First family of bourbon returns to revive its original brand

Campbell Brown (L) and his great great grandfather George Garvin Brown (R).
Source: Brown-Forman
Campbell Brown (L) and his great great grandfather George Garvin Brown (R).

For the first time since Woodrow Wilson was president, a member of the Brown family (as in spirits giant Brown-Forman) will be responsible for the Old Forester brand.

Campbell Brown is the great-great grandson of George Garvin Brown, the founder of Brown-Forman. The company says the Brown family is getting behind the lagging brand, emotionally and financially. The family already controls 70 percent of Brown-Forman.

Brown-Forman is investing $50 million in the brand. That includes a marketing push as well as a new distillery being built on Louisville's "Whiskey Row" at the original site of Old Forester and, last year, it released a new series of Old Forester Whiskey Row bourbons using the original recipe created in the 1870s.

In a major coup for the brand, the official drink of this year's Kentucky Derby will be the Old Forester Mint Julep. Previously the signature cocktail at Churchill Downs on Derby Day was made with Early Times—another Brown-Forman product.

Campbell Brown will become the president of the Old Forester brand beginning May 1, one day before the Kentucky Derby.

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While Brown-Forman is pouring a lot into the revitalization of its founding brand, there is a lot of ground to cover. Twenty-five years ago, Old Forester was a million-case-per-year brand. Last year, it sold just 112,000 cases with half the volume in Kentucky and Alabama. Compare that to the company's Jack Daniels 2014 production output of 11.5 million cases and its Woodford Reserve output of 300,000 cases.

Sales of Jack Daniels have grown 35 percent over the past decade. Brown-Forman wants Old Forester to catch up. The challenge is that it doesn't have the same cachet.

Overall the more affordable "value" brands are under selling. Sales of so-called super premium brands have grown 124 percent since 2009. In the same period high-end premium has grown by 28 percent, premium by 26 percent and value by only 12 percent, according to the Distilled Spirits Council of the United States.

On Brown-Forman's latest investor call, chief finanical officer Jane Morreau said: "We are investing heavily to meet future demand as seen through the large-scale distillery, warehouse, and home place investments at Jack Daniel's, Woodford Reserve, and Old Forester."

America's native spirit is enjoying a resurgence in recent years. In 2014, 19 million cases of bourbon and Tennessee whiskey were sold in the U.S. generating $2.7 billion in revenue, up nearly 10 percent from the previous year.

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Brown told CNBC Old Forester is well positioned to take advantage of the explosion of interest in bourbon.

"First off you have to make sure the product is available in markets in the Northeast, Brooklyn, New York, Wicker Park in Chicago and the West Coast. In the on-premise in the bar and restaurant business, we're already seeing a boom there," said Brown.

The last time a member of the Brown family was in charge of Old Forester was under George Garvin Brown, who died in 1917. Then they called it "America's First Bottled Bourbon." Ninety-eight years later, the Browns are hoping to return their cherished brand to a similar lofty status.