How B-F Plans to Improve Top Line Growth

Dear Client:

Brown-Forman chief Lawson Whiting officially took over as president and ceo at the start of this year. Consumer Edge Research (CER) sat down with Lawson, cfo Jane Morreau and vp investor relations Jay Koval to discuss company improvements and opportunities, per a recent note.

IMPROVING TOP LINE GROWTH. B-F’s top line growth is below the overall spirits industry in the US. But they’ve got a few things in place to improve that, such as a “significantly ramped” advertising push towards the end of fiscal 2019 and normalized promotional activity.

Moreover, the efforts going into the next fiscal year “will be on support, not pricing adjustments,” according to CER.

THE PROBLEM WITH JACK DANIEL’S IS… CER believes sales growth for Jack Daniel’s will slow over time thanks to pressures like consumers fragmenting and shifting to higher priced items. Though others in the JD family are performing well in the US, including Gentleman Jack, Single Barrel, Honey and Fire.

The growth of Jack Daniel’s core variant lies in emerging markets. In fact, CER says expanding the company’s geographical footprint will be the “leading source” of future growth for Jack Daniel’s Black Label.

EMERGING BRANDS DIVISION. You’ll recall, B-F recently set up an emerging brands division in the US to refocus its resources behind super premium and heavy on-premise brands, such as Herradura, Old Forester, Woodford Reserve, Sonoma Cutrer, Slane Irish Whiskey and Glendronach and the BenRiach Scotch brands.

The division isn’t meaningful to the company yet in terms of growth, and CER doesn’t expect it will be for at least the next year or two. But the division is about planting seeds for future growth. Most likely, Herradura and Old Forester will be the first brands to phase out of the division.

“We see that unit being filled with other brands and used as a low risk test and learn operation where the company can get exposure to other parts of the industry,” per the note.

M&A. B-F brass told CER they’re comfortable with the current portfolio, but are open to acquisitions to better position the company. They noted categories they don’t really play in, like vodka and gin, are areas of acquisition interest.


Today Republic National Distributing Co. announced the launch of a new digital platform, called eRNDC, developed in partnership with online distribution platform Liberation Distribution (LibDib).

“It is an exciting time as our industry embraces digital transformation. We at RNDC are redefining how we interact with our customers and suppliers through digital experiences and e-commerce,” says RNDC coo Bob Hendrickson.

The wholesaler has launched eRNDC’s customer experience capabilities in Georgia and will roll out to other states in the coming months. It allows customers to access an online shopping and ordering experience as well as account information and sales team support.

A supplier experience will also be coming soon, which will provide a centralized port for product portfolio management, reporting analytics and more, per a release.

A key element of the new platform is a digital product calendar which provides digital assets and marketing content from suppliers directly to buyers, according to president of trade marketing Robert Olivares.

eRNDC was created in partnership with LibDib, who leveraged their digital expertise to “accelerate the delivery” of the platform, per release. You may recall, RNDC and LibDib teamed up last year, forming a strategic partnership [see WSD 11-26-2018].

“We worked with RNDC’s amazing business and engineering teams to develop an e-commerce platform that is powerful and unique to them,” says LibDib founder and ceo Cheryl Durzy. “RNDC customers will now benefit from an online experience and we are honored to be a part of RNDC’s innovation transformation.”

“We understand the expectations of our customers and suppliers are changing, and technology is a key component of how we will increase value for all our stakeholders,” says chief information officer Darrell Riekena. “With the innovations developed for eRNDC, we are poised to lead the wholesale beverage industry and look forward to delivering additional online experiences and advanced analytic capabilities.”


Yesterday, Illinois Attorney General Kwame Raoul announced charges against five Chicago liquor store operators for tax evasion and interstate liquor bootlegging scheme. The investigation is part of a joint effort between the state Department of Revenue and the Secret Service.

The indictments “are part of a concentrated effort between my office and the Department of Revenue to crack down on tax evasion and illegal interstate liquor sales,” says AG Kwame Raoul. “This should send a message that doing business in Illinois means following the state’s laws without exception.”

Those charged include:

  • Diptiben Patel, Patson Liquor
  • Ashwinkumar Patel, AM Wine and Spirits
  • Sanjakumar Son, KVS Calumet City Liquor Business
  • Rajendrakumar Patel, KVS Calumet City Liquor Business
  • Ajaykumar Patel, Dabaang, Inc.

This is the latest effort made by the AG to crack down on tax evasion. In 2015, a similar investigation led to charges against nine liquor store owners.

“On behalf of the 64 members of Wine and Spirits Distributors of Illinois (WSDI) and their 3,500 employees we are pleased to see the Illinois Attorney General’s office taking strong steps to crack down on sales tax evasion and interstate liquor bootlegging. It’s clear the AG’s office has recognized the amount of lost revenue and impact on Illinois jobs and we applaud his efforts,” says WSDI executive director Karin Matura.


After tallying up the votes, the American Craft Spirits Association (ACSA) has announced its 2019 board of directors lineup.  

Chris Montana, owner of Du Nord Craft Spirits, has been re-elected as president of the board. Privateer Rum president Maggie Campbell has also been re-elected as the board’s vice president. Colin Keegan, Santa Fe Spirits, will remain as secretary/treasurer.

The following are new board members:

  • Becky Harris, Catoctin Creek
  • Colton Weinstein, Corsair Artisan Distillery
  • Thomas Motes, Balcones Distillery
  • Dan Farber, Oscalis Distillery

The board will be appointing leadership to its governing committees within the next few weeks, per a release.


KENTUCKY OWL GETS NEW MANAGING DIRECTOR. Stoli Group USA announced the appointment of Lee Tatum as managing director for Kentucky Owl. Lee has more than 25 years of industry experience under his belt. He joins the company from Brown-Forman where he worked as vp and director of portfolio innovation. In addition, Jim Beam Noe will join the Kentucky Owl team as a consultant to “shepherd the development” of Kentucky Owl Park, the brand’s new destination experience.

Until tomorrow,

“Either I will find a way, or I will make one.” – Philip Sidney

——- Sell Day Calendar ———
Today’s Sell Day: 17
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Tues.
This month last year ended on a: Mon.
YTD sell days Over/Under: 0