Posted on | April 17, 2012
Written by | BevNetwork
BFB’s Outperformance Continues, Led by Bourbon – In the four-week period ending Mar. 31, 2012, bourbon continued to post robust trends, with volume sales up 12.1% YoY and dollar sales up an even stronger 14.1% YoY as flavored bourbons spark new interest in the category. Category leader BFB continues to realize an outsized benefit from this bourbon revival, helped by the launch of Jack Daniel’s Tennessee Honey (as the brand contributed 79% of the company’s YoY dollar sales growth in the period). And as a result, BFB’s 9.4% YoY dollar sales growth and its 8.1% YoY volume sales growth were the best among the major manufacturers. We reiterate our Buy rating and $93 target price on BFB.
BEAM Sales and Volumes Impacted by Price Increases – BEAM’s dollar sales growth decelerated notably, up just 2.0% during the month (vs. +3.2% over the last 12 weeks and +8.5% over the last 52 weeks). Volumes were also disappointing in the period, down 5.2% YoY. We attribute this softening primarily to higher prices across BEAM’s key brands, as pricing was up 7.6% across the company, representing the strongest price/mix among the major manufacturers.
Spirits Growth Accelerated – In the period, category dollar sales grew 5.5% YoY, representing an acceleration relative to the 4.9% growth seen in the previous period. Encouragingly, price/mix continues to be a benefit to dollar sales growth, adding 1.7 pts in the period, up from the 1.5 pt benefit seen last month. Importantly this marks the 16th consecutive month of positive price/mix, after a challenging 2008-2010. And with volume sales having steadily improved over the last four months (+ 3.7% over the last four weeks, and +3.1% over the last 12 weeks), we are further encouraged, as volumes were a key driver of category sales growth in 2011.