Everyone, welcome to Brown-Forman's 2012 Investor Day. We really appreciate each of you taking time out of your calendars to come here and learn more about Brown-Forman, a company we truly believe is special in a great industry. Let's move on to a quick review of safe harbor language and then go into our agenda. Today's investor presentations contain forward-looking statements based on our current expectations. This page highlights some of the risk factors you should consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K, 10-Q, 8-K, all filed with the Securities and Exchange Commission. I also wanted to point out that today's meeting is being webcast for investors who aren't able to attend in person, and these slides have been made available on the website under www.brown-forman.com entitled Investor Relations.
Turning now to the agenda, Paul Varga will kick off our presentations, which will run from 1:30 P.M. to 3:00 P.M., followed by a short 15-minute break. We'll return for some additional presentations from Don Berg and Garvin Brown before opening up the event to a formal Q&A. We'll wrap up the day with some whiskey tastings. With that, I'm proud to introduce Brown-Forman's Chairman and CEO, Paul Varga, who I might add, just celebrated his 25th anniversary with the company. Paul?
Thank you. Mic? Thanks, Jay, and thanks to all of you for being here. We've got a cast that's up here in this front row, and we're all thrilled to be here with you. When we think about a session like this, we do about every couple of years, we really hope that we can fill a room like this and have the kind of interest that's evident, I think, by your attendance. We don't take it for granted, and we know, as you can see from the agenda, that it's a real serious commitment to go give an afternoon to hear about Brown-Forman's story. The names that were on that agenda. Just one thing that's in your books here, everybody should have them in front of you at your seat.
In the back, of course, the presentations are in here, but in the back, we added some profiles of the people you're going to hear speaking throughout the course of the day. We won't go into long introductions about any one of us, but one thing as I was scanning through it that I noticed that I thought you might find informative and helpful is that of the nine people who will share the stage with me today, the experience at the company adds up to over 150 years of experience at Brown-Forman. That's, on average, greater than 15 years per person and something that we're really proud of, and we think it helps us collectively and individually to make really, really good decisions on behalf of our shareholders.
If you get a chance, it just will give you a minute, if you get on a break or even after the conference, a chance to look at some of the people who are behind Brown-Forman's success story that we're going to talk to you about today. My job is really to introduce the day and to talk to you about not only who's going to be speaking with you, but also what we are as a company. Many of you would be familiar with Brown-Forman's story, and I've already talked to a couple of you who go back with the company quite some time. If nothing else, what we hope you get from today is just to get current on Brown-Forman here in the winter of 2012. On the screen behind me, you'll see a handful of items.
If you had to put on one page a descriptive of Brown-Forman Corporation today, it's a leading portfolio of premium distilled spirit brands with a very targeted focus. One thing we often, when we contrast ourselves versus others in the industry, you don't hear a lot of people talking about Brown-Forman's long tail, for example. I think that in terms of trademark families, the company has less than 20 trademark families in total. It's a pretty focused company by comparison to most of the mid and large size companies in our industry. Of course, we're known for our ownership of both the Jack Daniel's trademark and the distillery that supports it, two of the greatest assets of the corporation.
If you've followed the company over the years, you will have observed a growing geographic diversification and a variety of models we call RTC, which is route to consumer, to support that. Oftentimes deployed market by market based on the circumstances and the strategies and hopes we have for each of those individual markets. You all would be the judges as to whether or not the company's in good financial health. Our view on it is that both our current and historic performance would point to that. The company's industry-leading return on invested capital, the total shareholder return metrics, some of which I'll share with you here in a moment. Our stewardship of capital, you all would've noticed here just in the last month, a number of announcements around both dividend and special dividend. We work very hard to think about the company's future.
When we make decisions about it, we do a lot of work on the risks for the rewards we get, and we try to tip that balance in favor of the shareholder when we approach decision-making at Brown-Forman. There might be an opportunity for you to observe some of that through the presentations today. Very importantly, and something we haven't always brought into these sessions, which we're going to do today, is the Brown family's control and the perspective they bring to the company, which we think is an advantage. Later on today, you'll hear from Garvin Brown on some of that. Shown more visually, what you do, sometimes we show bars. What a great industry, right? You get to show your charts on cosmopolitans and mint juleps and hurricane glasses. It's one of those types of industries that are fun.
As you go through the day, I would ask you to think about what are you seeing that reinforces Brown-Forman's prospects for growth? How might you understand better the company's growth story? You're going to be hearing through the variety of presentations, various elements surrounding how the company has grown and how we continue to have really high hopes for the continuation of the growth story that we've been able to report to you over the last many years. Additionally, we'll talk, particularly in Don's section, I think, later in the afternoon about the financial strength of the company. We'll get into more detail on it. Very importantly, we'll make reference to, but won't go deeply into, what we call our Brown-Forman 150 strategy.
A couple of years ago, when we gathered at a similar investor conference across town, we got into this pretty deeply, through the course, while we won't go into it in great detail today, you will hear various people in front of you refer to BF 150. I think the thing I always like to comment on as it relates to that strategy is that its length in orientation. When we first unveiled it in 2009, it was intended to point us toward a milestone, which was the company's 150th birthday in the year 2020. That being really only a mile marker on something that we refer to as, we use the letters of the company, BF, for Building Forever.
We like to think of this as an enduring exercise, one of the things that you have to do if you're going to have an enduring company is invest behind it. Through the course of today, you'll hear varying programs about investing in our brands. You'll hear about investing in the marketplaces where we see so much opportunity. You will have observed investments in our assets, the most noteworthy of that in the last year, expansions at the Jack Daniel's distillery. Then very much, the group that's in front of you and that we represent at Brown-Forman, investments we make behind what we think is the most important ingredient in all this, are the people that come up with the ideas and make the decisions that make Brown-Forman continue to grow.
