, while he was “really encouraged” by its reception in the UK, where it has launched mainly in the on-trade.
Meanwhile, Brown-Forman CEO Paul Varga told investors that the firm has yet to make a decision on the future of its France distribution deal with Bacardi, which expires next September. “We've still got some time,” Varga said. “We are having conversations on the matter.”
In first-half results released today, Brown-Forman posted a 16% jump in net profits and a 2% rise in net sales.
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