Thursday, May 6, 2021

What Company Makes the Most Money from Bourbon? The Answer Might Surprise You (But Probably Won't)

We are about 20 years into the 'bourbon boom' and craft distilling renaissance. Much has been said in that time about all the new brands and new producers who, according to some, are bound to replace the tired, old legacies. How is that going? Who holds the largest dollar share of the bourbon category today? 

According to Wine and Spirits Daily, nearly one-third of all the money spent on bourbon, rye and other American-made straight whiskey products is spent on this company's brands.

It is Brown-Forman. B-F holds the largest dollar share of the bourbon category at 28%.

Brown-Forman's lead dog, of course, is Jack Daniel's. Woodford Reserve and Old Forester also contribute. The other big contributor to the company's bottom line is Herradura Tequila. 

And Brown-Forman is about as legacy as legacy gets, founded in 1870 to sell bourbon, it is publicly owned but still controlled by its founding family. 

How do they do it? I worked for a Brown-Forman marketing agency in the early-to-mid 80s. If they couldn't get a brand to at least #2 in its segment (sometimes narrowly defined), they sold or killed it. They also had very high return-on-investment requirements. They made an exception for Old Forester because it was the company flagship, but otherwise they were ruthless. 

That was a long time ago but speaking as a close observer of the industry, I don't think their philosophy has changed much. 

I would love to tell you how the other 72 percent of the bourbon category breaks down but I'm not willing to spend $545 to get past the Wine & Spirit's paywall and I'm not sure they know precisely anyway, because two of the biggest producers, Heaven Hill and Sazerac, are private companies that don't report results.

But based on what we peasants can see, the Bourbon Big Four (Beam Suntory is the other one) all seem to have so far weathered the craft distilling threat pretty successfully.


Wade said...

In before someone tries to claim JD isn't bourbon. It is.

David said...

Well, according to Jack Daniel's it isn't. So who would know better?

Sam Komlenic said...

I'll say it again: If it says bourbon on the label, it's bourbon. If it doesn't, it isn't, regardless of any hair-splitting, technical or otherwise. And yes, I understand the technical side of the argument.

Chuck Cowdery said...

The issue isn't so much technical as it is a business issue. Not only is Tennessee whiskey lumped in with bourbon, so are rye whiskey, corn whiskey, wheat whiskey, etc. And because of TTB laxity, we have products that say 'bourbon' on the label that really aren't, so there's that too.

Sam Komlenic said...

Point taken!