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Brown-Forman executives: Mark McCallum, Paul Varga and Jim Bareuther BROWN FORMAN BRAND BUILDING AT ITS BEST Text by Kristen Wolfe Bieler ■ Photograph by Andrew Kist Off recent success, this 137 year-old company launches new go-to-market game plan Last year was Brown-Forman’s best. Sales hit ty to make some big changes to our organi- an all-time high at nearly $2.4 billion and zation. It is much easier for a company to the company’s driving brand – Jack Daniel’s realign when it’s strong and performing – outperformed any previous year. With well,” says Paul Varga, Brown-Forman’s business going so well, it may seem an CEO, and only the third in the company’s his- unlikely time to completely overhaul corpo- tory not to be a member of the Brown family. rate infrastructure, change sales and market- Brown-Forman’s most significant new ing strategy and appoint a new CEO, but strategy was to combine its spirits and wine this is exactly what Brown-Forman did. portfolios. A reorganized and unified sales “We have tremendous momentum right and marketing organization went into oper- now, and we feel that gives us an opportuni- ation in July 2006. Jack Daniel’s at the top “Size has its advantages, but when it of Its Game comes to building brands with the It is almost hard to conceive of a brand more powerful than Jack trade and targeting consumers, the Daniel’s. With a rich and long history, individual brands require undivided it resonates more than ever with con- sumers today. Last year the brand hit attention. For example, if Don Eduardo an all-time high at 8.5 million cases worldwide. “We joke all the time that wants to compete against Patron, it Jack Daniel’s is consumed by ‘young legal drinking age consumers to had better be focused.” those damn near dead.’ People come – Paul Varga, CEO, Brown-Forman to this brand and stay with it,” says John Accardo, head of Brown-Forman’s eastern sales division. “And, much of this is driven by our continued ability to be relevant across a broad spectrum of consumers, both male The newly designed organization will fy the target consumer for that brand.” and female. Jack Daniel’s has transcended allow Brown-Forman to utilize its full In addition, removing “wine” and the category. While it is a whiskey, to con- portfolio breadth and strength in “spirits” categories will allow Brown- sumers it is first and foremost just ‘Jack.’” partnering with distributors and retail Forman to cross market in more effec- The brand isn’t bulletproof, however, and customers, while also creating tive ways. “Sonoma Cutrer is about as experienced a decline in the mid-1990s, stronger focus on brand-building different from Bolla as it is from Jack along with most other brown spirits. Brown- activities directed to consumers,” Daniel’s,” observes Bareuther. “And it Forman started supporting the brand in new explains Varga, who believes the new is probably more similar to Woodford ways, and thanks to the “unwavering support structure gives the company the best Reserve when it comes to consumer of retailers,” says chief operating officer Jim of both worlds. “We are able to use appeal and message. We think about Bareuther, the brand has continued to grow the benefit of our size to get influence our products as brands, not as part of a for the last 14 consecutive years. The cock- where it is important, while allowing certain category.” tail craze added fuel as well. “Consumers our employees to split off and act like Coming from a consumer goods used to look at Jack Daniel’s as harsh entrepreneurs. Size has its advan- background, Mark McCallum, Brown- whiskey to drink on its own,” says Chris Burt, tages, but when it comes to building Forman’s chief brands officer, says he head of Brown-Forman’s western sales divi- brands with the trade and targeting “struggles to even believe that brown sion. “But now Jack Daniel’s-based drinks consumers, the individual brands versus white is a relevant segmenta- like Lynchburg Lemonade, which really require undivided attention. For tion.” When people talk about brown speaks to women, are giving consumers new example, if Don Eduardo wants to spirits declining, McCallum points to ways to drink it.” compete against Patron, it had better brands like Captain Morgan, Crown Today, Jack Daniel’s has an entire brand be focused.” Royal, Jack Daniel’s and Southern team behind it, executing promotions like the Comfort; some of the hottest brands tremendously successful sponsorship of in the industry that are growing at NASCAR, as well as Western lifestyle events THINKING BRANDS, double digit rates. The craze over like rodeos and bull-riding. “We have been white spirits and vodka, according to quite active over the last couple of years in NOT CATEGORIES