Taking it Slow
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 decades 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 benefits 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 appreciates 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 methodically and strategically, focusing on the long-term.”
Brown-Forman’s approach is especially important now, as the whiskey category continues to boom and flavors 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 fifteen flavors – 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 patience 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 generational 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 Woodford 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 benefiting us today.”
Looking Toward the Future
“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-five years that might not be the case,” Garvin says. “When the sixth generation looks back to the fourth and fifth, and even the third, I hope they do what we did – which is to stick to our knitting and keep telling our story.”
Jeremy Nedelka is editor of Beverage Dynamics Magazine. Reach him at JNedelka@EPGMediallc.com