Jack Daniel's Tennessee Whiskey is the behemoth of brown spirits, but parent company Brown-Forman thinks it could be bigger still.
Only one brand in the world that is above the $25 price for a premium product sells more than 10 million cases worldwide, Brown-Forman's chairman and CEO said.
"That's Old No. 7," Paul Varga told shareholders at the company's annual meeting Thursday in Louisville.
Varga said that through competitive pricing, global expansion and successful extensions of the Jack Daniel's brand line, Brown-Forman can do even better.
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"The whiskey category worldwide ... is the top-performing spirits category of the last 10 years, at 6 percent annual growth. Within it, premium-plus (the higher-priced level) is leading the growth, which is where Jack Daniel's is placed," Varga said. "Within whiskey, which includes scotch, Irish and Canadian, U.S. whiskey is now outpacing every category, in part because Jack Daniel's is driving, which is very exciting for the bourbon business."
Despite its dominance, Jack Daniel's has only a 3 percent share of the whiskey category, Varga said.
"It's hard to say we just cracked the surface with the size of the brand, but there's a lot of opportunity there."
Varga outlined how the company has built on the core of Jack Daniel's with its most successful extension, Tennessee Honey — launched in the United States in 2011 and internationally last year to tap into the exploding flavored-whiskey market.
Sales of Tennessee Honey nearly doubled last year, accounting for about a fourth of Brown-Forman's net sales growth of 8 percent in fiscal year 2013, which ended in April.
Overall, earnings per share for the year were up 16 percent for the $15 billion spirits maker, with income up 13 percent.
"It's been a good year at Brown-Forman," Varga said. "This garden is in bloom."
And, he said, Jack Daniel's is hardly the only flower in that garden.
Woodford Reserve, the company's premium bourbon brand, made in Woodford County, again saw double-digit growth, to 250,000 cases last year.
"Woodford's on fire," Varga said. Brown-Forman plans to capitalize on the renaissance in American whiskey with a $36.25 million expansion that eventually will double production and increase warehouse storage to 165,000 barrels, and expansions at the company's cooperage division and at Jack Daniel's in Tennessee.
"I hope what I've shared here today is proof your investment in the company will remain a strong one," Varga said.
Shareholders re-elected 10 directors to the board Thursday and approved a new 10-year omnibus compensation plan designed to help the company attract and retain key executives.
Re-elected were Joan C. Lordi Amble, Patrick Bousquet-Chavanne, George Garvin Brown IV, Martin S. Brown Jr., Bruce L. Byrnes, John D. Cook, Sandra A. Frazier, Dace Brown Stubbs, Paul C. Varga and James S. Welch Jr.
In a separate meeting, the board of directors approved a regular quarterly cash dividend of 251/2 cents per share on Class A and Class B common stock.
For fiscal year 2014, Brown-Forman has predicted high single-digit growth in sales, driven by continued expansion of Jack Daniel's and its Tennessee Honey.
In Securities and Exchange Commission filings, Brown-Forman said 2014 diluted earnings per share are expected to be in the range of $2.80 to $3, compared with 2013 earnings per share of $2.75.