Brown-Forman

Our business philosophy is straightforward. We believe that by investing in our people and brands, and by always trying to improve the quality of our products while also controlling costs, we will succeed in providing premium brands to our consumers and superior returns for our shareholders. We demonstrate this philosophy in a variety of ways across a broad spectrum of activities within our company, including employee training and development, investments in brand-building programs and production improvements, and carefully managing our assets. All of these activities, and many others, are like pieces of a puzzle that, when connected, reveal the entire picture of how our company succeeds. Key Dates: George Garvin Brown and John Forman found the Brown-Forman Distillery, marketing Old Forester bourbon. Prohibition is adopted; Brown-Forman receives a license to sell alcohol for medicinal purposes. Company acquires Lenox, maker of crystal, china, and giftware, as well as Hartmann luggage. Company creates Brown-Forman Beverages Worldwide, a combination of previously separate U.S. and overseas divisions. Brown-Forman Corporation is a diversified producer, marketer, and exporter of alcoholic beverage and consumer products. The full-line distiller markets Jack Daniel's whiskey, Southern Comfort liqueur, Canadian Mist Canadian whiskey, Early Times and Old Forester bourbon, Glenmorangie Scotch, Finlandia vodka, Korbel champagne and brandy, and Fetzer, Bolla, and Sonoma-Cutrer wines. Brown-Forman also produces and markets crystal, china, silverware, giftware, and collectibles under the Lenox, Gorham, Dansk, and Kirk Stieff brands; as well as Hartmann luggage and leather goods. George Garvin Brown and John Forman founded the Brown-Forman Distillery in Louisville, Kentucky, in 1870. At the outset, Brown-Forman marketed Old Forester bourbon. Before Brown and Forman marketed their own brand, bourbon had been sold to taverns in barrels, and bartenders decanted the alcohol into special bottles with the name of the tavern on the label. Brown poured the bourbon into bottles at the distillery, corked and sealed the bottles, labeled them, and warned taverns not to buy the bourbon if the seals were broken. As an additional innovation, all of the labels were handwritten and included a guarantee on the quality of the bourbon. Old Forester sold well as a result of these innovations--but Forman was dubious: in 1902 he sold his interest in the Brown-Forman Distillery because he believed that Brown-Forman's success would diminish as soon as the novelty of packaging began to fade. The Brown family purchased all of Forman's interest in the company. Brown-Forman's bourbon was aged in barrels in large warehouses. At that time, warehouses were not heated, and labels on bourbon bore the expression 'summers old,' a reference to the fact that bourbon can age only in a warm climate. As a result, during the early decades of the 20th century it took many years for the bourbon to be prepared for the market. Consequently, the word 'old' became a common prefix in any brand name of bourbon. Old Forester, produced, marketed, and distributed by Brown-Forman, continued to be very successful under the private ownership of the Brown family, which had no plans to diversify. All the company's advertising concentrated on marketing Old Forester, which it promoted as a product that would restore health: 'Many, many times a day, eminent physicians say, Old Forester will life prolong and make old age hale and strong.' Although this advertising was effective, Prohibition threatened to close Brown-Forman. To prevent this from happening, Brown-Forman went public just prior to Prohibition (1920--33), but the Browns maintained control of the majority of shares. The pre-Prohibition advertising had been valuable: the Brown-Forman company was one of four distillers permitted by the government to sell alcohol for medicinal purposes during Prohibition. The marketing of Old Forester