Louisville, KY, June 27, 2013 – Brown-Forman Corporation (NYSE: BFA, BFB) announced today that it intends to expand the Woodford Reserve Distillery to meet expected growing global demand for its super premium Woodford Reserve Kentucky Bourbon. The more than $35 million investment includes the addition of three new warehouses capable of housing more than 165,000 barrels of bourbon.
“Brown-Forman is proud to expand the Woodford Reserve Distillery, America’s oldest working distillery, located in the heart of Kentucky’s Bluegrass Region,” said Chris Morris, Master Distiller, Woodford Reserve. “The world’s growing taste for premium North American whiskey is driving record exports of these U.S. spirits. Woodford Reserve experienced a record volume of nearly 250,000 nine liter cases and grew net sales by 28% globally in fiscal 2013. We believe strong consumer interest in bourbon will continue and we’re expanding our production capacity in an effort to meet this demand.”
The expansion of the Woodford Reserve Distillery, located off McCracken Pike in Versailles, Kentucky, includes plans for the addition of three bourbon maturation warehouses, new stills, expansion of the existing bottling line, and improvements to increase general efficiency and productivity. It is projected to add 15 new jobs over the life of the project.
The three new pot stills, to be built as need dictates, will be made of copper and housed in the existing distillation building. Woodford Reserve Distillery was the first distillery to use copper pot stills and the triple distillation process to handcraft bourbon today.
To encourage the investment and job growth in Versailles, the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved the company for tax incentives up to $2.5 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets. KEDFA also approved Brown-Forman for tax benefits up to $500,000 through the Kentucky Enterprise Initiative Act, which allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing equipment.
Brown-Forman opened the Woodford Reserve Distillery and introduced Woodford Reserve Kentucky Bourbon in 1996. Since Woodford Reserve’s introduction, it has experienced double-digit growth rates each year.
For more than 140 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine quality beverage alcohol brands, including Jack Daniel’s Tennessee Whiskey, Southern Comfort, Finlandia, Jack Daniel’s & Cola, Canadian Mist, Korbel, Gentleman Jack, el Jimador, Herradura, Sonoma-Cutrer, Chambord, New Mix, Tuaca, and Woodford Reserve. Brown-Forman’s brands are supported by nearly 4,000 employees and sold in approximately 160 countries worldwide. For more information about the company, please visit https://www.brown-forman.com/.
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This press release contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “plan,” “potential,” “project,” “pursue,” “see,” “will,” “will continue,” and similar words identify forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. These risks and other factors include, but are not limited to:
• Unfavorable global or regional economic conditions, and related low consumer confidence, high unemployment, weak credit or capital markets, sovereign debt defaults, sequestrations, austerity measures, higher interest rates, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations
• Risks associated with being a U.S.-based company with global operations, including political or civil unrest; local labor policies and conditions; protectionist trade policies; compliance with local trade practices and other regulations, including anti-corruption laws; terrorism; and health pandemics
• Fluctuations in foreign currency exchange rates
• Changes in laws, regulations or policies – especially those that affect the production, importation, marketing, sale or consumption of our beverage alcohol products
• Tax rate changes (including excise, sales, VAT, tariffs, duties, corporate, individual income, dividends, capital gains) or changes in related reserves, changes in tax rules (e.g., LIFO, foreign income deferral, U.S. manufacturing and other deductions) or accounting standards, and the unpredictability and suddenness with which they can occur
• Dependence upon the continued growth of the Jack Daniel’s family of brands
• Changes in consumer preferences, consumption or purchase patterns – particularly away from brown spirits, our premium products, or spirits generally, and our ability to anticipate and react to them; decline in the social acceptability of beverage alcohol products in significant markets; bar, restaurant, travel or other on-premise declines
• Production facility, aging warehouse or supply chain disruption; imprecision in supply/demand forecasting
• Higher costs, lower quality or unavailability of energy, input materials or finished goods
• Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, for result in implementation-related or higher fixed costs
• Inventory fluctuations in our products by distributors, wholesalers, or retailers
• Competitors’ consolidation or other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing or free goods), marketing, category expansion, product introductions, entry or expansion in our geographic markets or distribution networks
• Risks associated with acquisitions, dispositions, business partnerships or investments – such as acquisition integration, or termination difficulties or costs, or impairment in recorded value
• Insufficient protection of our intellectual property rights
• Product counterfeiting, tampering, or recall, or product quality issues
• Significant legal disputes and proceedings; government investigations (particularly of industry or company business, trade or marketing practices)
• Failure or breach of key information technology systems
• Negative publicity related to our company, brands, marketing, personnel, operations, business performance or prospects
• Business disruption, decline or costs related to organizational changes, reductions in workforce or other cost-cutting measures, or our failure to attract or retain key executive or employee talent
For further information on these and other risks, please refer to the “Risk Factors” section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.