RTD alcohol outpaces overall market
Brown-Forman's ready-to-drink (RTD) alcohol sales grew 11% in FY2026, providing one of the few bright spots in a difficult year for the spirits industry. Overall net sales declined 1% for the year, while fourth-quarter sales rose 2%, according to the company's latest earnings.
The growth in RTD products contrasts sharply with weakness elsewhere in Brown-Forman's portfolio. Whiskey products grew 3%, but tequila sales fell 4%, and US net sales declined 7%, driven partly by the end of the company's sales, marketing and distribution partnership with Champagne producer Korbel.
Jack Daniel's and innovation drive category
CEO Lawson Whiting credited the company's success in RTD alcohol to two factors: ensuring products deliver the light, refreshing profile consumers seek in the category, and leveraging existing brand power. The strategy proved effective with Jack Daniel's RTD products and with Jack Daniel's and Coke, a collaboration that pairs two recognised brands.
Brown-Forman launched New Mix, Mexico's leading RTD cocktail with 5% alcohol by volume, in the US market in November. The brand carries particular appeal among Mexican-American consumers who already know it from Mexico. Whiting noted that within nine US markets, New Mix became the eighth-largest contributor to RTD category growth in a matter of months.
Jack Daniel's Blackberry, another innovation, continues to exceed expectations, analysts from TD Cowen noted.
Geography provides some support
Brown-Forman saw mixed regional results. Net sales in developed international markets were flat, while emerging markets rose 14%. Travel retail net sales increased 6%. These gains helped offset the 7% drop in US sales.
M&A talks concluded without deals
The company ended merger discussions with France's Pernod Ricard at the end of April after talks began in March. CEO Whiting said Brown-Forman "was unable to reach mutually agreeable terms." The company also explored a potential deal with Kentucky's Sazerac but has made no further comment on that process.
Whiting said the company's focus is on expanding its geographical footprint, building brands, and enhancing operational efficiency.