Analysis - China in Brown-Forman's sights with "ultra-premium" play
Brown-Forman released its H1 results yesterday
In a note today (5 December), Stifel's Mark Swartzberg said the new plus-US$100 Jack Daniel's No. 27 Gold, available in Singapore and with plans to roll out further, is an attempt to spark sales in countries such as China. The analyst also highlighted the $150 Jack Daniel’s Sinatra Select, launched in Travel Retail in October, as a play towards China, as well as similar markets, “where bottle price drives purchases over taste”.
“We take this innovation as a sign that the company is putting increased emphasis on the ultra-premium segment, and in doing so is improving its position in markets such as China,” Swartzberg said.
China currently makes up less that 1% of Brown-Forman sales, Swartzberg said, lagging well behind core markets such as the US, which is experiencing a surge in North American whiskey sales. In first-half results, released yesterday, underlying net sales in the US grew by 5%, driven by Jack Daniel's. Globally, Jack Daniel's increased underlying net sales by 10%.
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