A chart we've used several times since the close of our fiscal year last year, back in really through the early summer and up to our shareholders meeting. We're very proud of the consistency of our performance against even different backdrops. Here you'll see in the good times, from, we were all observing how wonderful the marketplaces were around the world from 2002 to 2007. It's probably evident here in this S&P 500 benchmark that a 9% growth accumulated during that five-year period of time, Brown-Forman was able to outpace it at 13%. Even more noteworthy, from 2007 to 2012, the following five-year period, which for purposes of this we'll label bad times, we actually accelerated our growth rate and compared very favorably to the S&P and, of course, the 10-year, which show an eight-point differential ending last April for the 10 years.
It's all the stuff that's underneath this story that I've highlighted for you that you're going to hear from people. To kick that off, somebody that has been around Brown-Forman for a number of years and actually worked in this arena a bit, who's going to follow me, who's now our Chief Brands Officer, and that is Lawson Whiting. Lawson is joining most directly from as the head of our Western European business but has worked across the company in finance, brand leadership, regional leadership, in both the U.S. and in the international marketplace. We're very excited to have him now taking over the leadership role of the company's brands and portfolio. Lawson Whiting.
Thank you very much. All right. Thank you, Paul. Very glad to be back. As Paul said, it's actually been over 10 years since I was involved in the investor relations function, but it's wonderful to be back here today and get the chance to really talk to you about our portfolio and some of the things that we see going forward. I must say, even in the sort of the 10 minutes before we got this presentation going, just the number of faces and names that I recognize and remember is, quite frankly, it's almost amazing how many people, both on the buy side and the sell side, have been involved with Brown-Forman in one way or the other for a long time, and particularly those that have been making investments in the stock.
I think you've been well rewarded over the last 10 years and hope that some of the things we're going to share with you today give you a lot of belief that we can do the same thing again going forward. This company has changed in these 10 years quite a lot. We've exited a number of businesses that were lower growth or lower returns, and really reinvested or innovated into higher growth categories into what we think of as better businesses with better rates of return. The result is we've created what we think is one of the best growth stories out there. It's a more focused story than it was 10 years ago and one where we see loads of opportunity going forward. To take a quick look at the portfolio, this basically breaks down our fiscal 2012 volumes.
You can see that Jack Daniel's represents about half the company. It is obviously a very healthy and growing brand. It remains one of, certainly, if not one of the best spirit brands in the world. Today, or after me, we're going to have John Hayes come up here, and he's going to talk about the Jack Daniel's family. I'm going to focus most of my comments on what we have going on in the rest of the portfolio. As Paul just discussed, one objective that we have for this company is to basically take the top half of that pie graph and accelerate the rate of growth on it. We're trying to accelerate, obviously, the entire company, but one of the ways we can do that is to take that upper half of that pie graph and get it really going again.
We've taken that from what would've been, say, a year ago, a low single-digit growth rate to today is more like a high single-digit growth rate. That is one of the things where we're benefiting, and it's helping to drive the entire company forward. We feel pretty good about that, and I'm going to try to talk a little bit more specifically about what parts of that are really driving that better portfolio growth. Southern Comfort is the second most profitable brand of Brown-Forman. It's been a challenging brand over the last few years, as probably many of you know. Mike Keyes is going to come up actually, in a few minutes, and he's also going to talk more specifically on what we're doing with Southern Comfort in the U.S.
I will tell, he and his team, have gotten now the brand growing faster than total distilled spirits, which is quite an achievement compared to where it was just a couple of years ago. We have really revamped the entire program on Southern Comfort. We've come up with a new TV campaign. We've really gone deep into social media. We've unveiled a number of line extensions. A lot of different things have changed on it, all of which we think are helping to benefit the brand. What I'm going to show you here is a TV commercial that we began running about two months ago, in the U.S., and it's also running in the U.K. It's actually running quite heavily right now at this Christmas season, and we think it's having a lot to do with some of the recent performance.
I gotta be me.
This is the TV commercial that's getting talked about. It's getting talked about in a lot of different places, it's one that you wouldn't think with this brand, that you're going to put a middle-aged, rather overweight man walking down the beach, in a very small bikini or bathing suit, with a song that was written in 1970 in a commercial that you don't see even what brand that we're talking about until the very end. Yet, it has cut through the clutter unlike any commercial that I've seen, particularly on Southern Comfort. I think it's really cut through the clutter better than most spirit brands that would be out there today, and we are seeing the results.
It's only been out for a couple of months, so it's too quick to necessarily judge its victory, but I think we feel pretty good that we've found something there, and that it's a campaign that Whatever's Comfortable, that we can take into new things. We all feel pretty good about what's changing on the Southern Comfort brand. Vodka is obviously a very large category around the world, and it's what I would call one of the quieter success stories at Brown-Forman. We've had a sort of a long-term, 10-year growth rate of about 6% largely driven by Finlandia. Finlandia is about 3 million Oh, sorry. I thought that was a microphone. It's about 3 million cases today, making it one of the top 10 global premium vodka brands in the world. Most of it is really from Central and Eastern Europe, where it's got an excellent position.
It's the number 1 imported premium vodka in both Russia and Poland, which are two very big vodka markets and very important markets. Quite proud of that. We've also recently made the acquisition of the Maximus brand, which you can see on the slide there. We've launched Little Black Dress Vodka and Chambord vodka in the U.S. There's a lot of different things going on in the vodka space and one where we feel pretty good that we've got some good growth opportunities going forward. Tequila is another big category for us. We acquired the Casa Herradura portfolio in 2007. Since then, that really gave us a platform to be able to grow, not only in Mexico but also in the United States.
Herradura is the ultra-premium brand, that you can see on the far left there, where we really feel confident that we can continue to grow that very nicely. It's growing at a double-digit rate right now, and it's priced just below Patrón, so it has a very nice margin to it. We feel pretty good about that. el Jimador, which is a really, really big brand in Mexico, is also really starting to move in the United States. We've essentially doubled the volume since we bought it and feel comfortable that that brand really has a very good association. It's particularly strong in the Latino population, and we feel pretty good about the growth rate for that going forward. Outside of the Americas, tequila is much smaller, yet we do see sort of more niche opportunities in places like Russia, Brazil, and Australia. Some good opportunities on that.
