JAPAN – Brown‑Forman Corporation, a leading American-owned spirits company, has announced the launch of its own distribution business in Japan, marking a significant shift in its market strategy.
The move signifies a departure from relying on external distributors, a practice upheld since the company’s entry into the Japanese market in the 1970s.
The newly established Brown‑Forman Japan office, situated in the heart of Tokyo, has been operational since the end of 2023.
Aaron Martin, VP and General Manager of Brown‑Forman Japan, expressed confidence in the venture, stating, “With our dedicated team in place and our new and inspiring headquarters in the heart of Tokyo, we are ideally set up to further the growth of our brands in Japan across all channels.”
Japan stands as one of the world’s largest markets for premium and super premium whiskey, with Jack Daniel’s leading the premium whiskey category, according to IWSR 2022 data.
Ricardo Cupido, VP and Managing Director of Brown‑Forman Asia, emphasized the importance of Japan in the company’s growth strategy, stating, “Japan is an important market as we drive the growth of our Jack Daniel’s family of brands, Woodford Reserve, and our broader super premium portfolio.”
The decision to establish its own distribution business in Japan reflects Brown‑Forman’s commitment to prioritizing the Japanese market.
Thomas Hinrichs, EVP and President of Brown‑Forman Emerging International, highlighted the strategic significance of the move, stating, “This strategic move allows us to introduce our brands to consumers with an even greater focus and prioritization.”
Brown‑Forman boasts a diverse portfolio of brands, including The GlenDronach, Benriach, and Glenglassaugh, alongside its American whiskey brands such as Old Forester, Woodford Reserve, and Jack Daniel’s.
The company’s expansion into Japan follows its successful direct sales operations in key global markets like Taiwan, Thailand, and South Korea within the Asian region.
Year-to-date financial results
The announcement comes after the Jack Daniels maker reported financial results for its third quarter and nine months ended January 31, 2024. During the quarter, company net sales decreased 1 percent to US$1.1 billion (-2% on an organic basis2) compared to the same prior-year period.
In the quarter, reported operating income increased 116% to US$373 million (+5% on an organic basis) and diluted earnings per share increased 189 percent to US$0.60.
For the first nine months of the fiscal year, the company’s reported net sales increased 1 percent to US$3.2 billion (flat on an organic basis) compared to the same prior-year period.
Lawson Whiting, Brown‑Forman’s President and Chief Executive Officer said, “As industry trends have normalized, we have expanded our gross margin, executed our strategic priorities, and invested behind the business. As we look to the end of the fiscal year, we remain confident in the strength of our portfolio and our ability to deliver long-term growth.”
In its 2024 outlook, the company expects stagnant organic net sales reflecting the slower than anticipated growth for the nine months ended January 31, 2024.
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