Jack Daniel’s Tennessee Whiskey, celebrating its 150th anniversary this year, was toasted as the leading brand for Brown-Forman at the company’s annual meeting Thursday in Louisville.
To highlight the brand’s global reach, board chairman Garvin Brown IV told an anecdote about a business flight he took last year from London to Warsaw. A seatmate ordered Jack Daniel’s, only to be told that the plane was sold out. The man passed over the recommended substitute (apparently competitor Johnnie Walker, although Brown didn’t say the name) in favor of champagne.
“He left the category altogether,” Brown said, an illustration of what Brown-Forman sees as its top brand’s target competition: not just whiskey but all other premium drinks.
Paul Varga, Brown-Forman chairman and CEO, said the brand performed well in the past year, as did other American whiskey brands in the portfolio, including Woodford Reserve and Old Forester.
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As global anxiety increased in the past year with terror attacks and the financial uncertainty of the Brexit vote, Varga said, “the world decided it needed a real drink … made by real craftsmen in a real place. ... This is the time for American whiskey.”
Offshoots also did well, he said. Jack Daniel’s Tennessee Fire had a successful national introduction last year, and Tennessee Honey has become the company’s second-biggest brand behind only Jack Daniel’s black label.
Last month, Brown-Forman reported that annual sales were down 2 percent to just over $4 billion, but the company forecast growth of 4 to 6 percent for fiscal 2017. The company’s total shareholder return for the year grew by 8 percent, behind competitors Campari and Remy, but ahead of Diageo.
In the past year, the company broke ground on a $50 million Irish whiskey distillery at Slane Castle, bought the BenRiach Scotch distillery business for $416 million, and released Coopers’ Craft, the company’s first new bourbon brand in 20 years.
Of the new bourbon, Varga said: “We feel this is a very big idea, not just for today but for 20 years from now.”
Varga highlighted the difficult decision made last year to sell longtime brand Southern Comfort and Tuaca (to Sazerac for $543.5 million) as an example of the company’s disciplined efforts to keep realigning Brown-Forman’s assets for the best return.
He cited the decision five years ago to sell Brown-Forman’s popular wines division, the move 10 years ago to sell Lenox china and Hartmann luggage and buy Casa Herradura tequila, and the push 20 years ago to expand globally and create Woodford Reserve bourbon.
Varga said those moves have paid off, giving Brown-Forman a top position among its competitors. Last year,Woodford Reserve topped the 500,000-case annual sales mark, and the company’s tequilas had a “breakout year,” with Herradura sales up 13 percent on an underlying basis.
At Thursday’s meeting, shareholders elected 12 directors and approved a two-for-one stock split.