Of course, North American whiskey, which really is Brown-Forman's heritage and where our roots are with this company. We believe we have the best North American whiskey portfolio in the world, obviously anchored by Jack Daniel's, but we have a number of other brands that we have a lot of strong belief in and can see some opportunity. Outside of Jack Daniel's, it really is about Early Times and Canadian Mist right now. Those are the two largest of the rest of our portfolio. Early Times, which has been in the Brown-Forman portfolio for a long, long time, has had up and down years, but right now it is back growing again in the United States. We feel pretty good about that. It's also growing in Russia. We've seeded it there, and it's going well. It's got a decent business in Japan.
All pretty good, and once again, a much better performance over the last year than it had had in the prior years before that. Although North American whiskey's penetration is relatively low, particularly if you exclude Jack Daniel's, it is relatively low in the international markets. That's something that we want to make sure we retain a leadership position in. We have really big ambitions, and there's a lot of work going on right now to find out how to really play in the North American whiskey area. The brand I think that we will lead that with, at least on the premium side of the things, is Woodford Reserve. Woodford is our ultra-premium bourbon the company created back in the 1990s, so this is one that we created from scratch as opposed to buying.
It is what we think, we call it the proverbial tipping point in the United States. It's really starting to accelerate. It is getting really strong growth rates right now. It's priced in the low 30s, so it's also got a very decent margin to it. It's got line extensions. You can see the one on the far right there, that's called Double Oak, which is more like a $50 bottle of bourbon. And in the middle is a much smaller, but the Woodford Reserve Master's Collection is more like $100 a bottle, and we sell out every single one of those bottles, and very quickly. We feel pretty good that we've got a good portfolio of premium whiskey brands that we really can do something with.
Finally, let's wrap it back into the Jack Daniel's brand, which it still remains the core and the biggest and most important brand in the company. This chart here will show you, it's now the fourth-largest brand. This is IWSR data that you're looking at here, and we are almost ready to overtake Bacardi to become the third-largest brand in the world by value. We may get there even this year. I'll also point out then, of the top 10 largest brands, if you look at that far right, in the last five years, Jack Daniel's is the fastest-growing brand of the largest 10. It's been a really good, solid success story and one where we continue to see a whole lot of potential going forward.
With that, I'm going to have John Hayes come up, and he's going to talk about the Jack Daniel's family of brands.
No sound. You drinking? It's the president. He needs you for a mission. Hell, I'm retired. You want to do a couple shots? Let's go. Jack and I had a very good relationship in its purest form. Wake up in the morning feeling like P. Diddy. Hey, what up, girl? Put on my glasses, I'm out the door. I'm gonna hit this city. Let's go. Before I leave, brush my teeth with a bottle of Jack. Cause when I leave for the night, I ain't coming back. What is your one go-to item on the plane? Probably Jack Daniel's. You recorded it? Yes. Where? Frank Sinatra at Capitol Records? At Capitol Records with Sinatra's microphone. Still smelled of Starlet perfume and tobacco. Jack Daniel's. Yeah. That's the nectar of the gods, baby. The story of Jack Daniel is the story of America.
Good afternoon, everybody.
Pleasure to be here. Obviously, it's a great brand that we all work on. We like to tell stories at Jack Daniel's, so I'm going to tell you a story about Jack Daniel's and some of the reasons for our success being one of these great global power brands. Behind me on this slide, just showing some of the pictures of what we call the history and the maker's world of Jack Daniel's. The story of Jack Daniel's, of course, begins in Lynchburg, Tennessee, a dry county of all things, where Jasper Newton Daniel founded his distillery, America's oldest registered distillery, in 1866. It's a good thing for us that he had a nickname, Jack, because calling for a Jasper and Coke just doesn't quite sound the same.
Mr. Jack Daniel did set up his distillery at our famous Cave Spring, and insisted on charcoal mellowing his whiskey drop by drop, true to one principle. He said, "Every day we make it, we make it the best we can." It's a tradition we proudly continue. Jack Daniel's gets its credibility from a real history. It's made by real people in a real place. We have multigenerational employees who take great pride in their job, creating a unique-tasting whiskey unlike any other. Another interesting fact is that we get over 300,000 people a year that come out of their way, 70 miles south of Nashville, to visit our distillery from all around the world. As you saw in the video, over the years, the rich legacy of Jack Daniel's has made it a fixture in popular culture.
This is something we did not go and chase. We did not pay Paul Newman to appear in Hud many years ago. It just, for directors and writers and TV shows, Jack Daniel's makes a statement about the character. We don't chase it. You let it happen. You can see that it's created all kinds of visual imagery, and it's an iconic brand with enormous equity, value, and awareness worldwide, not only from our story of Lynchburg, but as you can imagine, through American pop culture, through movies and music that plays all around the world, has been a great asset for us. It's independence, it's integrity, and it's authenticity. Consumers feel passionately about these values and access them through the brand as the authentic masculine badge.
Going all the way back to Bogart and Sinatra, up through Richards and Jagger, today, Zac Brown and Eric Church in the country music arena. Even women, Lana Del Rey, you can see in the bottom left, wearing a Jack Daniel's shirt in her concert. Even this week, we saw in the U.K. paper, Rihanna was with her friends with a bottle of Jack Daniel's. The culture continues on, as well as you can see in the movies, with great actors who say a lot about the brand, whether it's Paul Newman, Jack Nicholson, Al Pacino, or Tom Cruise, has been a great factor for us on the brand.
What this has all led to is this powerful brand equity, Jack Daniel's is certainly a power brand in the world, not only of beverage alcohol, but we believe in the world of all consumer products. As you can see here, we've gone from 1956, is what I've put back here, is the year that Brown-Forman acquired Jack Daniel's from the Motlow family, where in the lifespan of brands, frankly, is not that long ago. Back then, we were just selling about 200,000 cases in a few states in the U.S. to, as you see throughout this great ride that we've been on, we're now selling over 12 million cases in over 160 countries around the world.
