History

Faith in family values: the Brown-Forman story

Martin Betts recounts a tale of a family company that was on the brink of extinction yet became a significant force in the drinks industry.
By Martin Betts
When a company is balancing precariously on the edge of oblivion, ready to freefall towards extinction, you wouldn't expect its saviours to be two young men under the age of 35. Despite the displeasure of investment bankers and the murmurs of discontent from shareholders, the men took control of an enterprise which had seen it's sales spiral downward, profits evaporate and confidence disappear. Remarkably, they turned it around.They may have not been handed the leadership of Brown-Forman in a formal ceremony, but William Lee Lyons Brown and George Garvin Brown II took control of the company and led it into a period of phenomenal growth and expansion. From 1939 onwards the employees looked to the brothers for leadership, as they knew the company had begun to drift and stray from its traditional values of making premium whiskey of the highest quality. From that period of despair the brothers anticipated change and embarked upon a series of takeovers that not only safeguarded the future of the company but enabled it to become a powerful force in the world's spirit market.This transformation is far removed from the company’s inauspicious beginnings in the late 19th century. It was in 1870 that George Garvin Brown, a promising young pharmaceuticals salesman from Louisville, Kentucky, spotted a gap in the market for a whiskey that met “medicinal standards”. With the help of his half-brother and over $5,000 that was both hard saved and tenaciously borrowed, the team sold their distillate in sealed glass bottles instead of by the barrel – the norm at that time. It was a time of frantic activity: the operating name of the outfit changed many times, the business boomed and the original partnership dissolved. The name Brown-Forman, from a later venture between George Garvin Brown and his accountant and friend, George Forman, stuck.The dawn of the 20th century was a time of contrasting emotions and significant events for the company. In 1901 co-founder George Forman died. His stock was purchased by Brown who then had the controlling interest in the company. Three years later Owsley Brown joined his father George in the business. This was a pivotal moment, it was the birth of the traditional family apprenticeship that continues to this day – nearly a century later.It was Owsley, having learnt his trade, who took the helm in 1917 when his father died at the age of 70. This only exacerbated a very difficult period for the company; wartime restrictions on distilling and the growing prohibitionist movement, which would have its day only a few years later, were testing the company's resolve to the limit. Owsley's first years in charge were very demanding to say the least, yet when Prohibition was adopted in 1920 he showed his mettle when he applied for and received a license to bottle whiskey for medicinal purposes. Three years later he was behind Brown-Forman's first acquisition, Early Times, as well as obtaining a government permit to store their stock in a designated warehouse – Owsley was certainly doing his best to secure the company's supply of whiskey in the face of the prohibitionists.Having managed to navigate the Brown-Forman ship through troubled waters and the company’s first share issue in 1933, the investment bankers decided that to protect their investment they would need to appoint a proven businessman as Executive Vice President. As a result Clarence M. Doisseau joined the company and effectively took the reins of Brown-Forman. Doisseau's policy was one of mass production, releasing umpteen bottlings of whiskey exclusively to bars, clubs and anyone who could stump up the dollars. This was a sore point among those who valued premium quality and the old family traditions. Along with an industry wide slump caused by a flood of cheap brands on to the market, there were many figures in the company that pressured Owsley to do something before Brown-Forman was lost forever. It was in the December of 1939 that Owsley Brown informed Doisseau that his contract wasn't to be renewed – a new era had begun.Brothers William and George are credited for the company’s change in fortunes. They had impressive insight, illustrated by their anticipation of World War II and America's involvement, converting an Old Forester plant to produce industrial alcohol for the war effort. Their father, Owsley, passed away in 1952. There was no better tribute to him than the achievement of 1953 – Early Times had become the number one bourbon in the USA. It was now that William and George decided to push on with expansion.Two years later the significant acquisition of the Jack Daniel Distillery was made, a major coup for the company and this helped the company, achieve net sales in 1960 of more than $100 million for the first time. Seven years later Old Bushmills Irish Whiskey and Ambassador Scotch were added to its portfolio.There had been some shocks at the company before but none as great as the death of George Garvin Brown II on March 6th 1969. He died suddenly of a massive heart attack that had followed a short illness. After much mourning the company re-grouped and set about expansion, which has continued apace since Garvin's death.Canadian Mist and Southern Comfort joined the growing portfolio as the company began to change. William Lee Lyons Brown died, Dan Street retired, Robinson S Brown Junior became Chairman and long-time employee William F Lucas became President only to be replaced by William Lee Lyons Brown Jr after his retirement. Shortly after that Owsley Brown Frazier became Vice-Chairman and he was head of the company for approximately 17 years. William Lee Lyons Brown Jr retired in 1993 and was replaced by his younger brother, Owsley Brown II, who assumed the chairmanship.Thanks to George Garvin Brown and the efforts of Owsley Brown, and his sons, Brown-Forman consistently reports record earnings. It still relies on descendants of George and Owsley, with William Lee Lyons Brown III and the other members of the next generation waiting in the wings. In the unlikely event that they ever experience a financial slump again there will be Browns to turn things around.