US: Small companies have forced us to innovate - Brown-Forman CEO
Brown-Forman has innovated to keep up with smaller firms taking market share
Brown-Forman's CEO has admitted the company has been forced to innovate as the pool of available acquisitions has shrunk and smaller brands have taken market share.
In an exclusive interview with just-drinks, Paul Varga said that Jack Daniel's Tennessee Honey came after seeing the role innovation can play and how smaller companies have flourished. “Observing these trends a couple of years ago, sparked us to focus on innovation,” Varga said.
“One of the results was Jack Daniel's Tennessee Honey [launched last year], which showed a more innovative and organic approach to competition. That's not to say it has to come at the direct expense of acquiring things, but when you're losing share or there's nothing available, necessity creates some of that innovation.”
He added: “There are alternatives to growing beyond just acquiring.”
However, Varga would not be drawn on the possibility of Brown-Forman making a play for Whyte & Mackay, if it becomes available in the wake of the Diageo and United Spirits deal. But he said: “When studying the landscape of where one might get enduring growth, one of the first places you go is the whisk(e)y category...we've also been able to witness the large interest in - and the consumption patterns associated with - both Scotch whisky and Irish whiskey.”
Varga said there is “many wonderfully attractive brands around the world” and the company is in a comfortable position to make an acquisition. But he added: “It requires patience: We have that patience. We're controlled by a family that wants to be in this business for a long time.
“One of the things that I've witnessed, particularly since around 2007, is that very little is available.”
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