What this has done is create what I like to call is just a good challenge for us, because there's a lot of balance required in what we do with Jack Daniel's. Obviously, we built the brand from these early days with a lot of the small town, special value, sort of an undiscovered brand to, obviously, today, when you're 12 million cases around the world, you have the risk of becoming much more of a mainstream brand. We work very hard to reinforce the specialness of Jack Daniel's. That's, again, back to this point of through the maker's world of what Jack Daniel's is all about to popular culture today. We like to say, in many ways, Jack Daniel's is the small-town hero from the U.S. who's made it big on a world stage.
To take that a little bit further, we also think that we live outside of just the whisky segment in the world. Naturally, we are a whisky, so we're thought of as a whisky. Outside of the U.S., whisky, by and large, is Scotch whisky. We, of course, have many of the qualities associated with Jack Daniel's that Scotch does. I mean, it's a very traditional brand. There's a lot of heritage with the brand. It's a quality product, just like many of the Scotches are. Being a whisky, it's an acquired taste. Also, in particular, there's a broad price spectrum that we like to-- especially in the Scotch whisky. Use Johnnie Walker as example, all the way from Red Label through the colors, the Blue Label to now even they've got $1,000 products that are out there.
It gives that trademark room to expand, if they choose to, both below and above. Finally, Scotch is really the world's truly global category, where it is a, by and large, big in every country in the world. We also compete in an area of probably the second-biggest category in the world, which is the vodka category. If you look at the cues coming through, vodka being much more associated with modern products, more of a stylish, especially with its packaging and its advertising. Vodka's, of course, by its nature, very mixable, with a lot of variety. Vodka's been very successful in extending into flavored line extensions. There's dozens of them today. Vodka would've been at the forefront of the RTD category. For example, Smirnoff Ice years ago, very successful in creating a very successful business ready-to-drink.
Vodka, unlike whiskey, is still very large, but it tends to be more regional, although growing in most places around the world. The thing about Jack Daniel's, we like to say that it's really at the intersection of these two categories. If you look about it, Jack Daniel's could encompass all of these that are going on here through, again, back to my point on the maker's world and the tradition of whiskey cues. We've been able to incorporate a lot of the vodka world, particularly an example of Jack and Coke and mixability, Jack Daniel's Tennessee Honey and our flavored extension. We have a tremendous ready-to-drink business. We like to say that Jack Daniel's is competing in both of these worlds.
With that, I'd like to now take you through an example from those two worlds, from maker's world and contemporary culture, and show you how we're actually bringing Jack Daniel's to life around the world. I have three commercials that I'm going to show you right now that we're very proud of all three, but you'll see that they're very different from each other.
What do you have to do to get a drink around here? Well, a lot actually. This is a dry county, which means you can't buy it. You'll have to make it yourself. Here, that means doing a lot of extra things that are considered too difficult or costly in other places. Lynchburg, Tennessee. It's a hard place to get a drink of whiskey, but it's the only place to make Jack Daniel's.
He sat in on countless legendary recordings. He was Sinatra's right-hand man, friend to some of the biggest names in rock 'n' roll. He was there at Studio G in 1978 for Sunset Strip and more. He went on tour in 1966 with a still-growing smile on his face. His name is Jack.
[Foreign language] Nunca ha seguido a los demás. Nunca se ha conformado. Nunca ha imitado. Siempre ha marcado su propio camino.
That last one is an ad from Mexico, obviously, but it's running in different languages around the world. Again, it's not scotch, it's not bourbon, it's Jack. A simple message that is very powerful. Saw the music spot. We spend a lot of money around the world on music platforms. We wanted to take advantage of that as well as our place in music. That's a brand-new spot that's just hitting the air in a number of countries, as well as obviously our traditional Lynchburg advertising that we've been running for many, many years that we're very proud of and continue to update and tell that story. The great thing about this digital world that we're in right now is that one of the oldest sayings that we had at Jack Daniel's is the simple encouragement to tell our story, not to sell our story.
Jack tells a story, it doesn't sell a product. We have many stories to tell, we've been doing it frankly since we've had a Tennessee Squire program since the 1950s that we believe is probably one of the first consumer relationship marketing programs. That was with our most loyal consumers around the world. Today, we're having tremendous success connecting with people in the digital world. We have a database of over 13 million fans, including over 8 million on Facebook, and more than half of these reside outside of the U.S. We're able to take the same Jack Daniel's message we've had for all these years in our understated manner, very quietly confident, with our friendly, knowing smile and a sense of humor that inviting consumers to tell our story and for them to tell their stories back to us.
Just a little plug, this is a chart from eMarketer magazine, Jack Daniel's has been recognized as having the highest consumer engagement rates in the adult beverage category. That's beer, wine, and spirits. We actually have the second highest number of fans on Facebook behind Heineken, but a higher engagement rate. If you ever get on, I encourage you to friend Jack Daniel's on Facebook and just follow the conversation, because it really is consumers all around the world. We like to say we're actually hosting a virtual cocktail party from around the world. That's been a lot of fun for us in helping to continue to build this great brand. I'm moving a little bit here now into how we've evolved as a brand. What you're seeing here is our depletions on the left back to 1990 up to today at the bottom axis.
What you can see is in 1990, essentially, we were a one SKU brand from the standpoint of Jack Daniel's Black Label Tennessee Whiskey. We had just introduced Gentleman Jack a few years earlier. You can see then fast-forward to today with the introduction of principally our RTD business, Gentleman Jack, and most recently, Jack Daniel's Tennessee Honey. Our portfolio now represents 12% of our volume is actually outside of Jack Daniel's Black Label. It's a similar true story here on our geographic mix. You'll see cases on the left, our fiscal years on the right. You can see in 1990, 80% of Jack Daniel's business was here in the U.S. You fast-forward to today, you can see the green line is our international business.
Although the U.S. has continued to grow nicely for us, the green bar has actually a few years ago went ahead of the blue bar, and now 54% of our Jack Daniel's business is outside of the U.S. Very proud of that. Just to touch on a few countries here. I've just selected a few of our developed markets, the axis here being millions of 9-liter cases, the years beyond that. We've been doing business in markets like the U.K., Germany, France, Australia, and Japan, essentially since about the mid to late 1980s, excuse me, 1970s, in a very small way, and have accelerated that over the years. Have been very successful. Obviously, U.K. being our biggest market outside of the U.S. We're the number 1 whiskey in the on-trade in the U.K., which we always find amusing.
