World: Beam Suntory sees mid-single-digit revenue increase in 2019
Makers Mark owner Beam Suntory reported a mid-single-digit revenue increase for 2019, but was impacted by EU-US tariffs on American whiskey, The Spirits Business reported on February 14.
Albert Baladi, CEO of Beam Suntory, said the group delivered very strong results in 2019, but were hurt by the impact of tariffs on Bourbon exports to the European Union, and the boycott of Japanese products in South Korea.
The EUs 25% retaliatory tariff on US products was imposed in July 2018, and caused American whiskey exports to the EU to fall 27% to US$514 million last year.
Total sales grew 6.5%, benefiting from our premiumisation actions across brands and markets, said Baladi. Sales grew at a mid-single-digit rate in the United States, at a high-single-digit rate in Japan, Australia, New Zealand and South Africa, and at double-digit rates in China, India, Southeast Asia, Russia and Mexico.
The group said sustained consumer demand for Bourbon and premium spirits helped drive strong growth for Jim Beam, which grew 9%, and Makers Mark, which was up 11%. Super-premium small-batch Bourbons increased sales by 21%.
Courvoisier Cognac continued to build momentum with 7% sales growth.
The super-premium House of Suntory brands rose sales by more than 75%, driven by strong performance from Toki whisky, Japanese gin Roku and Japanese vodka Haku.
The company said its east-meets-west competitive advantage was signalled by the successful launch of Legent Bourbon in key markets and Oaksmith whisky in India.
Beams Japan business, Suntory Spirits, grew sales by 7% with strong growth from its whiskies, led by strategic brands Jim Beam, Kakubin, Torys and Makers Mark.
Ready-to-drink (RTD) products increased by 17% as a result of very strong consumer demand for the recently launched Kodawari Sakaba no Lemon Sour. The categorys growth was also boosted by the expansion of 196℃ Strong Zero and other canned Highball products, which Beam Suntory said consumers increasingly enjoy with meals.
Beam Suntory said it will renew the flavour and design of all canned Highball products and propose an even better tasting highball to consumers.
In 2019, Japan became the largest export market in the world for Jim Beam, driven by popularity of the Highball serve, added Baladi.
Beam Suntory sought to inspire consumer interest with innovative new products such as Suntory World Whisky Ao, Japanese vodka Haku and Japanese liqueur Kanade.
Looking ahead, the company said it aims to outperform its global market by leveraging its strong routes to market and building its premium brands.
In the Japan market, Beam Suntory will focus on expanding its business by further developing and strengthening brands such as Jim Beam, Torys, Makers Mark, Teachers, -196°C Strong Zero and Kodawari Sakaba no Lemon Sour.
The group will also engage in activities focused on quality from product development to the consumption, and conduct active marketing activities such as selling new products providing new value.
Total revenue for the alcoholic beverage segment within Beam Suntorys parent company, Suntory Holdings, including beer and wine, was up by 3.1% to 1.04 trillion yen (US$9.5 bln) excluding excise taxes. Operating income was up by 8.5% to 144.3 bln yen (US$1 bln).
Baladi added: As we look ahead to 2020, well continue to navigate geopolitical uncertainty. Its vitally important to return to the zero-for-zero tariff environment that benefited trading partners on both sides of the Atlantic for more than two decades.
And the coronavirus situation is creating challenges in key Asia markets. Even so, with our passionate worldwide team, we feel very good about the strategic actions were taking to meet consumers desire for premium products, refreshment, and brands with authentic heritage and legacies.
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