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Analysis - No end to Bourbon growth yet despite Beam Inc blip

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The global Bourbon boom remains on course despite a slowdown in Beam Inc's flagship brand, analysts have said.

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Beam posted a 3% sales increase for its Jim Beam portfolio in year-to-date results, released yesterday, down from a 10% jump in full-year 2012. Beam has previously lauded a surge in global demand for Bourbon, promising new infrastructure to cope with extra capacity.

However, in a note today (1 Nov), CLSA's Caroline Levy said Beam's “core Bourbon franchise remains strong” and that the Jim Beam slowdown was down to distributor inventory reductions in the US and Australia.

She also said Beam's premium Bourbon brands, such as Maker's Mark, which posted a 17% YTD sales increase, continue to outperform.

Stifel analyst Mark Swartzberg also praised Beam's Bourbon portfolio, saying that management's announcement yesterday of Q4 price increases on Jim Beam is “a sign of confidence in the momentum for Beam’s most valuable asset”.

Beam is not the only company to invest behind Bourbon. This year Brown-Forman said it will spend US$35m to build new capacity at its Woodford Reserve distillery in the US.


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