In the land of Scotch, we actually outsell them. Germany's been a great story for us for many years, since we've made our move to our own route to consumer with our own company in Germany, our growth rate has been accelerating. France is one of our most recent success stories in accelerating growth for the last three to five years, in a very large whiskey market. In Japan, which is the second-largest whiskey market in the world after the U.S., we're very excited about our move to Asahi, which is taking place here on January 1, looking to continue to grow that business. Finally, Australia's always been sort of our foundation of international growth from the early years. We continue to do great business there, again, with our own company. Moving to just a few of the emerging markets.
We're seeing rapid growth in many emerging markets, especially Russia, Poland, Brazil, Turkey, and Mexico. The interesting thing with this is that, again, the route to consumer, Mexico being a great example, we acquired Casa Herradura. Yes, we wanted to get into the tequila business there, but probably almost as importantly, we wanted to be able to build Jack Daniel's in that market, and we've really taken off since we've had our own company there. The same now, we're seeing signs. We've tried for years in Brazil. Started our own company there two or three years ago, and it's now one of our fastest-growing countries. Poland, again, because of our Finlandia business, we've been growing nicely. Russia's now really one of our true exciting short-term. We've just really started to get going there with our relationship with Coca-Cola Hellenic.
It's early days in all of these markets, which was very exciting for us, and we're very excited about the growth prospects for the future. This next strategy, I'm now moving into a little bit of going forward. Where are we going with Jack Daniel's? This is just a nice snapshot to show that, at our highest level, we say we want to make every adult around the world a friend of Jack's. To do this, we need to create satisfying brand experiences that nurture a relationship for life. In order to do this, we need to recruit new consumers and increase loyalty among our current consumers. We need to reach more segments in more markets and participate in more occasions, categories, and price points.
The two that you see here is we need to grow our existing portfolio, as well as introducing new Jack Daniel's products. I'm going to take you briefly through all four of these. The first, of course, is Old No. 7 Black Label. This will continue to be the driver of Brown-Forman and our portfolio, and we intend to accelerate the value growth of this very special and powerful, unique brand. We've recently, after the global financial crisis, been very focused on, you've heard about us improving our margins, increasing prices. We've reduced our depth and frequency of discounting. This has gone on around the world. We're still in early days, but we're very encouraged that our growth continues.
We've also been very focused this year, and will continue on making sure that we're reinforcing the specialness of Jack Daniel's and getting more and more of our investment behind what we call above the line, directly to the consumer, telling our story, in particular, in the digital world. As far as accelerating the rest of our portfolio, Gentleman Jack would've been our first line extension back in 1987. It's a charcoal mellowed twice, before it goes in the barrel and after it goes in the barrel. You can see by this chart, again, a great acceleration, not only here in the U.S., but over the last few years, we've been introducing it and developing it in many countries around the world. In fact, now 35% of Jack Daniel's volume is outside of the U.S.
This brand really, again, was essentially developed for sometimes drinkers want to trade up or show off a little bit and do something different, Gentleman Jack is there for them on that status occasion. Another line extension we did in the '90s was Jack Daniel's Single Barrel. It's our ultra-premium line extension, and again, you can see by the graph, it's performing very well. It sells for about twice the price of Black Label. The interesting thing on this one is, over 60% of Single Barrel is sold outside of the United States and does very well in places like Australia, France, and the United Kingdom in particular. It's a very high-margin whiskey for us. It's aimed at discerning drinkers, and it reinforces our whiskey-making credentials at Jack Daniel's.
As you can see here, we've been doing a lot of innovation over these years, so it's not new to us. Our Jack Daniel's ready-to-drink business, such as Jack Daniel's and Cola and Jack Daniel's Country Cocktails, continue to be very successful. The one thing on this one, 90% of the volume of our RTD business is outside of the United States, an extremely big and profitable business for us in Australia. We do very well in Germany, and more recently, in Mexico and the United Kingdom, we've seen tremendous success. These RTDs offer consumers more refreshing and convenient ways to enjoy Jack Daniel's, we particularly go after what we call the beer occasion.
We like to say as well, this has sold a lot of it's at events, sporting events, on-premise at concerts, it's a badge in the hand that we really like to have out there. Another example on this one is, it's more innovation, we've just launched a Gentleman Jack RTD in Australia, where the super-premium RTD segment has been evolving. Moving on to our latest and most successful introduction, Jack Daniel's Tennessee Honey. Jack Daniel's, as you can see here, was the number one new product introduced in the United States according to Shanken publication through Market Watch and Impact. The reason we got into this, really, obviously, a great business decision, we know that many consumers have a genuine affinity for what Jack Daniel's stands for.
Sometimes, quite frankly, they just don't like the taste of full-strength whiskey, particularly in women, where we've had tremendous success. Jack Daniel's Tennessee Honey offers the Jack Daniel's experience and character, at a more drinkable flavor experience. You're going to hear more about Tennessee Honey from Mike Keyes when he talks about the United States. We have begun to roll this out. This year, we've expanded to the United Kingdom, Australia, South Africa, Poland, and a few other international markets, we are very encouraged and excited by the reception, plans are underway to expand to more markets this coming year. I'd like to now introduce our latest innovation and new brand from Jack Daniel's.
On stage, beneath the spotlight, it was with him. Made it his own in New York City. It would become a staple of late Las Vegas nights and a mandatory at country club afternoons. When he traveled, his jet carried it to foreign lands. In the end, the man in the black and white tuxedo was laid to rest with a bottle of it. That's why his name is on this label.
Well, we didn't plan this today, but in hindsight, he's born here across the river in Hoboken. I don't know if you're aware of this, but today, December 12th, is Frank Sinatra's birthday. Would've been his 97th birthday today. That's one of the reasons we did this is his 100th birthday is coming up, obviously, in a few years. We have done this in partnership with the Sinatra family. They've been very supportive and excited in helping us out with this new brand. It is a bold, smooth, and classic whiskey that Frank would've loved.