Varga, has more to do with a “move the Hispanic market too,” In many ways, this new business model towards mixibility” than anything says Accardo. “I think reflects a way of thinking that has long else. And mixibility is a trend working the core to our success been part of Brown-Forman’s brand- for brands across the color spectrum, has been a continued building mantra: disregarding category particularly “Jagermeister, Jack rigorous focus on con- definitions and constraints in order to Daniel’s, and Cuervo Gold,” he observes. A more useful segmentation sumer experiential mar- focus on brand strength. “If we were to might be premium versus value keting and activation, in be driven by categories, we would have brands. “The majority of low and pop- terms of really dealing exited the brown goods category in ular priced brown spirits are struggling with the consumers 1994,” says Jim Bareuther, chief oper- because of the consumer trend towards one-on-one.” ating officer. “We’ve never marketed categories; we build brands and identi- premiumization,” says McCallum. Finlandia: Brown-Forman’s Most Global Brand Finlandia is a two million-plus case brand, earning its place as the world’s 6th largest vodka. Unlike most of Brown-Forman’s other brands, however, the vast majority of Finlandia’s volume is coming from non-U.S. markets, which, according to McCallum, spells untold opportunity within American borders. “Only 320,000 cases of Finlandia’s 2.2 million sells in the U.S. Yet, it is the mar- ket we are most excited about for this brand,” he says. “Finlandia is in that premium vodka category that Absolut really created, and we think there will continue to be strong growth in this segment.” The vodka category remains Brown Spirits Leaders: ruthlessly competitive and cluttered, and recent growth for the brand is Early Times, Old attributed to “a multi-year process of enhancing the package,” according to Bareuther, as well as new flavor introductions – Wild Berries and Grapefruit, Forester, Canadian Mist which join Lime, Mango, Cranberry and Redberry – and a new ad campaign and Woodford Reserve which speaks to the quality of the product. “The brand team has done an amazing job in the past three years of really discovering the essence of the While Brown-Forman resists the brown- brand and the notion of real natural purity,” says Accardo. versus-white category distinction, it is impossible to deny their skill at marketing and selling spirits of color. Their whisky portfolio cuts across multiple price cate- gories, with leaders like Early Times (bour- bon) and Canadian Mist (Canadian The benefits of Brown-Forman’s advantages to being medium-sized, whisky) at the lower end and Woodford new mode of operation is already evi- even as the larger players consolidate. Reserve at the high end. denced in the marketplace, believes Varga – who frankly states the compa- “The Midwest and Southeast are very John Accardo, head of Brown- ny doesn’t “obsess about our size” – strong, old-line Bourbon markets for Forman’s eastern sales division. While sees the industry around him expand- brands like Early Times; they have a very he sees the obvious advantage of a uni- ing, not shrinking: “Consumers are strong consumer base with great brand fied portfolio from a distributor and drinking more and paying more for loyalty,” says Accardo. “We’re continuing retailer relationship standpoint, noth- wine and spirits. This is a major evolu- to build on the strength of those standard- ing can replace a hand-sell when it tion, which has been steadily building priced, middle-tier kind of brands, utilizing comes to the consumer, and that is since 1997 and there is no evidence to mixology and creating cocktails,” he adds. exactly what the new in-market brand suggest that small and mid-size compa- Old Forester, the company’s founding activation teams provide. “We know nies can’t compete.” Such expansion brand, was recently repackaged and its from years of experience that direct and opportunity means that compa- reserve vintage bottling, Old Forester contact between a brand spokesperson nies have to “elect” to take themselves Birthday Bourbon at 96 proof, is widely and consumers as well as key influ- out of business, he says, as many have. adored by critics. Fueled also by an inno- encers on- and off-premise is the most But few companies cherish their inde- vative package redesign, Canadian Mist – effective way to build a brand,” says pendence as fiercely as Brown- still the 13th largest distilled spirit brand Accardo. “We weren’t trying to fix a Forman. “If you look at a list of the top overall – continues to buck the category problem with this new structure; we 10 wine and spirits’ companies in the trend, with steady peformance.

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