Brown-Forman hails role of travel retail in building American whiskey leadership

Brown-Forman Global Travel Retail marked 20 years since it formally entered the duty free and travel retail channel with a special event in Cannes last week. The division’s Managing Director Marshall Farrer hosted a press event at which he hailed the rise of the company’s brands.

He said that Brown-Forman holds 68% of the US whiskey volume share in the duty free industry and 75% of the US whiskey value share. He also noted that Brown-Forman has nearly tripled its volume in the duty free channel over the past 20 years.

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Marshall Farrer: Underlined Brown-Forman’s commitment to investing in travel retail

Brown-Forman senior leadership made the decision to formally enter the global travel retail business in 1996. The news conference last week was held on the new Brown-Forman stand which Farrer stated was part of the company’s increased financial commitment to the travel retail channel.

Farrer said that the company’s strength in the travel retail industry has been driven by the sustained performance of Jack Daniel’s and its sister brand Woodford Reserve.

Jack Daniel’s has grown at a compound annual growth rate (CAGR) of +7% by volume in the 20-year period, with the rest of the industry top ten spirits brands growing at just over +1% on average, Farrer said.

“In the 20 years that Brown-Forman has formally been in the travel retail, Jack Daniel’s has grown from the number 20 brand to its current number two ranking in the channel, and has more than tripled its volume,” he said.

Farrer praised his predecessors at Brown-Forman Travel Retail, saying that executives such as Richard Ferne, Patrick Moran and Jim Perry had helped “sow the seeds” of its success today.

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A toast to the portfolio: Brown-Forman Global Travel Retail Managing Director Marshall Farrer, BenRiach Distilleries Master Distiller Billy Walker, Slane Irish Whiskey Founder Alex Conyngham and Brown-Forman Whiskey Innovation Master Distiller Chris Morris in Cannes last week

Critically, said Farrer, Jack Daniel’s has developed a full portfolio over the past 20 years, including ten line extensions “while still tripling the volume of Old No. 7”. He noted in particular the premium and super-premium lines that have added interest in the brand, for example Gold, Sinatra Select and Sinatra Century.

Farrer also noted that Woodford Reserve Kentucky Small Batch Bourbon – which is also celebrating its 20th anniversary – is the number four bourbon in travel retail. Other significant anniversaries addressed at the news conference were the 150th anniversary of the Jack Daniel Distillery and the 70th anniversary of the Brown-Forman Cooperage in Louisville, Kentucky.

At the press event, Old Forester President and Managing Director Campbell Brown announced that Old Forester would soon have a greater presence in the travel retail channel. He noted that Old Forester is the only bourbon that has been sold continuously by the same company and family before, during and after Prohibition.

“Today’s international traveller is both sophisticated and insistent on brand authenticity. Our efforts within global travel retail revolve around leveraging the dynamic platform duty free provides to allow us to tell a unique and authentic Old Forester brand story and ultimately let travellers taste what an outstanding bourbon it truly is.”

Brown also noted that Old Forester was one of the fastest growing brands in the American whiskey category today. “We are now building a US$45 million facility in downtown Louisville that will allow us to grow capacity by 100,000 cases, and allow us to tell the story of the brand. That will be complete by late 2017 or early 2018.”

On taking a portfolio approach to American whiskey in travel retail, Farrer said the barriers were lowering as retailers understand and grasp the opportunity. He said: “Some people were doubters about the value of American whiskey as a portfolio but they’ve seen what the category can do when introduced as a concept. We have seen out-sized benefits for our trademarks though a shared approach but it’s important for us also to bring in more trademarks. We can introduce different price points and different experience into play. We think the growth opportunity here can be similar to what it once was for Scotch.”

The Jack Daniel's family underpins the company's American whiskey drive, which will feature further investment in travel retail
The Jack Daniel’s family underpins the company’s American whiskey drive, with new channel exclusives soon to appear in travel retail

Among the other brands, Farrer said that Finlandia was going through a tough period but was still a top 25 brand in the channel and was a key brand for the company in Russia and CIS.

He also cited the new single malt Scotches BenRiach, GlenDronach and Glenglassaugh as well as Slane Irish whiskey as a big part of the future.

“The new single malts have had almost no distribution in travel retail but we will design a portfolio offer that brings exclusivity to the channel. The category has seen +20% growth and many consumers are well versed in malts and these will drive further interest.”

He added: “Irish whiskey is a category that is alive and there are not many competitive offer relative to other categories. We will bring Slane, which has a great story and great people behind it, into the channel.”

Farrer also commented on how the premium spirits portfolio had now taken a dominant share of the Brown-Forman business. Wines is now a far smaller part of its business in the channel and the company has also divested Southern Comfort. “It wasn’t challenging and it wasn’t perhaps premium enough for what our and the consumers’ aspirations are.”

Farrer concluded: “We have unparalleled commitment to this channel and we will give it even more focus, underpinned by our production and cooperate expertise. You’ll see more channel exclusive offers from Woodford Reserve and Jack Daniel’s and from our single malts, the addition of Old Forester and Slane Irish whiskey.

For an exclusive pre-show interview with Marketing Director Eric Helms, click here.

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