In fact, it is a different one that you have the opportunity to taste here tonight, which is very rare for you all because it's still not on sale here in the United States, other than we've launched it at the Las Vegas Airport in the duty-free store in Las Vegas, which we thought Rat Pack in Las Vegas, it was a good place to start. You have to leave the country in order to buy it. It's retailing for $150 a bottle at this. We are selling. It's been there for two weeks, and I've heard from our duty-free people, it's selling very well. We're going to be rolling it out in a slow expansion because, frankly, this is a limited product we've created, and you'll hear more about it afterwards. These are special barrels that we set aside, that are called Sinatra Barrels.
We don't have an unlimited supply of them. We're being careful in how we bring it out. It'll roll out into some more duty-free stores next month. Heathrow, Dubai, Singapore, and Sydney are on the docket. We're also launching it at one of our most profitable stores in the whole world, which is our visitor center in Lynchburg, Tennessee. If you want to go down there next month, you can buy a bottle. We're really excited about this marriage of two great international icons. It's a true story. Frank really did love Jack Daniel's. We believe it reinforces the specialness of our brand again. That's what they believe. They want to keep his name in popular culture and the conversation. We did research, and Frank is still very cool to young and old around the world.
We're really excited about this new brand from Jack Daniel's. I'm closing here with two slides that really talk about the future, and why we're so excited about the future. The first one I'm going to talk about is the unique value of Jack Daniel's, and you'll see here on the right, you're going to see a few brands of the global volumes according to IWSR is what's on the bottom. On the left is what the price points average about on a global basis that IWSR would say for a few of the big spirit brands that we admire, frankly, around the world. You can start with the two largest international spirit brands, Smirnoff and Bacardi. They both sell 12, I think Smirnoff's probably closer to 20 million cases.
Very successful brands, but sold at a price point that you can see here, depending on the country, where it's going to be sort of in the $10-$15 range, which we would call the standard price range. They've been very successful at doing so. You can also go high-priced, like Johnnie Walker Black Label and Chivas Regal. Super premium brands, very successful, that sell for around $35 a bottle, give or take, around the world. They're considered very special, with status, and they're selling in that sort of 5 million-6 million case range. Again, extremely successful brands. We believe that Jack Daniel's is, we know it is, the number one selling whiskey brand as an expression. Johnnie Walker as a family, yes, is bigger as a trademark family.
If you look exclusively at Black Label, we're the number one selling whiskey in the world. If you put this into the perspective of, on average, Jack Daniel's around the world, $25-$30 a bottle price point, usually in the somewhere 30%-50% range more than the standard price category. You can see, where you're seeing we're selling around 11 million cases. To put that into perspective, a brand like Jim Beam, 5 million cases. Jameson, about 3.5 million cases. Maker's Mark, which we're all hearing about from this bourbon renaissance, but selling about 1 million cases around the world. Even Hennessy, a fabulous brand at high price point, sells about 5 million cases. You're looking at Jack Daniel's, what we like to somewhat say, is in rarefied air, at a very high price point, with very high volumes.
This, we believe, back to the saying of Lem Motlow that said, "All goods worth price charged." We're very proud of this statement that we're making. Finally, as far as the future, we're in the beverage alcohol business, it's growing around the world. We are in the whiskey business. We've demonstrated to you that this is a global category, and as seen on the left, it is a growing global category. What you're seeing here is what we call standard plus whiskey depletion. This is essentially standard price whiskey. We're not including lower price local whiskeys like the Indian whiskeys that would be in here. A growing category. Jack Daniel's share within that category, we're doing well. In 2001, we had a 7% share of this whiskey category.
Fast-forward 10 years, all that growth we've had, we've grown share, but it's only two points. Very proud of that, but the exciting thing for us is we're going after that other 91%, and that is where the opportunity goes for us in the future. We frankly just think that we're scratching the surface on what Jack Daniel's can be, with enormous potential ahead. With that, I'm closing with, since it is the Christmas season, I wanted to close with our ad that we've created for this holiday season. We launched it last for the U.S. It triggered a lot of emotion around the U.S. We've now taken it to some markets outside of the U.S. We believe it's, again, showing the emotional connection this brand brings. Then you'll see how we're taking that into the U.K. to close it out.
We laughed so hard, pressed so tight. Felt so good, thought we just might. Burst into pieces, scatter through the night. We let it go. Saying the rude sight, to be young and with your mind. This time, the river wide.
It's not what's under the tree that matters.
Same kind of ride.
It's who's around it.
Wild rushing, open fire.
We are here in Covent Garden, smack bang in the center of London, we're building the Jack Daniel's barrel tree. It's got a strong tradition back in Lynchburg. Every year, around the festive period, the distillery guys get together, start building this amazing monument. There's a crew of nine who are going to be busy rolling barrels, screwing them in, getting on cherry pickers, telelifters, forklift trucks, all sorts of things going on. There's a lot of wiring involved, some lights, garlands, pine cones, and berries, all to add that sort of festive touch. It's something that no one in the U.K. has seen before, apart from on a poster from Lynchburg. To see it in Covent Garden every day for a month, it's going to be incredible.
Well, we want to bring a taste of Lynchburg, Tennessee to the folks here in London. We brought over 140 barrels from our distillery in Lynchburg to erect a tree, to celebrate Christmas with you fine folks here in London. These are authentic barrels that we use in Lynchburg. If you were to take the bung out of the bung hole there, you'd smell authentic whiskey inside that barrel right now.
The build's gone really well tonight. The guys behind me have spent the last four or five hours just getting up there, getting all the barrels on, then they'll be back tomorrow night to do all the decorations.
Three, two, one.
This is the first barrel tree that has ever been built outside of the U.S. What a great place to put it, is here in London. It's all about the people around the tree. It's all about Christmas time. Being with your families, your friends, and enjoying Christmas. That's what it's all about.
