Beverage Dynamics

Beverage Dynamics Jan-Feb 2016

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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Page 31 of 71

K E E P I N G T H E F A M I LY E N G A G E D You'll be hard-pressed to fi nd someone connected to Brown-For- man who doesn't love, respect and revere Owsley Brown II, who led the company from 1993 to 2005. "He was a wonderful human being and leader," Keyes says. "He was brilliant, kind and nurturing, and when he passed away it was a huge blow. He'd already retired, but it was a blow to everyone who knew him. I saw the respect that the people of the community and the employees gave him." As the extended family grew, Owsley realized that there was a danger of having an ownership group that's removed from the culture and operations of the company. One way he engaged with the non-employee family members was to invite everyone back to Louisville for an annual shareholders meeting (something Paul Varga has continued as CEO). "It starts with the kids, who are given coloring books made about the history of the company," Keyes says. "They make soft drinks in the labs and tour the facility. At an early age they're being exposed to the company." As they get older, teenagers get a deeper dive into the history and production processes at Brown-Forman, and the adults sit down with management to talk about the fi nances and ask questions about products and plans. In 2007 when Paul Varga became the third non-Brown to lead the company, he and Garvin devised a way to form even deeper relationships with the extended family. "We knew we had to double-down on engaging with the fi fth generation, which includes about 40 cousins," Garvin says. "We set up the Brown Forman Family Shareholders Committee and de- liberately set up a structure that would formally introduce the family to the business and culture, hoping to fuse people closer to the company rather than letting them drift off into their lives around the world." About a dozen committee members attend meet- ings throughout the year, engaging in topics ranging from industry dynamics and trends to best practices related to family governance of a public company. "People who work inside the company really ap- preciate that a dozen Brown family members are volunteering their time to fi nd out about and help the company," he says. "The employees feel that support from the shareholders and it reinforces the company culture, which we feel is critical." Today there are no signs of changing those policies. "Paul has inherited this gift from Ows- ley, which is the nurturing of the fi fth and soon to be sixth generation," Keyes says. "You don't see that with a lot of other companies – to the point AN IMPORTANT FAMILY PARTNERSHIP Blue Crest Wine & Spirits was founded by Charles Merinoff Sr. in 1944, even- tually becoming Charmer Sunbelt through a series of name changes and mergers (the distributor recently announced a merger with Wirtz Beverages, another family-owned company, which would create one of the largest beverage alcohol wholesalers in the U.S.). Control of the company passed from Charles Sr. to his son Herman, and then to current Chairman and CEO, grandson Charlie Marinoff. As multi-generational family businesses, Brown-Forman and Charmer have devel- oped a strong partnership over the years. "Almost all the time, being family controlled is an advantage in this industry," Robinson Brown IV says. "Our family history and philosophy are very different from some of our competitors, and it's very complimentary to Charmer and their family ownership structure." "Even before the merger with Wirtz, Charmer was our largest distribution partner in the U.S., with nearly a quarter of our business," he adds. "The Brown-Forman mentality, which comes from the family's influence, adds a very unique competitive advantage for us. We don't make decisions quickly and we tend to think long-term about everything we do, much like the Merinoffs, which is a nice dynamic for us in a partnership." In today's world of corporate takeovers, acquisitions and interna- tional buyers, leaning on long-lasting relationships means survival for indepen- dent suppliers, distributors and retailers. "Working with family- owned distribution and retail partners is critical," Garvin Brown IV says. "I find that the other tiers are waiting with open arms for a company that will talk to them about a partnership and culture, not just margins." "Thanks in no small part to multi-generational partnerships at the retail and distributor level, we've been able to have a successful business," he adds. And the current leader- ship teams at both compa- nies are diligently working to ensure that those rela- tionships built over decades remain strong, continuing into the foreseeable future. "I'm absolutely certain that our customers, since many of them own gener- ational, familial businesses as well, have a special place in their heart for Brown-For- man," Mike Keyes says, "Just as we have a special place in our heart for them." "When Mac Brown - a fourth generation family member - tells his son Chris that he needs to meet Charlie Merinoff, it's a spe- cial bond rather than a pure business play," Keyes adds. "It's a relationship, rather than a transaction." BD In His Own Words To hear Mike speak about global whiskey market trends, visit www.beveragedynamics. com/generations. " I've lived in Louisville for the better part of twenty-four years, and I've grown to love it. To see what the family does in the community makes me proud to work for Brown-Forman. Anything you're part of, from the arts to non-profi ts to even politics, there's a footprint for the family – a very caring and nurturing footprint. Anywhere you go, if I tell people I work at Brown-Forman, ninety-nine percent of the time I'm met with, 'They do so much for the community; they're a great company.' " — Mike Keyes, President of the North American Region 32 Beverage Dynamics • January/February 2016

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