Note: This feature ran in a supplement in the latest issue of Beverage Dynamics that celebrated family-owned businesses in the beverage alcohol industry.
“Talking about the Brown family is like pulling at a ball of string,” says Chairman George Garvin Brown IV. “You can unwind it for quite some time.”
The wine and spirits supplier founded by his great-great-grandfather, George Garvin Brown, as J.T.S. Brown and Bro. in 1870, has undergone countless changes over the decades. But one constant has remained – family control.
Close to 160 Brown family “cousins,” or fourth, fifth and sixth generation descendents of the company’s founder, are actively engaged with the shareholder group that holds a controlling stake in the publicly traded company. Garvin Brown IV, who assumed his current role in 2007, is only the latest in a long line of Browns in leadership positions at the company.
Connecting the Past to the Present
George Garvin Brown was born in Kentucky in the 1840s and came to Louisville during the Civil War to complete his high school education. In 1870, he was a pharmaceutical salesman who partnered with his half-brother, John Thompson Street Brown, to start his distilling company and flagship brand Old Forester.
He would later buy out J.T.S. Brown and partner with George Forman, who passed away in 1901. George Garvin Brown purchased Forman’s share of the company from his widow, but kept the name Brown-Forman.
“My great-great-grandfather died a few years before Prohibition was enacted,” Garvin says. “He had a few children, but only his son Owsley was given control of the company. The other siblings were lucky enough to inherit a little something, and poor Owsley inherited a company in an industry about to be illegal.”
One of Owsley’s sisters moved to California, married a doctor, and put her two children through medical school. Garvin met one of those sons, his second cousin twice removed, in San Francisco about 20 years ago.
“He knew George Garvin Brown, who was his grandfather,” Garvin says. “Our founder died a long time before I was born, but I can say I’ve met relatives who knew him, so he’s a wonderful figure to me. He’s a real figure to all of us in the family.”
The Current Generation of Leaders
Unfortunately, Garvin never met the grandfather he’s named after, who died a few months before he was born (which is why he’s named after him, even though Garvin’s not the eldest son in his family).
“I was raised in Montreal after my parents divorced, and I had a portrait of my grandfather hanging in my bedroom,” he says. “It was like a beacon reminding me of what was south of the border. I watched my brother Campbell join the company and saw him traveling all around the world – I was shocked by the opportunities out there. I joined the company at twenty-six because when I was young it was the most successful and exciting business I could imagine.”
Campbell Brown, also raised in Montreal, began his career at Brown-Forman as an intern in the late 1980s. Following his world tour that Garvin described, which included stints in India, the Philippines and Turkey, he came back to Louisville to work on Jack Daniel’s and Southern Comfort in various capacities. In May, he was named president of the Old Forester brand, which will soon open a new distillery in downtown Louisville and is a renewed focus for Brown-Forman.
“It was great to live in so many exotic places,” Campbell says. “It was a dream and I worked for some great people at an exciting time in our industry. You couldn’t ask for a better introduction to international business, Brown-Forman, and consumers in general.”
Fellow fifth-generation family member Robinson Brown followed a similar path to his cousins, after joining the company after a few years working for a beer, wine and spirits wholesaler in Nashville, Tennessee. Brown-Forman holds its family members to a very high standard – out of nearly 160 living family members, only about a dozen are employed at the company. In fact, family members are subjected to increased scrutiny when they’re considered for openings.
“The position that opened up for me was the first of its kind to handle both wine and spirits, since at that time our divisions were separate,” Robinson says. “I went through nine interviews before landing the job as the on-premise manager for Kentucky in 2004.”
Currently, Robinson is North American manager for the Florida market, but it was recently announced that he will be promoted to Middle East and India Territory Director in Dubai.
Managing Family Relationships
One man, who Garvin describes as “a wonderful guy and one of my heroes,” supervised all three Browns during their time at Brown-Forman. That man is Brown-Forman North American Region president, Mike Keyes.
During Campbell’s stint as Southern Comfort U.S. Manager, Garvin’s time as Jack Daniel’s manager in Western Europe and Robinson’s most recent post in Florida, all three men worked directly under Keyes. “I got to see those guys grow up in the business, mature and add tremendous value to Brown-Forman,” he says.
Keyes began in the industry at Stroh Brewery in Detroit, but he saw during the late 80s that the company would likely become a victim to consolidation. Next he went to Hiram Walker in Windsor, Ontario, just before the company was bought by Allied-Lyons.
“I got to see a family-owned company go through a huge change – one that wasn’t positive,” Keyes says. “I stayed there for about four years before going back to a family-run environment, where I am now.”
A Special Home Base
Another factor that brought Keyes to Brown-Forman was listening to Brown family members and employees who told him how special the city of Louisville is.
“I’d never spent a lot of time in Louisville, but now I’ve grown to love it,” he says. “I’ve lived here for the better part of twenty-four years, and to see what the family does in the community makes me proud to be a Brown-Forman employee.”
Campbell and Robinson were born in Louisville, and all three Browns have spent significant time there during their lives. They share Keyes’ love of Kentucky and the city that has served as the company’s headquarters for over a century.
“I think it’s hard to untangle the Brown family from Bourbon, Louisville and Kentucky,” Garvin says. “I’m not sure where each starts and finishes. They all feed into each other – the culture of Louisville as a crossroads with a Midwestern work ethic and southern hospitality seems to work very well for our industry, company and family.”
