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Introduction by: Peter Marshall

This week on we are delighted to feature another major profile on one of the world’s leading spirits companies – Brown-Forman. The company has enjoyed considerable success in 2023 and I chatted recently with David Rodiek and  hope that the following  interview provides real insight and defines where the company currently stands on its products and key issues relevant to Travel Retail.

Peter Marshall (PM): David, welcome back to Let’s start our conversation with American Single Malt. It’s a category that has lots of energy behind it and, frankly, Brown-Forman’s iteration is quite outstanding with Jack Daniel’s now playing in this space. Tell us about how the brand is performing since it was presented last year in Cannes.

David Rodiek (DR):  Sure, Peter. Let’s begin with Jack Daniel’s, which is not only a renowned brand but also the largest premium spirits brand globally in terms of volume. According to the International Wine and Spirits Record (IWSR) in 2022, Jack Daniel’s holds that prestigious title. In fiscal 2023, over 15 million 9-litre cases of Jack Daniel’s Tennessee Whiskey were sold across more than 170 countries worldwide.

This is an incredible performance and made Jack Daniel’s one of the major contributors to reported net sales growth for the year. The exciting part is that there’s still a significant opportunity for the brand’s growth.To further enhance the appeal of the Jack Daniel’s family of brands, we’ve been focusing on premiumization and strengthening our whiskey credentials. Here, we introduced the exclusive ultra-premium expression Jack Daniel’s American Single Malt, available at Global Travel Retail (GTR). While it’s a bit early to discuss specific numbers, I must say that the launch has been nothing short of spectacular.

PM: You’ve also moved in a big way into pop-ups, haven’t you?

DR: Yes. In September we initiated some impressive pop-up events to present Jack Daniel’s American Single Malt at key international airports. For instance, we had a pop-up at London Heathrow Terminal 5 (which actually ran until October 22nd) and another at Changi Airport in Singapore Terminal 1 (which finished on October 12th). These activations are not just about showcasing our products, they’re a testament to our brand’s commitment to delivering exceptional experiences to our global audience.

Travellers are increasingly interested in expanding their whiskey journey while on the go, and Jack Daniel’s American Single Malt offers them a new, ultra-premium expression to discover. These super premium products, along with our new Jack Daniel’s & Coca-Cola ready-to-drink (RTD) offerings, provide both loyal customers and newcomers with the perfect opportunity to explore and savour the diverse offerings within the Jack Daniel’s family of brands.

PM: Are there any plans to press further into American single malts – either through NPD or by acquisition?

DR: Well, let’s begin by discussing our efforts to integrate Jack Daniel’s American Single Malt into our Global Travel Retail (GTR) portfolio and bring all the exciting activations to life. We’re planning over 40 activations at airports across the globe, and these will provide an opportunity for an estimated 13 million shoppers to engage with our brand. We’ll be offering around 60,000 tastings.

As for any further plans and developments, you can count on us to keep you well-informed.

PM: Excellent. Now Woodford Reserve is another great brand of yours. Of course it is now a change for the brand with a new master distiller in place. There is clearly a lot of scope and opportunities for the brand. What are your current plans for it in GTR?

DR: Over the past two decades, Brown-Forman has been on a remarkable journey, significantly elevating our portfolio. We’ve achieved this by focusing on premium and super-premium brands through a combination of strategic acquisitions, divestitures, and establishing new relationships that strengthen our position in the market.

As a result of our efforts, we’re proud to announce that we now own one of the top five brands globally in four high-growth categories.*

PM: The brand Woodford Reserve has experienced remarkable growth, hasn’t it?

DR: Indeed. Woodford Reserve has seen exceptional growth, with a remarkable 26% increase in reported net sales during fiscal 2023. Today, it holds the distinguished title of being the number-one super-premium American whiskey brand in the world, both in terms of volume and value, based on data from IWSR in 2022.

The success of Woodford Reserve extends beyond just numbers. Our Woodford Reserve Sensory Lounges have been nothing short of a hit, providing travellers with an immersive and delightful experience. As you know, and in recognition of our dedication to delivering outstanding experiences, we were recently honoured with two prestigious Global Travel Retail marketing awards. The “Woodford Reserve Sensory Lounge” received a Gold Medal in the “Marketing Activation of the Year” category at the Drinks International Travel Retail Awards 2023.  It was also the Winner in the “Best Retailer & Supplier Promotion” category at the Travel Retail Awards 2023.

PM: Let’s move onto Tequila. You’ve recently announced an expansion at Herradura. Just how big do you think this category can get and what do you think might be holding it back in GTR?

DR: Well, first I’d like to emphasise that Brown-Forman holds a prominent position, owning one of the top five brands globally in four strong growing categories.* Our super-premium tequila Herradura is one of them.

Tequila, in particular, is catching the eye of consumers as the most attractive and fastest-growing category* within the full-strength total distilled spirits market. We’ve observed a significant shift in consumer preferences towards more premium products within this category.

