Keeping an eye on Finlandia vodka
Steve’s breakdown: What’s the line? Lipstick on a pig . . .
That’s what’s going on with Finlandia. The planned new packaging is not going to help sales but we think they are dressing up the pig to raise the selling price of the brand.
Either way, if you know vodka and I know you do, this one could be a lead. Whether it’s now with Brown-Forman or once there’s a new owner. Pick out your timing.
LOUISVILLE, KY: The CEO of Brown-Forman has said the company is continuing to invest in Finlandia, a brand that was recently reported to be up for sale.
Paul Varga said yesterday he will “do the best job that we can to shore up” struggling brands. “Right now,” he added, “we continue to work Finlandia”. He said the vodka is going through a tough period, “but it doesn’t mean we don’t put our best foot forward”.
Last month, Brown-Forman declined to comment on a report it was looking to offload Finlandia. Earlier, Bloomberg had cited sources familiar to the matter in an article claiming the company is keen to focus its efforts on its whisk(e)y business. The report came two weeks after Brown-Forman re-entered the single malt Scotch whisky segment through its purchase of The BenRiach Distillery Co.
Finlandia’s struggles were highlighted in Brown-Forman’s FY results, released yesterday. The brand experienced a 5% decline in underlying net sales (-16% reported), pulled down by weak results in Poland and Russia.
Varga said he hopes new packaging can help boost volumes for the vodka but admitted that macroeconomic forces were affecting the brand.
“It’s just a very difficult time for the vodka segments in those eastern European countries right now,” he said. “We’ve seen this before with categories where they go through some rough times.”
However, he said the overall impact on Brown-Forman from the declines in Finlandia, and Canadian Mist, were “not that significant”.