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Interview: Mike Keyes Of Brown-Forman On American Whiskey’s Renaissance

April 24, 2012

The resurgence of consumer interest in American whiskey has created new opportunities for spirits marketers in the United States. Shanken News Daily recently interviewed Mike Keyes, president of Brown-Forman’s North American Region, to discuss the performance of Brown-Forman’s whiskey portfolio and more.

SND: How did Jack Daniel’s perform last year, and what are your plans for maximizing its opportunities?

Keyes: Jack grew slightly in calendar 2011, but with strong acceleration over the last few months. There were a couple of reasons for that. One, the economic environment is improving, and Jack is a bellwether for the economy because its consumer demographic is so broad. It’s very popular among young adults, middle-aged and older consumers, both blue-collar and white-collar. Five years ago, we saw Jack slowing down a bit before the recession, and it gave us some pause and perhaps some insight into what was coming. But it’s also a bellwether the other way. Jack has a very solid on-premise business. Over the last four years, the brand has performed well off-premise but has slowed down, like everything else, on-premise. We see consumer confidence growing a bit and the job reports improving, and so our on-premise business is getting better.

SND: You’ve had great success with Jack Daniel’s Tennessee Honey, which debuted in April 2011. Last year it hit 320,000 cases in the U.S market, at $22 a 750-ml. What is it about Tennessee Honey’s flavor profile that appeals to consumers?

Keyes: People want to be part of the Jack Daniel’s franchise, and Tennessee Honey offers something for those who aren’t necessarily whiskey connoisseurs. It’s more accessible to people who like Jack Daniel’s but perhaps haven’t yet developed a taste for it. I follow Jack Daniel’s on Twitter, and Tennessee Honey has done unbelievably well in what we call the general market. It has performed well in the off-premise while attracting female, African-American and Hispanic-American consumers. When you launch a new brand and spend significant money supporting it, you do worry about cannibalizing your core business. But instead, it’s brought more people into the franchise and has broadened our ability to speak to consumers.

SND: Gentleman Jack has performed well, even in tough economic times. How do you account for its success?

Keyes: Gentleman Jack has grown every year since its introduction in the late ’90s. About four years ago, we gave it a new, more relevant package. Gentleman Jack goes through charcoal-mellowing twice, so it’s very accessible—a softer, more refined Jack Daniel’s. While Gentleman Jack does more business in the off-premise, there’s a big opportunity on-premise. That’s true for most of our portfolio. We have 10-11 brands retailing at over $20 a bottle, so most of our business is in the premium-plus category. As the on-premise strengthens, there should be increased opportunity for us.

SND: Woodford Reserve has shown 15%-20% growth each year since its launch in 2000. What’s the potential?

Keyes: We have every faith that it will continue to grow and even accelerate. We’re building for growth. In February we released a new Woodford Reserve product called Double Oaked, which is doing very well. It’s a product that starts out as Woodford Reserve but is then put back into barrels with deeper toast, and emerges with a deeper flavor profile. Woodford is in the high $20 to low $30 range, while Double Oaked retails at just under $50.

SND: Other whiskies in your portfolio have been experiencing difficulties, like Canadian Mist, Old Forester and Early Times. What are your plans for them?

Keyes: You’ll see some innovation on Canadian Mist. Last year, we introduced a super-premium Canadian whisky called Collingwood that’s doing well in markets including Texas and Louisiana. Early Times is a great product that’s been lost for a while, certainly with young adult consumers. We’ve got some introductions coming up with flavored products. Throughout our whiskey portfolio, you’ll also see more innovation in regard to flavors and different styles. Old Forester is our founding brand. It’s only big in a few markets around the country. Of course we’d like to grow it, but more importantly, we’d like to maintain it as a very premium product. The cocktail craze has inspired a love of the past, and that’s an opportunity for Old Forester. But we won’t allow the brand to be diminished by competing on price. It’s too important to our history.

Brown-Forman’s Leading Whiskies in the US
(thousands of nine-liter case depletions)
Percent Change
Brand 2009 2010 2011 2009-2010 2010-2011
Jack Daniel’s 4,680 4,645 4,660 -0.7% 0.3%
Canadian Mist* 1,795 1,715 1,625 -4.5% -5.2%
Early Times 655 615 570 -6.1% -7.3%
Jack Daniel’s Tennesee Honey 320 +++
Gentleman Jack 235 240 255 2.1% 6.3%
Woodford Reserve 115 125 145 8.7% 16.0%
Old Forester 100 95 90 -5.0% -5.3%
Jack Daniel’s Single Barrel 45 45 50 11.1%
*2011 includes 8,000 cases of Black Diamond 

Source: IMPACT DATABANK

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