Brown Forman Company Analysis
Brown Forman - Company AnalysisStraight up or mixed, whiskey or wine – Brown-Forman’s got a drink for you. The Louisville, Kentucky based company is the best known for its world famous whiskeys, Jack Daniel’s and Southern Comfort. It’s wine and spirits segment manufactures, bottles, imports, exports and markets a wide variety of other alcoholic beverages and wines (Bel Arbors and Bolla). But Brown-Forman is also part of a consumer durables segment which sells fine china (Dansk and Lenox), sterling silver jewellery and personal leather accessories (Hartmann). Flat profits in the distilling industry spurred Brown-Forman to develop an international presence by diversifying into non-alcoholic areas, adding more than 50 new markets during the mid 1990’s. For the six months ended 31/10/98, sales rose 4% to $1.02 billion. Net income rose 9% to $104 million. Results reflect higher sales volume sales for Lenox collections and improved manufacturing efficiencies.
History
In 1870, George Garvin Brown saw a need form a quality whiskey that met medicinal standards. With $5,500 of saved and borrowed money he began J.T.S Brown and Bro. Their flagship brand Old Forrester Kentucky Bourbon whiskey was sold in sealed glass bottles to assure its quality. Brown’s friend George Forman joined the company and hence led to the name being changed to Brown-Forman.
The incorporation of Brown-Forman occurred in 1901 just after Forman died. In 1904, Owsley Brown, George Garvin Brown’s son took a very important decision, to come into the business, thus beginning a tradition of family apprenticeship that continues to this day.
In 1933, prohibition, which hindered the initial progress of the company, died and Brown-Forman was able to establish whiskey as an alcohol beverage. Also in that year, Owsley Brown and several other prominent figures of the time, set up DISCUS (Distilled Spirits Council of the US). This trade organization has been instrumental in the education of abuse of alcohol. It is still very prominent today. This year also saw Brown-Forman’s first public stock issue, which provided a capital base that allowed the company to re-enter the American market with strength after the lean years of prohibition and depression.
1956 was another important year in the history of Brown-Forman as they made one of their most famous acquisitions. They purchased Jack Daniel’s distillery in Lynchburg, Tennessee. This has since become one of the most popular whiskeys in the world, and led to the company producing a net sales figure of more than $100m for the first time in 1960.
Since 1960, Brown-Forman has been littered with new acquisitions. These include companies such as Korbel California champagnes in 1965 to Moray Speyside Malt Whiskey in 1997. Other major acquisitions during this time include, ‘The Grand Old Drink Of The South’, Southern Comfort in 1979 and Lenox Inc. in 1983.
In recent news Brown-Forman’s Korbel champagne was named the ‘Official Champagne of the millennium in an agreement reached with the Times Square Business Improvement District. As a result Korbel will be...
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