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 32 of 71

that Brown-Forman is being studied by other family-owned companies as a best practice leader. It's shocking to see some of the people who have come here to ask the Brown family members how they do it." T A K I N G I T S L O W Either because of its long history, the slowed pace of the south or some other reason, Brown-Forman has never rushed its decision-making. The company has acquired brands consistently throughout its history, but rarely jumps on trends or strays from its core portfolio of North American whiskeys. And unlike nearly all of its competitors over the decades, the company has never been for sale. "We can't help but cherish such a successful business," Garvin says. "The strategy of our company for many de- cades has been quality and long-term brand building. It's fundamentally paid off with a great return, both measured in conventional Wall Street statistics like shareholder return, as well as personal benefi ts for the family. We have a single policy, which is to continue to control this company and remain independent." As a territory manager responsible for sales, Robinson ap- preciates the company's focus on long-term growth rather than quarterly earnings. "There's a comfort level here," he says. "As long as you're doing the right things for the brands and the business, that's all we ask of employees. We want them to think more me- thodically and strategically, focusing on the long-term." Brown-Forman's approach is especially important now, as the whiskey category continues to boom and fl avors are beginning to take hold. "It's very easy for us not to jump on the bandwagon, instead being very measured about the products we put out," Keyes says. "We're creating fantastic handcrafted products and we're doing great with Tennessee Honey and Fire, but we're looking at the long-term. We won't have fi fteen fl a- vors – we want to treat these brands with dignity and equity. We won't saturate the market just because there's a new trend – other companies will, but Brown-Forman won't." The slow pace works well in the whiskey industry, where product development is measured in years and decades, not weeks or months. "In the four years it takes a single bottle to reach the shelf, the whole world will change for electronics companies and Wall Street, a whole generation of buzz words will come and go, but we'll still be working on that same bottle of whiskey," Garvin says. "Knowing the pa- tience and long-term planning that's required in our industry, it's safe to say we thrive in a family ownership structure. We're not about quarterly capitalism, we're about gener- ational capitalism." The long-term strategy has gotten Brown-Forman through lean years, and it's paying off now that consumers have embraced the whiskey category once again. "Everyone talks about how we're well positioned now to take advantage of category trends, but I humbly submit it's just the opposite," Garvin adds. "We're not well-positioned for trends; we stick to our guns and create category trends. We didn't walk away from Tennessee and Kentucky in the 80s and 90s. We kept telling consumers about the values of Lynchburg and broke ground on a new distillery in Wood- ford County." "Those are things that a normal public company wouldn't have done during the vodka boom, but we did because we had faith in consumers," he says. "Being a family company got us through those periods and is benefi ting us today." L O O K I N G T O W A R D T H E F U T U R E "One thing that separates this company from others is that we have a vision of perpetuity," Keyes says. "The family wants to hand this company down to the next generation – I've never heard that elsewhere. I've heard people say they want to be number one, or lead a category, but for us the number one vision is perpetuity." And what advice does the current leadership team have for its descendants, who will make the decisions whether to remain independent, or to stay in business at all? "We're in a good position now with brown spirits, but in twenty-fi ve years that might not be the case," Garvin says. "When the sixth generation looks back to the fourth and fi fth, and even the third, I hope they do what we did – which is to stick to our knitting and keep telling our story." More Online~ To read more about Brown-Forman's role in the current whiskey renaissance, as well as the com- pany's plans for Old Forester, visit www.beveragedynamics. com/generations. In His Own Words To hear Campbell speak about recent mergers and acquisitions within the beverage alcohol industry, visit generations. " The family sets us apart from many of the companies we compete with because we've been doing this for fi ve generations. We work extremely well and our business is built on partnerships, cooperation, thoughtfulness and trust. We have that internally as a family, and it's overlaid with our management team and board of directors. It's how we interact with our distributors and retail partners — and across functions as well. It's a huge advantage and something we're very proud of. " — Campbell Brown, President of Old Forester January/February 2016 • Beverage Dynamics 33 In His Own Words To hear Garvin speak about a Mint Julep cup that's very special to his family, visit www. " The big challenge for any family business is knowing where to draw the line between enthusiasm and interference. We're committed to striking a balance between engagement and stewardship, which means having the best leaders in the right jobs. " — George Garvin Brown IV, Chairman of the Board

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