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Brown-Forman, Sazerac Co. Agreed on the Sale of Southern Comfort and Tuaca
Brown-Forman Corp., which acquired Southern Comfort in 1979 and Tuaca in 2002, announced on Thursday that the company already decided to sell these liqueur brands to Sazerac Co, for $543.5 million
Southern Comfort, the sweet, whisky-flavored liquor has been into struggle in the market as flavors has been added to bigger whisky brands like Jack Daniel’s Tennessee Honey and Crown Royal Regal Apple, which indeed pushed into its category. Besides, Southern Comfort has also been unseated as the flavored whisky like Sazerac’s Fireball Cinnamon Whisky becomes the choice of people in most bars. Tuaca on the other hand is an Italian liqueur with tastes of vanilla and orange that Brown Forman acquired in 2002, in which also been decided to be sold along with Southern Comfort.
Base on the company’s close monitoring, Southern Comfort sales fell another 7% on its sales volumes in October 31, six months after it declined by 4% to 2.2 million nine-liter cases in April 30. It is really been a big thing compared to Brown-Forman Jack Daniel’s line of brands that rose within the year to 7% or 21.3 million nine-liter cases.
During an earnings call with analysts in December, Brown-Forman Executive Paul Varga said they really tried to prop up Southern Comfort even though most people already preferred a more traditional whisky and flavored options of famous brands like Jack Daniel’s and Crown Royal. The company still spent money for Southern Comfort last year, although it is already about to be sold and already looking for a buyer.
It spent for the release of video and song “ShottaSoCo” featuring actor Danny McBride that according to Spotify was a top-10 viral effort. “That’s evidence that the brand continues to get support and we continue to try to put our best foot forward in a really competitive environment for it,” Mr. Varga said.
The sale of Southern Comfort to Sazerac is expected to close March 1. The deal comes amid a prolonged slump for Southern Comfort. The sale is indeed very sensible for company’s strategy of getting itself out from producing challenged brands and noncore brands; as the company has already focused on Jack Daniel’s and Woodford Reserve. These brands have grown in recent years in spite of a surge in the sales of American whiskey.
After buying Southern Comfort, Sazerac is thinking of a brand that is globally known. The company believes it can revitalize the sales of Southern Comfort, as what the company done for world’s fastest-growing brands like Fireball’s sales increase.
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