CEO Paul Varga was speaking as Brown-Forman reported its Q1 2015 results last Wednesday; net sales grew 3% to $921m while reported operating income was up 1% to $221m.
Brown-Forman is keen to gatecrash the cinnamon success of Sazerac’s Fireball Whisky (see photo below) although it might which sold 1.9m cases in 2013; the New Orleans-based brand is well entrenched in bars among younger drinkers nationwide.
Chatting with analysts about trials for Tennessee Fire (cinnamon liqueur blended with Jack Daniel's whiskey), CFO Jane Morreau said flavored whiskeys accounted for around 45% of US whiskey volume growth sales in 2013.
Demographic factors played a key role in their success, she added, noting increased interest from women and minorities with changing taste profiles – which millennials also bring to the market.
'Just a case of getting our ducks in a row'
33% ABV spirit Jack Daniel’s Tennessee Fire had seen success Oregon, Pennsylvania and Tennessee since its April launch, Morreau said, with “minimal cannibalization” of either the core Jack Daniel’s brand or Tennessee Honey, and Brown-Forman plans to launch it in a further five states this October.
“We’ve got some work still to do in observing a little bit of the performance in those original three states and we want to keep looking at how best to sell and market the brand when we go to a broader geographic platform,” Varga said.
“But all the signs are really encouraging that we’re going to be well accepted with it. It’s just getting our ducks in the row.”
Varga said it was hard to predict how many flavored varieties the Jack Daniel’s brand could carry long term, although Brown-Forman wants to build Fire along similar lines to Tennessee Honey (albeit apparently with a more rugged, masculine edge) i.e. develop it as a proper brand extension rather than (in Morreau’s words) take a “flavor of the week” approach.
The latter is a wildly popular line extension that continues to grow three years after its launch – the global roll-out continues in markets including France – and became a 1m case/year brand in January.