The Parent Company of Jack Daniel’s Reported Flat Whiskey Sales. Another Part of the Business Grew 20 Percent

While Brown-Forman’s whiskey sales were flat in the first quarter, one aspect of the business surged. Experts attribute it to a change in consumer needs.

The parent company of Jack Daniel’s missed its sales estimates for the first quarter. Now it’s putting a greater emphasis on its burgeoning ready-to-drink portfolio.

On Wednesday, Brown-Forman reported its first-quarter earnings and reiterated its decision to stick to its annual targets. This comes at a time when many companies in the industry are facing a challenging consumer market in both the U.S. and Europe.

The company’s commitment to innovation may just be its saving grace. 

Brown-Forman’s whiskey sales were flat this quarter,

Brown-Forman’s whiskey sales were flat this quarter, but its ready-to-drink (RTD) portfolio posted a 20 percent increase in net sales. Its shares rose roughly 4 percent. 

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“The strength of RTD is part of a broader trend of alcohol consumption at home versus in bars, which is part of a societal trend of spending more on at-home conveniences (Netflix, DoorDash … etc.) versus outside entertainment,” Jeremy Bowman, contributing stock analyst at the Motley Fool, told Inc., adding that the increased value of convenience in society has made RTDs especially attractive.

“For Brown-Forman, it shows that their brands are still resonating with consumers,” Bowman said. “They just need to meet them where they are, which is increasingly in the RTD channel. I think the success of that pivot is reflected in the stock’s gains today.”

Lawson Whiting, the company’s president and CEO, said in a statement that innovation is Brown-Forman’s leading growth driver. Releases like the RTDs, as well as Jack Daniel’s Tennessee Blackberry and New Mix, are offsetting the industry-wide burden of fewer sales.

Source: www.inc.com