Concurrent to its announcement of a 3-for-2 stock split, liquor
) came up with its plan to build a new cooperage for manufacturing
barrels for Jack Daniel's Tennessee Whiskey, given the growing
global demand for the whiskey. The company plans to put up the new
facility in Decatur, Alabama.
The company believes barrel-making is an important ingredient of
making quality whiskey as it adds to the taste of the product. The
company is the only major distiller, who makes its own barrels.
The new Alabama facility will be the second Brown-Forman
cooperage - the first one is operational in Louisville, Kentucky.
The new facility, which is expected to be operational by May 2014,
will double the company's barrel making capacity. The facility is
expected to employ about 200 workers.
Brown-Forman's barrel-making facility is ideally located close
to the Jack Daniel Distillery in Lynchburg, Tennessee and at the
centre of the two mills that supply wood for the barrels.
Apart from Jack Daniel's Tennessee, leading distiller
Brown-Forman possesses a fine quality beverage alcohol brands, such
as Finlandia, Southern Comfort and Canadian Mist. This strong
portfolio of globally recognized brands provides the company a
competitive edge and bolsters its well-established position in the
Moreover, we believe Brown-Forman's strategy of expanding Jack
Daniel's market share in developed markets, such as France and the
U.S., and emerging markets including Russia, Poland and Mexico,
where the whiskey category is in early stages of development will
boost its top line.
Brown-Forman is in direct competition with
Constellation Brands Inc.
). Currently, Brown-Forman has a Zacks #4 Rank, implying a
short-term Sell rating. We maintain our long-term Neutral
recommendation on the stock.
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