Brown-Forman Corp. finds new Italian distributor
World famous distiller Brown-Forman Corp., the company responsible for Jack Daniels bourbon and its various iterations, as well as Woodford Reserve and Finlandia Vodka, has a new Italian distributor: Gruppo Montenegro, an Italian spirits and food manufacturer.
Of course, Brown-Forman’s spirits are not new to Italy, and they were previously distributed by Campari Group in the country – so why the change? Campari owns a key rival in the bourbon business: Lawrenceburg Kentucky-based Wild Turkey.
Brown-Foman’s share price has appreciated by 47% over 12 months
SOURCE: Yahoo Finance
Brown-Forman has good reason to not want to play nice with other bourbon sellers. Consider this: according to Heaven Hill chief operating officer Allan Latts, bourbon drinkers are diversifying, and there’s no better time to grow the user-base. He told listeners at a presentation recently that: “they’re young, they’re single, they’re urban, they’re rural.” And he added that they have a wide income range and drink in non-traditional places.
There is a vast opportunity for bourbon sales to grow, and according to Latts, just 10% global growth would equate to an additional $2 billion in sales. As the competition heats up in this product segment – and particularly between high-end spirits like Jack Daniels and Wild Turkey, it’s eminently understandable why Brown-Forman would not want to trust a rival with distribution of its signature brands.
Brown-Forman is in a particularly strong position to grow into new markets. It’s products appear in more than 165 countries around the world, and they’re more diversified than you might imagine. It’s true that North America is its number one market, accounting for 48% of sales – but that means that 52% of sales are coming from international markets. Amongst the largest are the United Kingdom, Australia, Mexico, Germany, France, Poland, Japan, Canada, and Russia. Its new partnership with Gruppo Montenegro could add Italy to that list.
Dominion holds Brown-Forman Corp. in its Global Trends Luxury Fund.
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