Don't blame Brown-Forman (B-F) employees if the company Christmas party gets out of control; they have lots to drink on hand. The company's portfolio of mid-priced to super-premium brands includes such well-known spirits as Jack Daniel's, Canadian Mist, Finlandia, Southern Comfort, and Woodford Reserve. Its wine labels include Sonoma-Cutrer and Korbel champagnes. Jack Daniel's is the company's leading brand and is the largest-selling American whiskey in the world (by volume). Offering some 25 brands of wines and spirits, the company's beverages are available in some 135 countries throughout the world. The founding Brown family, including former chairman Owsley Brown II, controls the company.
B-F distributes products in about a dozen markets including Australia, Brazil, Canada, China, the Czech Republic, Germany, Korea, Mexico, Poland, and Taiwan. The company added Turkey in 2012 as another distribution market. The international distribution outlets sell mainly to retail stores and wholesalers.
Overall, net sales in 2012 for B-F increased by 6% to $3.6 billion in 2012 compared to 2011. Over the last five years the compound annual growth rate for net sales came in at around 5%; while operating income was about 6%. B-F has found global success by introducing Jack Daniel's and other labels into new markets overseas. The company's principal export markets --around 55% of net sales -- are Australia, Brazil, Canada, China, Czech Republic, France, Germany, Italy, Japan, Mexico, Poland, Russia, South Africa, Spain, Turkey, and the UK. In the UK, it partners with competitor Bacardi to sell a combined portfolio of both companies' products. Since 2002 international sales have more than double from around 25% to 60% in 2012. Europe accounted for some 25% of net sales in 2012. And although B-F is an international company, close to 45% of its sales are generated in the US. Net sales in the US were flat due to the sale of Hopland-based wine business, which was sold in fiscal 2011.
Jack Daniel's is B-F's most important brand saw net sales for the Jack Daniel's family of brands grew by 9% in 2012 helped by the introduction of Jack Daniel's Tennessee Honey in the US. (The brand family includes Jack Daniel's Tennessee Whiskey, Jack Daniel's Tennessee Honey, Gentleman Jack, Jack Daniel's Single Barrel, and Jack Daniel's RTD [ready-to-drink] products, including Jack Daniel's & Cola, Jack Daniel's & Ginger, and Jack Daniel's Country Cocktails.) Consumption of Jack Daniel's Tennessee Whiskey reached 10.8 million nine-liter cases, up 8% for fiscal 2012; while consumption was fueled 12% growth internationally and up 2% in the US.
As part of an ongoing review of its offerings, B-F sold its Fetzer Vineyards to Chilean wine producer Vina Concha y Toro SA for $238 million in 2011. The sale included the Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary, and Little Black Dress brands and related assets in California. (B-F's premium Sonoma-Cutrer and Korbel California Champagne brands were not included in the sale.) Previously, the company sold the Italian wine brands Bolla and Fontana to Gruppo Italiano Vini in 2008. The twin sales have shortened the company's wine list considerably.
Despite the recent disposals, B-F has been adding to its spirits portfolio. In mid-2011 the company acquired the Maxiumus Vodka brand from Altia, a Finnish maker and distributor of spirits and beer. B-F has been the exclusive distributor of Maxiumus Vodka in Poland since 2004, when it purchased Altia's Finlandia Vodka brand. – less