We got Covent Garden this year. We're hoping to have it out here in Times Square next year. Thank you very much. With that, I'm going to turn it over to Mark McCallum. Thank you.
Thank you, John. It's always difficult after a 30-minute Jack Daniel's immersion not to just marvel at the strength of that story. I think, John, you could probably just go on tour, do that presentation, and have some fun. In addition to that story on Jack Daniel's and the story that Lawson shared with you in regard to our vodka, tequila, and other brands in our portfolio, we want to spend the next 45 minutes, bringing to you a perspective of Brown-Forman's performance through the lens of our markets or the geographic strategy that we've been deploying. Myself and three of my teammates from around the world will share with you some of this story.
I will start with a global oversight of our geographic journey, of expansion, and then Andrzej, Jill, and Mike will share with you some more interesting specific insights into three market types, three market stories that underpin the validity of this strategy. Let's just reprise the 20-year international growth story of Brown-Forman. The pie charts on the screen here will show from 1992, the 10-year run through 2002 out to 2012. Moving from 86% of Brown-Forman's business, this is a net sales share, 86% of our net sales generated in the U.S., 14% everywhere else, and all the way through now to last year, 2012, where 42% of our sales generated in the U.S. and the balance, 58% elsewhere in the world behind this purposeful strategy of internationalizing the Brown-Forman company.
It was born in the mid-'90s, a purposeful strategy developed by the leadership team at the time to take Brown-Forman behind the trademark Jack Daniel's to the world. Over this period of time, the compound net sales growth of the company over the 20-year period was around 5%, and in behind that, the U.S. growing around 1% compound over that 20 years, and the international business growing somewhere around 13% compound over that same 20 years. Maybe the last observation from this chart, which you won't see from the numbers here, though, that from 2002 to 2012, a more than doubling of the net sales of Brown-Forman to the current $3.6 billion last year. It is a journey of internationalizing the company, and it has been a purposeful journey, which was turbo-boosted even more so in these past 10 years.
Another way to look at it, perhaps, is in terms of the scale of business that we have beyond just the U.S. What you're looking at here over the same 20 years is the number of markets of scale, or what we would say of sufficient scale to begin to encourage competitive positioning enough for us to be confident in the future of our business within that market. From a handful of markets, six, just 20 years ago, to around 40 markets today that we would declare are of scale. Some of the stories in behind the ability to do that, if I look particularly at the last 10 years, I would say, of course, that the international movement started with Jack Daniel's.
It's such an incredibly strong trademark to be able to take out to the world and interest third parties, in helping us sell, market, and distribute the Jack Daniel's brand. Early in the last 10 years, the acquisition of the Finlandia business has certainly fueled our ability to grow internationally, particularly in Central and Eastern Europe. Six years ago, the acquisition of the Casa Herradura business, bringing also to us an ability to grow our business beyond just the trademark Jack Daniel's. This story of developing markets of scale and internationalizing continues. It's the brands that are causing it, and enabling it. This story of developing markets of scale and internationalizing continues. It's the brands that are causing it, and enabling it.
As Paul said in the early lead-in here, the people that we've been adding to our business internationally have been a huge and leading part of the capability of this international expansion. The route to consumer or the way we go to market in any particular country has been one of the primary enablers of our ability to demonstrate the performance and expansion that we've been showing. What you're seeing on these two pie charts is, it's a 10-year spread, 2002 to 2012. It's net sales, again. It's represented by strip net sales. It's talking about the type of, or the method of going to market that we have been using. If I start with the 2002 pie chart on the left, agency, 88% of our international sales, this is excluding the U.S. here, of our international sales, was generated through third-party agency business.
It was relatively easy to go and find partners in countries elsewhere in the world who were interested in Jack Daniel's as a brand, certainly in terms of the ability for Jack Daniel's to add margin to their own operations in those markets, but also the ability of Jack Daniel's to lead the development of some of their own brands. As Jack Daniel's grew in the on and off-premise around the world, brands sat in the portfolios of Bacardi and Diageo and other partners that we were using 10 years ago were benefiting as well. It was a very successful model to begin this rapid internationalizing of Brown-Forman.
Over the last 10 years, with the acquisition of our vodka brand, Finlandia, and the additions to that vodka portfolio Lawson spoke of, and the addition of our tequila portfolio, and the innovation and creation of some of our own whiskey brands, it's harder for us to get the attention of a third-party distributor to develop brands that they may also have competitive offerings of. Vodka brands, all our competitors have vodka brands. Tequila brands, most of our competitors have tequila brands. We have set about a deliberate move to ensure that we get sufficient competitive influence in markets that are important to us to be able to grow our business beyond just Jack Daniel's.
The movement you see from 88% of our business in the hands of third-party distributors, mostly competitors, actually, distributing our brands back then, to today, 34% of our net sales generated internationally through the same third-party arrangements. We have moved purposefully in a number of these markets into our own distribution model, which now 52% of our international sales, we control within that market, the sales marketing, distribution, and general management of the business in those markets. The cost-sharing segment that you see there principally speaks to the U.K., where we have a very favorable, or a very good partnership with Bacardi in a very important market to us. The journey of our route to consumer strategic evolution has been a fascinating one for us over the last 10 years and has, as its core, the basic need.
It is not that everything will eventually move to owned, because there are models in certain markets that particularly suit our business and our balance of risk and reward at the moment. I think Paul had said that it depends on the market as to how we may set our models up. We're very pleased with the ability to do it, and mostly, we want to be sure that in the priority markets that we have, that we have the influence needed to be competitive in that market. The slide you're looking at here on the horizontal axis declares the key priority markets that underpin our Brown-Forman 150 strategy. In each of those markets, the blue column illustrates the size of the total distilled spirits business in that country, and the red line indicates the Brown-Forman company's market share in that market.
A couple of observations I would make, or offer to you here. As you look at this collection of markets, there are some commonalities in that collection with a number of our global competitors. Just like others who we compete with, the United States remains the most valuable, the most competitive spirits market in the world. I might just refer to that asterisk on the China market there. We put that asterisk there because all the other market sizes are directly sourced from IWSR. We're in some very healthy discussions with IWSR about our view that IWSR has not yet found a way to accurately quantify the Chinese spirits market.
