Beverage Dynamics

Beverage Dynamics Nov-Dec 2014

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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12 Beverage Dynamics • November/December 2014 www.beveragedynamics.com Brand SPOTLIG HT Q&A SPOTLIG HT S Recently I spoke to Mike Keyes, the North Ameri- can Region president at Brown-Forman who's been with the company for 24 years. We talked about Brown-Forman's tradition of whiskey-making, its recent infrastructure investments and what sets the Kentucky-based company apart from its multi- national competitors. The following is an edited portion of that conversation. BD: Consumers, especially in the whiskey category, seem to be drawn to stories about tradition and heritage. How important is it for Brown-Forman to talk about the history of its brands when speaking to consumers? That's 100 percent right. Consumers today look for a lot of things, and one of those is authenticity. This is a time when whiskey is going through a renaissance and there are a lot of new products out there. The great thing about George Garvin Brown is that he put a guarantee on his whiskey, and as the category gets bigger we see more new whiskeys out there and they're not all man- ufactured the way consumers may think they are. So when you look at Old Forester coming up on its 145th year, not only is it pretty remarkable to survive that long, but we still strive to live up to that guarantee from 1870. The other aspect related to authenticity is that this is an American company and has been controlled by the Brown family for almost 150 years. We're in our fi fth generation and there aren't many companies left like that anymore. There are very few American distilled spirits companies, and certainly none our size. So it's becoming a rarity for a company as large as Brown-Forman to remain an American company and we're very proud of that. BD: What sets Brown-Forman apart from other beverage alcohol companies? It's great to be able to talk about George Garvin Brown and Jack Daniels and other pioneers in our industry. They were real people, not cartoon characters. We're able to show their photographs and talk about the history they left behind, which really resonates with consumers. Something else that resonates is a home place. People can go visit where our products are made and there's a history there. For example, every drop of Jack Daniel's since at least Prohi- bition has been made in Lynchburg, Tennessee. Old Forester is all made in Louisville, and we make Woodford at a single distillery in Kentucky. They're real-life places where consumers can learn, smell, taste and see how everything comes together. For me the only thing in our industry that com- pares to the Bourbon trail is Napa — nothing else comes close. The craftsmen who make our products, the mas- ter distillers, are artists and I often compare them to winemakers. They start with some rules about making Bourbon or whiskey a certain way; then they work with the rest of the artists' palette to make the product unique. People are looking for crafted, fl avorful products. The modern consumer wants a more fl avorful alternative to competitors' spirits and I think that's one reason whiskey is doing so well. BD: How will your recent investments help the company grow? We've made a $30 million-plus investment in the Old Forester Dis- tillery, with another $35 million at Woodford and $100 million for Jack Daniel's — but the most signifi cant thing we've done of late is build a new cooperage in Alabama for $60 million. As whiskey is booming, it's becoming scarcer for some folks in the business. Our ability to make barrels puts us in a unique position. Five or ten years ago people thought we were silly to own a cooperage — now we own two and look like geniuses. So I guess timing is everything. In the whiskey industry about half the fl avor in our product comes from the barrel, so it's a great advantage that we make 600,000 barrels per year — all for Brown-Forman whiskeys. By owning a cooperage, you become cooperage experts. So we don't go to a cooperage and ask for a heavy char, we can test dif- ferent roasts and chars ourselves. We're constantly innovating at the cooperage with different fi nishes and fl avors. In this era where consumers are looking for the latest new thing, we're uniquely posi- tioned to bring them those innovations. BD: How did Brown-Forman remain a family-owned company for so long? Do you think that will change? It was very purposeful - the company actually wants to be around. One of our core missions is perpetuity, which is a funny mission, but the Brown family is committed to the business and wants to remain in the industry. Most of the American companies that were at the top of the industry in the mid-century moved to New York. They got away from the Bourbon belt, which made it easier for them to get out of the business. Brown-Forman lives and breathes whiskey; it's very active in the community. That makes it easier for them to endure and more diffi cult to leave the industry because this is where they live. BD HISTORY AND HERITAGE A conversation with Brown-Forman's Mike Keyes. Michael J. Keyes, President of the North American Region at Brown-Forman.

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