Market research
Brown-Forman is to leverage the full weight of its Jack Daniel's brand behind the high-growth rye category next year with the launch of Jack Daniel's Tennessee Rye.
Brown-Forman launched Jack Daniel's Single Barrel Rye earlier this year
The extension will roll out in the US in the Autumn and is likely to hold a similar position in the Jack Daniel's portfolio as the successful Tennessee Honey and Tennessee Fire variants, Brown-Forman revealed at an investor's conference last week. The price of the expression is yet to be decided but should be below the US$55-$65 price of Jack Daniel's Single Barrel Rye.
The move follows other launches from Brown-Forman with younger rye expressions. Jack Daniel's Single Barrel Rye was launched in February while Jack Daniel's Unaged Rye and Jack Daniel's Rested Rye came out five and two years ago, respectively.
According to analysts at Cowen & Co who attended the investor's conference, Tennessee Rye will be a "more meaningful" entry to the category now that Brown-Forman's rye liquid is fully-aged.
The rye category in the US is heating up. According to figures from DISCUS last year, rye whiskey volumes grew more than 500% in the previous five years. Since 2009, volumes have increased 536% from 88,000 nine-litre cases to 561,000 in 2014. In value terms, the category has increased by 609% from 2009 to about US$106m in 2014.
According to Cowen, the launch of Jack Daniel's Tennessee Rye could add 0.4% of growth to Brown-Forman's US sales and 0.2% to overall sales by fiscal-FY2018.
"Under their core trademark," Cowan said, "Jack Daniel's Tennessee Rye should be more scalable and provide an opportunity to gain share within the overall rye category, competing directly with Diageo's market-leading Bulleit Rye. While rye is a small category, the category has grown strong double-digits over the last five years."
Brown-Forman unveiled two other new additions to the Jack Daniel's portfolio at the investor's call. The 10% abv Jack Daniel's American Serve RTD was launched in Australia eight weeks ago, while Jack Daniel's Tennessee Cider is to roll out in the UK in the Spring.
Brown-Forman's executive VP for Jack Daniel's brands, Mark McCallum, said the cider will target the growth in the UK of so-called "spiders" - ciders mixed with spirits - and the company is already talking to retailers.
"We are very excited about the prospect of Jack Daniel's playing in this category," McCallum said. "We have a high level of confidence the Jack Daniel's brand will do well there."
In June, Diageo released two variants of Smirnoff Cider, a blend of carbonated cider, fruit flavours and Smirnoff vodka.
Sectors: Product launches, Spirits
Companies: Brown-Forman
