By Tripp Mickle
Brown-Forman Corp. said it plans to invest an additional $20
million on a $50 million effort to revive its Old Forester bourbon
brand and named Brown family member, Campbell Brown, president of
the unit, which sold just 112,000 cases last year, down from its
1972 peak of 1 million cases.
The decision comes amid a bourbon rage that Old Forester has
basically missed out on. Sales have surged by more than 35% in the
U.S. in the past five years and by 50% overseas. Cowen and Company
analyst Vivien Azer expects American whiskey, led by bourbon, to
continue to deliver mid- to high-single digit growth annually for
the rest of the decade.
"Our goal for the brand is to bring [Old Forester] back to
global prominence," said Lawson Whiting, Brown-Forman's chief
brands and strategy officer. "We want to get back over 500,000
cases pretty fast."
The effort is driven by Brown family members who control nearly
70% of Brown-Forman; they've been asking privately for years for
the company to pay some attention to Old Forester, its founding
brand, instead of focusing so much on faster-growing Jack Daniel's,
acquired in 1956.
Old Forester was marketed as "America's Guest Whiskey," an
elegant bourbon meant to be served to visitors during the whiskey
heyday that followed World War II. Then sales collapsed in the late
1970s as Americans' preferences shifted from whiskey to vodka and
wine. Several distilleries such as Old Crow and Old Taylor folded
because of plummeting demand.
Old Forester survived but the company neglected it, focusing
instead on Jack Daniel's, which it acquired in 1956, and Woodford
Reserve, a premium bourbon it introduced in 1996.
Mr. Brown concedes it is a risk: "We're rolling the dice on a
brand that hasn't had much wind at its back for a while."
The company plans to use the $20 million it is investing in the
brand to boost Old Forester's "retro appeal," Mr. Whiting said. It
will invest in point-of-sale materials at retail, promotions at
bars and digital marketing. It also plans to hire additional sales
staff and personnel for its new, $30 million distillery in
Louisville. The distillery will open in 2016 and be the first in
Kentucky where visitors can watch employees make oak barrels and
char them with fire, a critical step in the bourbon-making
process.
Reviving Old Forester won't be easy. Brown-Forman will need to
boost sales outside Kentucky and Alabama, which accounted for
almost half of Old Forester volume last year. Mr. Brown said the
company will target people in their twenties in urban markets like
New York, Chicago and San Francisco where bartenders increasingly
use bourbon for cocktails like the Old Fashioned.
Old Forester sales at restaurants and bars nationwide increased
40% in 2014 and are up 40% so far this year, according to tracking
service GuestMetrics. The brand "is gaining share" through
increased distribution and "sales velocity," said Bill Pecoriello
of GuestMetrics.
The investment in Old Forester comes as competition in the
bourbon category heats up. The number of firms with distillery
licenses in Kentucky has more than doubled to 26 from 10 in 2011,
according to the Kentucky Distiller's Association. Many are craft
distilleries launching new brands.
Diageo PLC, the world's largest liquor maker based in London,
which acquired Bulleit Bourbon in 2001, has increased total volume
to more than 600,000 cases from 35,000 in 2007. Last year, it
expanded distribution overseas and announced a new $115 million
distillery in Shelby County, Kentucky that will produce 750,000
cases a year.
With other bourbon brands "showing up with no history" in recent
years, Mr. Brown said the family was "not going to watch this take
place and not participate." Old Forester will be priced at about
$25 and compete head-to-head with Bulleit and other bourbons in the
midtier price range, said Mr. Brown. The goal is to top 500,000
cases in the next five years.
Mr. Brown is the first family member to lead the Old Forester
brand in a century. He is one of 11 fifth-generation Brown family
members working at the company. He was tapped for the Old Forester
job because he has spent 20 years with the company working both in
the U.S., where he managed Midwest operations, and abroad, where he
ran operations in Turkey and Canada.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
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