Jack Daniel’s Big, To Get a Lot BiggerSeptember 3rd, 2013
Brown-Forman announced a major expansion of the Jack Daniel distillery. Here are the details provided by Liza Weisstuch.
You can buy a lot of drinks for a lot of people with $100 million. With the number of people drinking Jack Daniel’s Tennessee Whiskey around the planet growing exponentially, Jack Daniel is footing a bill of over $100 million to make sure there’s enough to go around.
On August 22, Brown-Forman Corporation, the parent company of Jack Daniel, announced the addition of barrel warehouses, stills, and other infrastructure to accommodate increased production of the historic brand. The current facility in Lynchburg, Tennessee stands next to a storied cave, its water source. It’s the same site where Mister Jack founded his distillery, a year after the Civil War ended. After Prohibition, that original facility was rejuvenated, and over the years, more column stills, fermenters, and cookers as whiskey production grew. But with global demand for the product skyrocketing, now is the time for a grand scale construction. The company will break ground in the fall and the build-out is expected to take two years. The new facility will be near the current one.
For 21 straight years, the brand has seen volume growth. The United States remains the single largest market, but it’s the international sales that have really given the numbers a supernova-caliber boost. Since 2004, sales of global cases have increased from about 7.7 million to almost 11 million last year. The whiskey is sold in 160 countries and the international sales make up just over half of the overall numbers.
“When you add that all together, if we don’t have the expansion, there will literally be supply issues,” said John Hayes, senior vice president, managing directorfor Jack Daniel. But that supply is not just going into bottles for Jack Daniel’s iconic Old No. 7. New products have been flowing into the market faster than you can say “Bar-B-Que Caboose Café.”
Tennessee Honey, which launched in the United States in 2011, clocked in at 770,000 cases in 2012. The premium expressions Gentleman Jack and Single Barrel have seen double-digit growth for each of the past two years. Speaking of premium, the brand unveiled Sinatra Select, a product created under licensing agreement with Old Blue Eyes’s family, in January. Bottles fetch upwards of $150 in global travel retailers.
Perhaps building on the success of Tennessee Honey, which plays into the flavored spirit boom, Winter Jack, a low-proof spiced-punch-like product, was created for and launched in the German market in 2011. Hayes, who calls it a “crazy idea” and was “surprised by the success,” says it’s being tested in several American markets right now, and there are plans to roll it out to twenty-some states for the holidays.
Innovation has become a hallmark of the brand, and the new distillery facility offers a way for the company to maintain the velocity of creative output while holding strong to its roots.
“We’re thoughtful about how we expand the brand,” said Hayes. “The facility knows how to make Jack Daniel’s. The more we throw new things at them, the more difficult it can be to keep up with distiller operations. The new distillery can help,” said Hayes, who also noted there’s a rye currently aging. “It’s not as easy to make that in the current operation.”
The international market, however, is clamoring for more American whiskey these days.
“Clearly we’re in a global whiskey renaissance, so this is just the American manifestation of that extraordinary growth,” said Frank Coleman, senior vice president of public affairs for the Distilled Spirits Council of the United States, a trade organization. “A lot of work has gone into the globalization of whiskey. Jack Daniel’s and other great American whiskeys found a home on a global stage.”
U.S. distilled spirits exports have increased significantly over the past decade due, in part, to the lowering of tariff and non-tariff barriers in many foreign markets. That’s only bolstered the growth of American whiskey exports to emerging markets like Russia, India, Vietnam, and Brazil. For last five years, more than half of the American whiskey consumption on earth was outside American borders.
“Things American are very popular everywhere you go around the world. Jack Daniel’s plays well into interests of foreign consumers, in that they’re interested in heritage,” said Coleman. “In some country, they may not like our foreign policy, but they like our products.”