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Case Study

Brown-Forman: Nothing better in the market

By Benoit F. Leleux, Marta Widz and Marc Chauvet

23 pages

December 2021

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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

Strategy, Family Business, Diversity, Equity, Inclusion, Alcohol, Family, Governance, Succession, Next Generation, Legacy, Branded Product, Marketing, Portfolio Management, Board, Innovation, Environmental Social and Governance, Value, Premiumization, Constitution, Culture, Responsible Consumption, Resilience, Entrepreneurship, Leadership, Good Health, Well-being, Clean Water, Sanitation, Clean Energy, Affordable Energy, Life on Land, Goal Partnerships, Sustainability, Value Creation

Settings

World/global, United States of America
Brown-Forman, Consumer Goods, Wine and Spirits
2020-2021

Type

Field Research

Available Languages

English

Related material

Teaching note

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2021 EFMD Case Writing Competition Award – Family Business

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