Posted: Dec 12, 2018
LOUISVILLE, Ky. WDRB – Louisville-based spirits giant Brown-Forman Corp. doesn’t plan to get into the marijuana business anytime soon, incoming CEO Lawson Whiting told investment analysts on Wednesday.
Responding to a question at the company’s Investor Day in New York, Whiting said the pot business is “very different than premium spirits,” and that Brown-Forman has no leg up compared to other companies, such as drug makers, that might be interested in it.
“We have challenged ourselves to say, ‘Where are the synergies? Why can we win in that space?’” Lawson said. “…Our competitive advantage in that space -- I’ll be honest -- is not much … I don’t think you are going to see us move too far forward.”
Analysts have been interested in whether beverage companies like Brown-Forman --- the maker of Jack Daniels Tennessee Whiskey – could find a new market in marijuana if more states, or the U.S. as a whole, eventually legalizes its recreational use.
Constellation Brands Inc., the maker of Corona beer, earlier this year invested $4 billion in Canadian marijuana grower Canopy Growth Corp. and is looking to develop nonalcoholic, cannabis-infused beverages for Canada and other legal markets, the Wall Street Journal reported.
Brown-Forman has listed marijuana legalization as a potential “risk” to its liquor business for years in the footnotes of its regulatory reports.
Company executives spent hours Wednesday making the case that Brown-Forman has plenty of room for growth in its core businesses, primarily Jack Daniels (which executives called the “beating heart” of the company), Woodford Reserve bourbon and El Jimador and Herradura tequila.
For all the growth in bourbon over the last decade, American whiskey consumption is still less than half its 1970's peak, according to statistics Brown-Forman presented Wednesday.
Brown-Forman has a bright future ahead “if we can get anywhere near those numbers,” Whiting said.
By Chris Otts
December 12, 2018
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