Jack Daniel's to get $100 million expansion of distillery

11:24 AM, Aug 22, 2013   |    comments
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Update 10:34 a.m.

Brown-Forman Corporation is investing more than $100 million in an expansion of the Jack Daniel Distillery in Lynchburg in response to global demand for its signature Tennessee whiskey.

The expansion will include the addition of more stills, barrel warehouses and other infrastructure to support the expansion. The expansion should add more than 90 full-time jobs to the distillery over the next five years. Construction will begin this fall, and shoudl last about two years.

"The demand for Jack Daniel's Tennessee Whiskey worldwide speaks volumes for the craftmanship and specialness of a spirit distilled from a small cave spring hollow in Tennessee," said Jeff Arnett, master distiller at Jack Daniel Distillery, in a release.

The company currently has more than 430 employees at the distillery, primarily focused on the areas of distilling, bottling and shipping.

"The substantial expansion set to occur in the upcoming years in tremendous for the community and underscores Tennessee's No. 1 ranking for job growth in the Southeast," said Bill Hagerty, Tennessee Department of Economic and Community Development Commissioner, in a release.

This past year, the Tennessee General Assembly passed legislation designating that any whiskey labeled as "Tennessee Whiskey" must be charcoal mellowed and produced in the state, in effect creating a new spirit category similar to Kentucky Bourbon.

At the company's annual shareholders' meeting last month, Louisville, Ky.-based Brown Forman CEO Paul Varga talked about the company's efforts to grow market share for Jack Daniel's whiskey, which is the best-selling American whiskey brand worldwide.

Despite the strong sales for the brand, Varga said it only has about 3 percent market share in the whiskey market. He said segment leaders in other liquor types - such as tequila, rum and vodka - have a market share that tops 10 percent.

"We think there is a lot of room - not only because of the momentum in the categories - but also because we have a relatively low share," Varga said. "It's hard to say we've just 'cracked the surface' given the size of the brand, but I do think there's a tremendous remaining opportunity."

For fiscal 2013, Jack Daniel's Tennessee Whiskey grew net sales by 9 percent, with markets outside of the United States modestly outpacing growth inside the U.S.

Jack Daniel's Tennessee Honey's global net sales nearly doubled in the second full year in the marketplace. Sales in the United States grew by 37 percent. Sales outside of the United States were driven by the rollout of the brand to several key markets, including the United Kingdom, Australia, Poland and South Africa.

"Launching the Honey brand domestically gave us a shot of enthusiasm," Arnett said in an interview with The Tennessean this week. "Sales have exceeded all expectations."

According to the company's quarterly filing, Brown-Forman "expects to bring this great product into other important markets for Jack Daniel's in fiscal 2014."

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The Tennessean

Tennessee officials - including Gov. Bill Haslam - and representatives with the Jack Daniel's brand will be at the company's Lynchburg distillery Thursday morning for a "major announcement," officials said.

There were no details available on the announcement, but officials with Brown-Forman Corp. - the parent company of the Jack Daniel's brand - have expressed a desire to grow the business in the near future.

At the company's annual shareholders' meeting last month, Brown Forman CEO Paul Varga talked about the company's efforts to grow market share for Jack Daniel's whiskey, which is the best-selling American whiskey brand worldwide.

Despite the strong sales for the brand, Varga said it only has about 3 percent market share in the whiskey market. 

He said segment leaders in other liquor types - such as tequila, rum and vodka - have a market share that tops 10 percent."We think there is a lot of room - not only because of the momentum in the categories - but also because we have a relatively low share," Varga said. "It's hard to say we've just 'cracked the surface' given the size of the brand, but I do think there's a tremendous remaining opportunity."

For fiscal 2013, Jack Daniel's Tennessee Whiskey grew net sales by 7 percent, with markets outside of the United States modestly outpacing growth inside the U.S.

Jack Daniel's Tennessee Honey's global net sales nearly doubled in the second full year in the marketplace. Sales in the United States grew by 37 percent. 

Sales outside of the United States were driven by the rollout of the brand to several key markets, including the United Kingdom, Australia, Poland and South Africa.

According to the company's quarterly filing, Brown-Forman "expects to bring this great product into other important markets for Jack Daniel's in fiscal 2014."Please visit this page at 9:30 a.m. Thursday morning for more details from the announcement in Lynchburg.

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