Brown-Forman (BFB) UBS Global Consumer and Retail Conference summary

Market environment and demand trends

• Tariff changes announced, with implementation delayed until April 1, providing time for resolution efforts.

• Demand slowdown in spirits attributed mainly to macroeconomic factors, with some structural shifts from health trends and Gen Z behaviors.

• Consumers are trading down to smaller, more affordable sizes, indicating cyclical rather than permanent demand changes.

• Premiumization remains a tailwind, and spirits continue to take share from wine and beer.

• Emerging markets, especially in South America and Mexico, are driving strong growth, while Europe remains stable.

Portfolio evolution and strategic acquisitions

• Portfolio streamlined over 25 years, divesting non-core brands and acquiring high-margin, high-growth brands like Gin Mare and Diplomático.

• Recent acquisitions provide scale in Europe and support broader portfolio growth, especially for premium brands.

• Strategic focus on premium spirits, with new brands outperforming during strong market periods.

• Route-to-market strategy shifted to owning distribution in top international markets, enhancing competitiveness and margin capture.

• Ongoing expansion of own distribution, with new operations in Italy starting May 1.

Category outlook and innovation

• Whiskey remains a healthy category, with supply-demand cycles adjusting as large players act rationally.

• Premium aged spirits appreciate in value, supporting margin growth.

• Innovation pipeline includes successful line extensions and new premium offerings, such as Jack Daniel's age series and Woodford Reserve variants.

• Growth strategy relies on both core brands and double-digit growth from the rest of the portfolio.

• Focus on capturing new consumption occasions, especially among younger consumers and through RTD (ready-to-drink) products.