To address this growing demand, we’ve taken a proactive step. We recently announced a substantial $200 million capital investment, aimed at expanding our tequila-making capacity in Mexico.

Herradura, our super-premium tequila, isn’t just an exciting opportunity for the spirits market in general. It’s also perfectly positioned to cater to the Global Travel Retail (GTR) segment, aligning perfectly with the premiumization trend that’s gaining momentum.

PM:  Now I think it is fair to say that Brown-Forman hasn’t been particularly vocal on its environmental and social sustainability efforts compared to other players in the sector. Why is this? Is there anything you’d like to share on this, any work or initiatives that you’d like to draw attention to?

DR: Good question, Peter. In fiscal 2021, the Brown-Forman Corporation embarked on an exciting journey by establishing a new Environmental Sustainability Strategy that will guide our efforts until 2030. This strategy aims to align our practices with the best industry standards and the most current climate science. Notably, it goes beyond just our owned operations and extends to our supply chain, which is where a significant portion of our environmental footprint resides. With this evolving strategy, we have a well-defined roadmap for progress over the next quarter-century.

Moving forward to fiscal 2023, we’ve taken a multifaceted approach to meet our sustainability targets.* Our primary focus has been on reducing greenhouse gas (GHG) emissions, and we’ve made great strides in this direction. We’ve prioritised the use of renewable energy sources, reduced the weight of our packaging and continued to source recycled glass for our bottles. These practices not only limit GHG emissions but also contribute to responsible water stewardship in the fields from which we source.

For example, one of our key goals is to halve GHG emissions by 2030, and we’ve already made a substantial 14.8% reduction in this regard. We’re also committed to using 100% renewable electricity by 2030, and we’re at an impressive 88% renewable usage as of fiscal 2023.

Achieving water balance for key watersheds by 2030 is another critical goal, and we’ve already put water risk measurement systems in place. In terms of engaging with 100% of our direct farmers on regenerative agricultural practices by 2025, we’re making great progress, with 72% of them already actively engaged.

PM: That’s a very important step. What about packaging?

DR: We are determined to offer 100% recyclable and reusable primary packaging by 2030 and to illustrate this commitment we have introduced new initiatives to expand the use of post-consumer recycled (PCR) content and launched a 50ml bottle of Jack Daniel’s Tennessee Whiskey made with 100% post-consumer recycled plastic. This initiative is just the beginning. We anticipate extending the use of 100% PCR plastic to other products and package formats in the future. As of Fall 2023, all orders placed for Jack Daniels Tennessee Whiskey 50ml for U.S.-based airlines will use our new package with 100% (PCR) plastic. This change is expected to reduce the annual use of first-use plastic material, potentially by up to 220 tons, across all U.S. domestic transportation sales of Jack Daniel’s Tennessee Whiskey 50mls**. Additionally, the new airline-specific packaging will lead to an estimated greenhouse gas (GHG) emissions reduction of 33% for the primary package when compared to the existing one.***

Importantly, all whisk(e)y brands in the Brown-Forman portfolio or their eponymous distilleries have already implemented far-reaching measures to achieve sustainability goals. At the Jack Daniel Distillery, for instance, operations are impressively zero waste (<1% waste) to landfill, and various elements of production are used resourcefully, such as using sugar maple charcoal as smoking pellets for barbecue and repurposing used barrels. Furthermore, used barrels go to other producers for ageing alcoholic products or are used to make rustic furniture.

PM: What about sustainable energy?

DR: We are investing in sustainable energy with the Green Invest Program, which will provide the Jack Daniel Distillery with 20 megawatts of solar energy when it is operational in 2026 which accounts for about 75% of electrical consumption at Jack Daniel’s.

We also embarked on a partnership with the University of Tennessee starting in 1998 on a long-term Tree Improvement Program to research and study white oak and sugar maple in order to ensure we have healthy supplies for the future.

As an example for our sustainability engagement in Europe, I would also like to highlight our Scotch Malts Distilleries Benriach, Glenglassaugh and The GlenDronach Distillery. We are members of the Scotch Whisky Association, and our sustainability efforts are aligned with and support the goals outlined in the Scotch Whisky Industry Sustainability Strategy 2040.

This includes tackling climate change, using water responsibly, caring for the land and moving to a circular economy. All electricity for our single malt distilleries has been from renewable sources since 2022.

Also, the redesign of the Benriach package two years ago included an almost 9% reduction in weight of our 700ml glass bottle, and the current bottle uses about 31% recycled content.

PM: These are significantly impressive actions. What else is there?

DR: The most recent initiative to be put in place is a partnership with Ylem Energy to develop a 630kW solar array that delivers 516,000 KWp of clean, renewable energy yearly at the producer’s Benriach Bond facility in Edinburgh, Scotland.

The partnership will progress us towards our target of sourcing 100% of electricity from renewable sources by 2030.

