Case Study

Brown-Forman: Nothing better in the market

23 pages
December 2021
Reference: IMD-7-2259

London, UK, July 2020. G. Garvin Brown IV, the chairman of Brown-Forman Corporation and 5th generation family shareholder, was preparing to celebrate the firm’s 150th anniversary. Despite its current global footprint, a turnover in excess of $3.3 billion and over 4,800 employees worldwide, Brown-Forman had remained in Louisville, Kentucky, close to the Old Forester Distillery, the founding brands’ Pre-Prohibition headquarters (1882-1919), on Louisville’s historic Main Street, also known as “Whiskey Row”. COVID-19, however, had ruined the party, forcing the family to cancel the celebrations. Every family member had received their 150th Anniversary bottles of the limited-edition bourbon, taken from 6 barrels aged for 150 months, as well as a recently published book documenting the amazing history of Brown-Forman through photos, illustrations and artifacts. The pandemic would have a dramatic impact on economies around the world, affecting not only employees’ lives but also the livelihoods of partners in the broader hospitality industry. The publicly listed, family-controlled company had weathered worse storms in the past, including Prohibition, which had tested the firm’s resilience. Having a long-term-focused, engaged stockholder base and a strong governance system were tremendous advantages in such situations, especially when selling aged products with time-tested brands. Together with the two former CEOs and the board, Brown had painstakingly put together solid company and family governance structures and processes and carefully rebalanced the portfolio in a bid to mitigate the impact of downturns. Still, Garvin could not help wondering how well the delicately crafted system would hold under this real-world “stress test.”

Learning Objective

The case focuses on entrepreneurial, family business and sustainability issues, such as

  • Re-engineering a product portfolio towards premiumization;
  • Developing a comprehensive family, ownership and corporate governance;
  • Developing mechanisms to ensure the sustainability of a unique firm culture and values and an ongoing commitment to a strong sustainability agenda;
  • Developing management and ownership succession.
Keywords
Diversity, Equity, Inclusion, Alcohol, Family, Succession, Next Generation, Legacy, Branded Product, Portfolio Management, Board, Value, Premiumization, Constitution, Culture, Responsible Consumption, Resilience, Good Health, Well-being, Clean Water, Sanitation, Clean Energy​, Affordable Energy​, Life on Land, Goal Partnerships, Value Creation
Settings
Global, United States of America
Brown-Forman, Consumer Goods, Wine and Spirits
2020-2021
Type
Field Research
Copyright
© 2021
Available Languages
English
Related material
Teaching note
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