Please ensure Javascript is enabled for purposes of website accessibility

Brown-Forman Focuses on Premium Brands With Canadian Mist Sale

By Rich Duprey – Jun 15, 2020 at 10:58AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The premiumization trend was one all distillers and brewers could count on before the pandemic.

Brown-Forman (BF.A -1.22%) (BF.B -1.03%) continues to whittle down its spirits portfolio to concentrate on just the top brands. Today, it announced it is selling its Canadian Mist, Collingwood, and Early Times whiskeys.

Privately held Sazerac will acquire the brands for an undisclosed sum. The distiller is slowly amassing a broad portfolio of spirits through acquisitions, making it a formidable competitor to larger, more established rivals.

Bottles of Canadian Mist whisky

Image source: Brown-Forman.

Placing a premium on growth

Brown-Forman generates most of its revenue from the sale of Jack Daniel's whiskey, the largest U.S. whiskey brand and the fourth biggest spirit, but it has been benefiting from the trend toward premiumization that's occurred across the alcohol sector. The distiller's high-end whiskey and tequila enjoyed double-digit growth in underlying net sales prior to the coronavirus pandemic.

Analysts, however, have downgraded the prospects of distillers due to COVID-19's impact on the on-premise channel, or venues such as restaurants, bars, nightclubs, and hotels. With the travel and tourism industry not likely to bounce back quickly, the outlook for growth is muted.

But Brown-Forman sees premium spirits as the long-term sweet spot with consumer preferences, so it has agreed to sell off brands not in line with that strategy. 

Brown-Forman acquired the Canadian Mist brand in 1971, marking the first time the distiller produced a spirit outside of the U.S. The 160-year old Early Times Kentucky whiskey was its first acquisition in 1923.

Sazerac may be best known for kicking off the cinnamon-flavored whiskey trend with its Fireball brand, which led to Brown-Forman creating its own version, Jack Daniel's Tennessee Fire, and then branching off with other derivatives, including its top-selling honey-flavored version, Tennessee Honey.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Brown-Forman Corporation Stock Quote
Brown-Forman Corporation
$67.40 (-1.03%) $0.70
Brown-Forman Corporation Stock Quote
Brown-Forman Corporation
$68.27 (-1.22%) $0.84

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.