The comparatively young Slane Distillery also deserves special mention for its comprehensive sustainability plan. Their efforts include a comprehensive sustainability concept taking into account ecological, social and economic aspects. Energy recovery, reduced water consumption, and the capacity for onsite energy generation have been embedded into its state-of-the-art distillery design, while considering how it interacts with and supports its surrounding natural environment and the local community.

For instance, the distillery has implemented a rain catchment system that collects and stores rainwater from the roofs of its buildings. This collected rainwater is then treated and used for various processes, reducing the need to draw water from the River Boyne. Water efficiency efforts to enhance water efficiency have been remarkable, leading to a substantial 32% reduction in water consumption per litre of whisky produced between 2021 and 2022.

In their quest to reduce energy consumption, Slane Distillery made significant progress by reducing the energy required to produce one litre of whiskey by 24% from 2021 to 2022. This achievement reflects their attention to detail in optimising production processes and increasing production volume.

Back in 2019, the distillery also planted an orchard of heritage varieties of fruit trees, sourced from Irish Seedsavers, which now provides an on-site source of fruit, juice, and garnishes for their bartending program. Slane Distillery has partnered with forest, ecology, and environment experts, Veon, with the support of Brown-Forman and the Irish Department of Agriculture, to plant 10,000 native trees on 6.65 hectares of the Slane Castle estate. This is part of an ongoing 10-year forestry management program that will see the removal of invasive species from the Slane Castle estate woodlands and replanting with native species, in addition to new plantings of hedgerows and woodland.

Collaboration with the local community is a central part of Slane Distillery’s comprehensive sustainability concept, which extends beyond those mentioned. It’s worth noting that these sustainability efforts are just a glimpse of the many engagements and initiatives across our various production facilities, such as Casa Herradura, Chambord, Woodford Reserve, and Old Forester.

Brown-Forman – 2021 Sustainability Target Launch – Climate Action

PM:  Moving on, but in an aligned question that you touched on earlier, the move to use post-consumer recycled plastic bottles for Jack Daniel’s inflight bottles is interesting. The question is: why start with inflight?DR: This started in Fall 2023, where all orders placed for Jack Daniel’s Tennessee Whiskey 50ml for U.S.-based airlines will be replaced with 100% post-consumer recycled (PCR) plastic.

It’s important to state that our endeavour to increase the PCR content of our packaging doesn’t stop here. We have ambitious plans to extend the use of 100% PCR plastic to other products and package formats in the future. The shift in packaging is projected to reduce the annual use of first-use plastic material by up to 220 tons across all domestic transportation sales of Jack Daniel’s Tennessee Whiskey 50mls within the United States.

The new airline-specific packaging is estimated to result in a remarkable 33% reduction in greenhouse gas (GHG) emissions for the primary package when compared to the existing one.

This bottle initiative is just one facet of Brown-Forman’s broader commitments to environmental responsibility. It showcases our ongoing efforts to reduce our environmental footprint and promote a circular economy.

PM: So what are the barriers to rolling out the concept more widely and what would be the timescale for doing so?

DR: We’re making excellent progress in meeting or exceeding all our set global as well as Global Travel Retail (GTR) targets under our sustainability strategy.

PM: This is a subject I am sure we will return to. But, moving on, another success story of yours is your RTD collaboration with Coca-Cola. What’s the latest here?

DR: The global agreement between the two brands is a strategic leap that holds immense potential for both brands. This agreement is a significant step towards expanding our geographic footprint, enhancing brand awareness, and ultimately, boosting our revenues.

The kick-off for our new product began in Mexico during the fall of 2022. Since then, we’ve seen it make remarkable strides. It made its debut in the United States at the end of March 2023 and has also been introduced to markets in the UK, France, Spain, Poland, Japan, the Philippines, and most recently, Germany. And more countries will soon follow.

PM: So what can the industry expect from GTR Brown-Forman in 2024?

DR: Brown-Forman GTR is on a promising path, with a strong growth trajectory that we’re excited to see unfold. One of the key drivers of our success has been our commitment to creating extraordinary and exclusive traveller experiences – like the Jack Daniel’s American Single Malt pop up stores and the Woodford Reserve Sensory Lounges. Just keep an eye on what we have in store; there are more exciting initiatives to come.

And we’re not just focused on growth and experiences. Sustainability is at the core of our values. We’re proud to say that our GTR channel is leading the way, with consumer and customer facing initiatives.

PM: Finally David, and this is a question I always ask. If there are three things you want to communicate to the business right now, what would they be?

DR: As we move forward in this post-pandemic era, cherishing innovation is a pivotal step in enhancing traveller experiences.

Secondly, adapting to changes in consumer behaviours, so ensuring a vibrant and resilient future for the global travel retail business.

Finally, embracing sustainability is a huge challenge that the entire GTR industry must face and answer collectively.

Peter Marshall

Founder: Arts
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