“I sometimes wonder, if the Brown family were from another city, would Brown-Forman still be a family company?” he adds. “If we were in another industry, would the company still be around? I tend to think the answer to both questions is no. We have a unique combination in Louisville, the beverage alcohol business and the culture of our company, which have allowed us to survive so long.”
Keeping the Family Engaged
You’ll be hard-pressed to find someone connected to Brown-Forman who doesn’t love, respect and revere Owsley Brown II, who led the company from 1993 to 2005.
“He was a wonderful human being and leader,” Keyes says. “He was brilliant, kind and nurturing, and when he passed away it was a huge blow. He’d already retired, but it was a blow to everyone who knew him. I saw the respect that the people of the community and the employees gave him.”
As the extended family grew, Owsley realized that there was a danger of having an ownership group that’s removed from the culture and operations of the company. One way he engaged with the non-employee family members was to invite everyone back to Louisville for an annual shareholders meeting (something Paul Varga has continued as CEO).
“It starts with the kids, who are given coloring books made about the history of the company,” Keyes says. “They make soft drinks in the labs and tour the facility. At an early age they’re being exposed to the company.”
As they get older, teenagers get a deeper dive into the history and production processes at Brown-Forman, and the adults sit down with management to talk about the finances and ask questions about products and plans.
In 2007 when Paul Varga became the third non-Brown to lead the company, he and Garvin devised a way to form even deeper relationships with the extended family.
“We knew we had to double-down on engaging with the fifth generation, which includes about 40 cousins,” Garvin says. “We set up the Brown Forman Family Shareholders Committee and deliberately set up a structure that would formally introduce the family to the business and culture, hoping to fuse people closer to the company rather than letting them drift off into their lives around the world.”
About a dozen committee members attend meetings throughout the year, engaging in topics ranging from industry dynamics and trends to best practices related to family governance of a public company.
“People who work inside the company really appreciate that a dozen Brown family members are volunteering their time to find out about and help the company,” he says. “The employees feel that support from the shareholders and it reinforces the company culture, which we feel is critical.”
Today there are no signs of changing those policies. “Paul has inherited this gift from Owsley, which is the nurturing of the fifth and soon to be sixth generation,” Keyes says. “You don’t see that with a lot of other companies – to the point that Brown-Forman is being studied by other family-owned companies as a best practice leader. It’s shocking to see some of the people who have come here to ask the Brown family members how they do it.”
Taking it Slow
Either because of its long history, the slowed pace of the south or some other reason, Brown-Forman has never rushed its decision-making. The company has acquired brands consistently throughout its history, but rarely jumps on trends or strays from its core portfolio of North American whiskeys. And unlike nearly all of its competitors over the decades, the company has never been for sale.
“We can’t help but cherish such a successful business,” Garvin says. “The strategy of our company for many decades has been quality and long-term brand building. It’s fundamentally paid off with a great return, both measured in conventional Wall Street statistics like shareholder return, as well as personal benefits for the family. We have a single policy, which is to continue to control this company and remain independent.”
As a territory manager responsible for sales, Robinson appreciates the company’s focus on long-term growth rather than quarterly earnings.
“There’s a comfort level here,” he says. “As long as you’re doing the right things for the brands and the business, that’s all we ask of employees. We want them to think more methodically and strategically, focusing on the long-term.”
Brown-Forman’s approach is especially important now, as the whiskey category continues to boom and flavors are beginning to take hold.
“It’s very easy for us not to jump on the bandwagon, instead being very measured about the products we put out,” Keyes says. “We’re creating fantastic handcrafted products and we’re doing great with Tennessee Honey and Fire, but we’re looking at the long-term. We won’t have fifteen flavors – we want to treat these brands with dignity and equity. We won’t saturate the market just because there’s a new trend – other companies will, but Brown-Forman won’t.”
The slow pace works well in the whiskey industry, where product development is measured in years and decades,
not weeks or months.
“In the four years it takes a single bottle to reach the shelf, the whole world will change for electronics companies and Wall Street, a whole generation of buzz words will come and go, but we’ll still be working on that same bottle of whiskey,” Garvin says. “Knowing the patience and long-term planning that’s required in our industry, it’s safe to say we thrive in a family ownership structure. We’re not about quarterly capitalism, we’re about generational capitalism.”
The long-term strategy has gotten Brown-Forman through lean years, and it’s paying off now that consumers have embraced the whiskey category once again.
“Everyone talks about how we’re well positioned now to take advantage of category trends, but I humbly submit it’s just the opposite,” Garvin adds. “We’re not well-positioned for trends; we stick to our guns and create category trends. We didn’t walk away from Tennessee and Kentucky in the 80s and 90s. We kept telling consumers about the values of Lynchburg and broke ground on a new distillery in Woodford County.”
“Those are things that a normal public company wouldn’t have done during the vodka boom, but we did because we had faith in consumers,” he says. “Being a family company got us through those periods and is benefiting us today.”
Looking Toward the Future
“One thing that separates this company from others is that we have a vision of perpetuity,” Keyes says. “The family wants to hand this company down to the next generation – I’ve never heard that elsewhere. I’ve heard people say they want to be number one, or lead a category, but for us the number one vision is perpetuity.”
And what advice does the current leadership team have for its descendants, who will make the decisions whether to remain independent, or to stay in business at all?
“We’re in a good position now with brown spirits, but in twenty-five years that might not be the case,” Garvin says. “When the sixth generation looks back to the fourth and fifth, and even the third, I hope they do what we did – which is to stick to our knitting and keep telling our story.”
Jeremy Nedelka is editor of Beverage Dynamics Magazine. Reach him at JNedelka@epgacceleration.com
