FX impact, weak domestic beer demand weigh on Beam Suntory’s 9-months results

Beam Suntory, the spirits arm of Suntory Holdings said that revenue for the first nine months of 2016 declined 3.5% to ¥711bn yen ($6.9bn), down from $7.1bn in 2015. The company blamed the lackluster sales on weak demand for its beer in Japan, which declined 1% year-on-year, despite an aggressive marketing push by the company to increase sales. Foreign exchange impact hurt its wine category, pushing sales down slightly.

However, the company reported mid single-digit growth in its spirits segment, driven by a broad-based growth across global markets and premium spirit categories, the company said.

Premium and Super-premium products delivered the strongest sales growth rates, led by Jim Beam, Maker’s Mark, Basil Hayden’s, Laphroag, Courvoisier, Hornitos and Effen.

Beam Suntory, which has its spirits headquarters in the U.S. city of Chicago, saw strong sales in the America’s region, led by sustained gains in the United States, its largest market. Strong demand for Jim Beam and continued success of Jim Beam Apple lifted sales in the U.S. Other brands such as Maker’s Mark, super-premium bourbons, Scottish malts, Japanese whiskies and brands including Courvoisier, Hornitos and Effen performed equally well.

In other markets, the company reported strong gains in Australia, Spain, Russia and India. Beam Suntory said its spirits grew 3% in its home market of Japan, with year-to-date volumes of Jim Beam rising 44%, driven by successful promotion on-and off-premise of the “Jim Beam Highball.” Ready-to-drink (RTD) products saw volumes rise 13% as Japanese consumers increasingly enjoy them as their beverage of choice with meals.

The company said that segment income for alcoholic beverages rose 26.1% to ¥60.1bn ($571m), up from ¥47.6bn ($452m) in 2015.

Leave a Reply

Your email address will not be published. Required fields are marked *