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Investing.com -- A former Marketing Director for Brown-Forman, a major player in the spirits industry, recently shared insights on common misconceptions in the sector during an interview with In Practise.
The former director highlighted that contrary to popular belief, 80% of spirits volume is derived from consumers who purchase one or two bottles annually. This contradicts the myth that a significant number of people consume brands such as Jack Daniel’s daily or weekly.
The discussion also touched on the pricing strategy for Jack Daniel’s, referred to as "Jack Math." This strategy, which has been publicly discussed in shareholder meetings, aims to increase Jack Daniel’s volume by 3% to 4% annually and achieve around two points in pricing. This approach is expected to result in approximately 6% growth.
The former director also commented on the significant consolidation in spirits distribution in the US over the past decade. In the last 10 years, the number of distributors has shrunk from 30 to 50 down to just five or six. These distributors manage hundreds of brands, making it challenging for lesser-known brands to gain attention. Despite the ease of creating a whiskey without a distillery, the barriers to entry are more about consumer awareness and distributor focus.
The director noted that even when smaller brands are launched in the US, distributor representatives may not be aware of these brands due to the extensive brand book they manage, which can include 700 to 800 brands. Therefore, gaining attention in the US market can be particularly difficult unless you’re a large, well-known brand, especially on the distributor side.
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