Brown-Forman (BF-B) manufactures and sells alcoholic beverages globally. The business’ flagship brand is Jack Daniels.

Brown-Forman also own Sonoma wines, Korbel Champagne, Chambord, Tuaca, Southern Comfort, El Jimador, and Finlandia Vodka.  The image below shows the company’s alcohol brands:

Source:  Brown-Forman Back to School Presentation

Brown-Forman has increased its dividend payments for 31 consecutive years. The company was founded in 1870 in Kentucky. Brown-Forman has grown significantly since that time – today it has a market cap of $22.8 billion

The company has stayed true to its roots. To this day, the Brown family still controls about 70% of the company’s voting shares.

Competitive Advantage

Brown-Forman’s competitive advantage comes from its brands. The Jack Daniels brand in particular has the strongest recognition.

The company has spent over $400 million a year on advertising in each of its last 3 fiscal years to support its brands. This comes to around 14% of sales spent on advertising – one of the highest numbers of any Dividend Aristocrat on a revenue percentage basis.

Brown-Forman’s massive advertising spending has caused a global resurgence in whiskey consumption. Fourth generation Brown family member and current Chairman of the board at Brown-Forman Gavin Brown IV had this to say about the company’s advertising in its 2014 annual report:

“Were it not for Brown-Forman’s focus on American whiskey, and in particular, its home states of Kentucky and Tennessee, I have no doubt that the industry would not be seeing this resurgence.  It just seems difficult to imagine that there would be a global demand for American whiskey had Brown-Forman not painstakingly grown the Jack Daniel’s family of brands.”

The global whiskey market is still growing.  It is expected to grow at 4.5% a year over the next 5 years. Brown-Forman’s advertising is working well domestically also. Total Whiskey and Bourbon revenue in the United States rose 9.6% in fiscal 2014.