Brown-Forman has purchased Scotch whisky company BenRiach

Brown-Forman has purchased Scotch whisky company BenRiach

Yesterday's acquisition of single malt Scotch whisky producer The BenRiach Distillery Co is the latest signpost on Brown-Forman's path into premium spirits territory. 

The Jack Daniel's owner started 2016 with the divestment of Southern Comfort and Tuaca to Sazerac, in a deal worth US$543.5m. At the time, the company said the move was part of its "evolving portfolio strategy".  It was also part of continued efforts to move its portfolio up the premium ladder and turn the 'heritage and authenticity' dial up a notch. 

Southern Comfort had been battling sales declines right up to the end of its Brown-Forman ownership. In H1 results, released in December, the brand posted a 7% volumes slip on an 11% reported sales drop. For today's heritage-hungry consumers, by which we mean Millennials, Brown-Forman was no longer the right owner for the brand. Sazerac, however, might just be - both the product and the company hail from New Orleans: If anyone can mine the brand's provenance, it's Sazerac.

Spirits in the US - How are the big players performing? - Click here for an analysis

Conversely, the star performer in Brown-Forman's H1 was a premium American whiskey brand: Woodford Reserve posted volumes and sales growth in the six months of 36% and 29%, respectively. The trend continued in the YTDs, released last month, serving to emphasise to the group the potential that it's higher-end stable can offer.

Then, earlier this month, Brown-Forman unveiled its first new Bourbon brand in 20 years. Coopers' Craft not only emphasises the coopers' role in the making of whiskey, it also champions the company's formidable presence in the world of cask production - it has operated a cooperage since 1945. Coopers' Craft ticks a lot of boxes for Brown-Forman: It is an American whiskey - a segment that is in very healthy growth - it is a premium brand - with an RSP of US$28.99 per 75cl - and it comes with a story.

This is a brand with 'Millennial consumer' written all over it.

Brown-Forman's entry into the Irish whiskey category last year, through its acquisition of Slane Castle Irish Whiskey, is also heavily-gilded in all things authentic. At the ground-breaking ceremony last September, chief brands & strategy officer Lawson Whiting said Millennial consumers are "looking for real stories and craft". With its close links to music, thanks to the huge concerts held in the grounds, Slane Castle could quite easily go on evoke the same cult status as Jack Daniel's.

This week's transaction, then, is the latest step on Brown-Forman's path to growth. BenRiach's recent performance bodes well: In July last year, the company posted a 24% jump in pre-tax profits for the 12 months of 2014

Brown-Forman's march on premium whisk(e)y, then, looks more like a jolly skip... all the way to the bank.