Tuaca and Southern Comfort, two brands previously owned by the Brown-Forman Corporation, will be acquired by Sazerac for $543.4 million. The decision was revealed on Thursday, January 14, and it is expected that the buyout will be finalized by March.
The recipe for Southern Comfort, one of the world’s most celebrated liqueurs, was initially developed by New Orleans-based bartender Martin Wilkes Heron, back in 1874.
The whiskey-flavored drink, enhanced with hints of fruit and spices, is frequently employed when creating cocktails such as the Scarlett O’Hara or the Alabama Slammer.
Purchased by Brown-Forman back in 1979, the alcoholic beverage has been having trouble in recent years, as rival companies have developed an increasingly wide variety of flavored ryes and bourbons.
Some of those whiskeys include interesting ingredients, such as pecan nuts, vanilla, jalapeño peppers, ginger, mint, maple, honey, orange peel, peach, saffron or caramel.
Another problem has been the rise of Fireball Cinnamon Whiskey, produced by Sazerac: this drink has dethroned it as the flavored spirit that most consumers and bartenders swear by, sales reaching 4.6 million cases in 2015, after starting at just 100,000 six years ago.
Last year, Brown-Forman has sought to revamp Southern Comfort’s image, accelerating marketing efforts and investing heavily in promoting the alcoholic drink.
For instance, the “ShottaSoCo” campaign, featuring Eastbound & Down actor Danny McBride included a video clip which attracted more than 4 million views on YouTube.
However, all this renewed attention from the public still didn’t allow Southern Comfort to compete more effectively with Crown Royal’s Regal Apple Flavored Whiskey or with Jack Daniel’s Tennessee Honey.
Sales tumbled by around 4% in the first 4 months of 2015, and continued to drop by another 7% by October 31, but at least other brands owned by Brown-Forman, such as Jack Daniel’s continued to fare well, revenues increasing by around 7% throughout the year.
Therefore, it comes as no surprise that the company headquartered in Louisville, Kentucky has decided to dispose itself of Southern Comfort, in order to focus on more profitable ventures instead.
Just like it renounced its Fontana Candida and Bolla Italian wine business back in 2007, allowing it to be purchased by Gruppo Italiano Vini, now it is selling its flavored whiskey brand as well, allowing it to be taken over by Sazerac, for the dazzling price of more than half a billion dollars.
Brown-Forman will also be divesting itself of Tuaca, a vanilla-flavored liqueur which mainly consists of brandy and orange essence, and which the company added to its portfolio in 2002.
Sazerac will take over that product line too, the company’s chief executive officer and president Mark Brown announcing that plans are already in place to boost the two brands’ equity.
From now on, it is expected that Brown-Forman will devote its time and attention to Woodford Reserve Bourbon Whiskey and Jack Daniel’s Tennessee Whiskey, especially since the latter has remained the most profitable American whiskey worldwide.
Across the United States, more and more consumers have been favoring brown spirit such as whiskey and brandy to the detriment of clear ones, like vodka or gin.
For example, as revealed by the Distilled Spirits Council of the United States, in the last 4 years, Tennessee Whiskey and Kentucky Bourbon purchases have soared by approximately 7% on an annual basis, with exports climbing from $800 million a decade ago, to $1.5 million during the course of 2014.
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