US: Small companies have forced us to innovate - Brown-Forman CEO

By | 18 December 2012

Brown-Forman has innovated to keep up with smaller firms taking market share

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.”

Expert analysis

The Future of the Spirits Market in the US, to 2016

Future of the Spirits Market in the US, to 2016 is the result of Canadean’s extensive market research covering the Spirits market in the US.

Sectors: Mergers & acquisitions, Spirits

Companies: Brown-Forman, Jack Daniel’s, Diageo, Whyte & Mackay, United Spirits

View next/previous articles

Currently reading -

US: Small companies have forced us to innovate - Brown-Forman CEO

There are currently no comments on this article

Be the first to comment on this article

Related research

Global market review of rum – forecasts to 2017

For a category that sells around 146.4m cases annually, it may seem unusual to characterise Rum as a relatively unexploited opportunity. Indeed it is already a diverse and eclectic category with a wide geographic spread but there are a number of regi...

The world’s top-performing spirits brands

This is the second edition of our popular ranking of the world's leading spirits brands....

Wine

This report analyzes the worldwide markets for Wine in Million Litres. It includes all wine categories, still, (red, white and rose), sparkling, fortified, vermouth, non-grape wine, wine coolers and ice wine. The report provides separate comprehensiv...

Related articles

EUROPE: West Indies rum body launches EUR5m provenance push

The West Indies Rum & Spirits Producers Association (WIRSPA) is to spend EUR5m (US$6.7m) on a fresh campaign backing the trade body's provenance marque across Europe.

just For Subscribers - The week in drinks

Here are the ten most viewed, subscriber-only items on just-drinks this week:

Comment - Britvic Needs a Merger, not a Gamble

What a difference four months makes for Britvic chairman Gerald Corbett.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page