Jack Daniel’s Whiskey Gross sales Are Dropping
Brown-Forman had the kind of year where it could really use a stiff drink.
The parent company of Jack Daniel‘s reported that Old No. 7’s sales fell 1 percent in the first half of its fiscal year, CNN reported this week, a steep decline when compared with a 9 percent increase during the same time period last year. And overall whiskey sales at Brown-Forman, which makes many different spirits, dropped 2 percent year over year.
Weakened demand “continues to reflect a normalization back to our more historical trends,” Lawson Whiting, the CEO of Brown-Forman, said during an earnings call. He’s seen “slowdown in consumer spending similar to the trends we’re seeing across total distilled spirits and other consumer packaged goods.”
Jack Daniel’s, one of the most well-known American whiskey brands, isn’t the only one faring poorly: Sales of Woodford Reserve dropped 3 percent and Old Forester plummeted 5 percent. In comparison, those premium brands saw a whopping 39 percent bump in last year’s earnings report, CNN noted. If there is any positive news here, it may be that Jack Daniel’s Tennessee Apple saw an eye-popping 50 percent increase in sales, demonstrating Americans’ interest in flavored whiskeys.
The overall downward trend, though, has caused Brown-Forman to lower its net sales forecast for 2024. In an earnings release, the company said that “evolving global macroeconomic conditions continue to create a challenging operating environment tempering our expectations.” That encompasses drinkers’ desire to spend less on spirits, as inflation and the cost of living continue to rise, CNN noted. Brown-Forman has raised prices across its suite of products as the cost of raw materials has jumped, and consumers may no longer be willing to pay.
Additionally, a tariff set to take effect next year would apply a 50 percent tax to American whiskey exported to the European Union. The measure is in retaliation for U.S. tariffs on European steel and aluminum, and many in the industry are worried about the consequences it may have for their business.
Brown-Foreman “continues to work with governments on both sides of the Atlantic, advocating for a solution that brings long-term stability to the U.S. and E.U. trade relationship,” Whiting said on the call.
Even without the added pressure of such a tariff, though, American whiskey isn’t doing so hot this year.
Source: Robb Report