Beam Suntory Q2 growth fueled by whiskey and bourbon sales

By Mary Ellen Shoup

- Last updated on GMT

Beam Suntory has increased its overall net sales 1.5% with strongest growth coming from its whiskey and bourbon brands. Pic: Suntory
Beam Suntory has increased its overall net sales 1.5% with strongest growth coming from its whiskey and bourbon brands. Pic: Suntory

Related tags Jim beam Alcoholic beverage

Suntory's net sales in its alcoholic beverages segment rose 3.1% year-over-year for H1 2017 driven by global demand for Beam Suntory's whiskey and bourbon brands particularly Jim Beam, Maker’s Mark, and Knob Creek with performance tempered by declining beer sales. 

In Q2, Jim Beam and Maker’s Mark products achieved double-digit growth globally and mid-single digit growth in the US with the spirits maker growing brand recognition for Jim Beam in Asian markets.

“In terms of sales, we are actively expanding overseas with the ‘highball’ style of drinking that originated in Japan, through the promotion of Jim Beam Highball,”​ Suntory Holdings senior managing director, Shinichiro Hizuka said. 

The ‘highball’ style of drinking refers to cocktails with a base spirit and a larger portion of a non-alcoholic mixer.

“Currently, we are strengthening activities in various Asian countries, and a number of restaurants and bars handling this product is increasing.”

Whiskey brands Chita and Torys in Japan also accelerated growth of the company’s alcoholic beverage portfolio with 5% year-over-year sales growth in Q2.

Suntory Holdings performance

Parent company, Suntory Holdings, reported overall net sales increased by 1.6% to $11.69bn (1.29 trillion yen) for the first six months of 2017 compared to the same period last year for its combined beer, wine, no-alcoholic beverages, and food businesses.

Suntory Beer Limited posted a 2.7% decline in number of cases sold falling to 33.05 million cases during the quarter, while the overall beer market is estimated to be down about 1% over the same period.

Suntory Wine International Limited sales increased year over year in Q2 led by a 14% increase of the Sankaboshizai Mutenka brand and strong performance of new imported wine products Dark Horse and Santa Premium.

Non-alcoholic drinks and food segment

Suntory Holdings has been focusing on creating new demand for its non-alcoholic beverages and food and increased Q2 net sales by 1.7% to $6.19bn (685.7bn yen) with operating income rising 7.1% year-over-year to $477.4m (52.7bn yen).

In Japan, the company created new demand by concentrating on value-added products in addition to strengthening its core brands with strong sales performance from the Suntory Tennensui and Craft BOSS Black in plastic bottles launched in April 2017.

In Europe, the company conducted proactive marketing, primarily for key brands focusing on small format products such as Orangina and Oasis brands. In Spain, the focus on the on-premise channel continued, and sales grew for Schweppes.

In the UK, Q2 sales were mostly flat for the Lucozade brand, while quarterly sales decreased year on year for Ribena. In Africa, the group worked to develop a business base with a focus on Nigeria.

Suntory Holding has left its full-year forecast unchanged with net sales and operating income projected to both increase 1.5% reaching $24.36bn (2.69 trillion yen) and $642.98bn (71bn yen) respectively.

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