In fact, we believe it's somewhat overstated in the IWSR world, but not a large point, just to say China's a hugely important market with a varying number of sources of who believes how big that spirits market really is. Getting back to observations of the actual markets themselves, as I said, many of our competitors would have the same, the United States and the obvious emerging markets, the BRIC markets, and Turkey. There aren't many of our competitors who would have on a set of a dozen key priority markets for a 10-year strategy, markets like France, Germany, U.K., Australia, maybe even Poland, you could argue. What we would say is that this representation of our priority markets has commonality, but is also somewhat unique to Brown-Forman.
We believe, because of the fact that we have been able to evolve our route-to-consumer model in a number of markets around the world, we're only at the early stages, in a number of these markets, of realizing the opportunity that they present. In a minute, you're going to hear about three of those markets. You're going to hear about one of our classic emerging markets, Russia. You'll hear about one of our very interesting markets where we have our own distribution via Casa Herradura acquisition in Mexico. Mike's going to talk to you, of course, about the world's most valuable spirits market here in the U.S. One of the other observations of this chart that we like to make is that our market share, no matter which model or which market you look at, our market share is below 10% in every single market.
In the markets where, over the last few years, we have been able to gain that full influence over the development of our business, we have inexorably been able to increase our market share. This chart fuels our belief that, through the market lens, our Brown-Forman 150 strategy offers great optimism to us in regard to our future and our ability to continue to grow internationally. With that, I'll pass it off now to Andrzej Żenota, who is here from Warsaw, Poland. Has English as his third language, and has responsibility for the growth of our business in Poland, Russia, the CIS markets, and some others of the Central Eastern European area. Andrzej, welcome to the stage, and we look forward to hearing your story about Russia.
That's a fast story.
Yeah, it was. I think that's Russia.
I think that is Russia, yes. Okay. Mark, thank you and welcome to the cold Russia. Just to give you information, it is -10 right now in Moscow Celsius, and it is snowing. It is good to be here in New York. As you know, Russia is the largest country in the world, with a population of almost 150 million people. Russia is also one of the biggest spirits markets in the world. Russia is by far number 1 vodka market with 222 million cases, and that is even a lot for the Polish person. Russia is also the third-biggest tequila market in the world, as well a very nicely growing whiskey market. Russia, of course, is a priority market for Brown-Forman because we observe a strong interest of the consumers into growing categories, which fits well into our Brown-Forman portfolio of brands.
In today's presentations, I am going to talk about three areas. First of all, I would like to give you a headline about the spirit category and the premiumization trend. Secondly, I would like to talk about how Brown-Forman portfolio is positioned to capitalize on the growth of the premium categories. Finally, I will talk about the role of the road to consumer. This is quite a busy slide, it shows basically the dynamics of the spirits category in Russia. This is what you can see here, that the spirits category, which is around 262 million cases, has been declining 1% over the last 10 years. The decline was driven by the sub-premium categories.
We can observe that over the last 10 years, a strong premiumization trend in the premium category has been growing by 14% on the annual basis, has been shifting its size to 3.6 million cases. If you look into the share of the premium category, into the structure, the biggest part of the premium category in Russia is premium vodkas. It represents around 17%. 70% has been growing around 13% on annual basis. The second-biggest category is whiskey, and the second-biggest premium category and the fastest category is whiskey, which is around 367,000 cases and is growing around 24% on an annual basis over the last 10 years. Finally, tequilas. Tequilas have been growing around 19% and is around 167,000 cases. It is worth to note that tequilas in Russia are premium tequilas. Tequilas market in Russia, 40% is represented by the premium tequilas. That is very interesting.
Let us have a look how we are doing, how we are performing on that market. We have a very strong portfolio of brands, which is very nice to working on the Russian market. Starting with vodka. Finlandia Vodka is number 1 vodka, number 1 imported vodka in Russia. It has also been outperforming the category over the last decade, and our goal is to continue the outperformance over next couple of years. We would like to grow parent brand as well to concentrate on the launching new innovations. Like this year, we have launched Finlandia Platinum, which enables us to capture the opportunity in the super-premium vodka category. Super-premium vodka in Russia is at 350,000 cases, a huge category. 2012 is also the first year of our quest of the tequila in Russia.
We believe with our strong portfolio of brands, with Herradura, which can play a significant role in the super-premium tequilas, and with el Jimador, which can play a role in the premium tequilas, as well as Pepe Lopez, we can become a very strong player on the market over the next couple of years. Finally, whiskey. Jack Daniel's is number one premium whiskey in Russia. That's based on the August/September results from ACNielsen. Jack Daniel's is also number one American whiskey in Russia, and Jack Daniel's still has huge potential to grow. As the appetite for the American whiskey is growing in Russia, we decided to launch Elijah Kentucky whiskey. Elijah will enable us to capture the opportunity of a standard whiskey category in Russia. We have very strong brands, which are very relevant to the kind of categories and the consumer interest in Russia.
It's also very important to have a very strong road to consumer. Let me put this a bit into historical perspective, what has happened over the last 10 years in Russia. We started the business in Russia only in 2004, and followed then three years by the ban on imports. Afterwards, we've been growing the business pretty much in line with the market, until to 2010, when we decided to explore the opportunity of a partnership with the biggest Coke bottler in Europe, Coca-Cola Hellenic. In 2011, we decided to go together with Coca-Cola Hellenic. That give us a great opportunity because Coca-Cola Hellenic can give us the direct access to around 60,000 stores in Russia, which are spread around on the great, huge territory of the country. The first results of that are really very promising.
We are currently approaching half a million cases, which is 60% more prior to the year before transition. Having a very strong portfolio of brands and having a very strong route to consumers, we also work very much on building a strong team in Russia. We have a very strong Brown-Forman organization, which is responsible for creating the strategy as well as building the right brand-building activations for our brands. In closing, we have a strong brand, we have very strong route to consumers, and we have a strong, dedicated team, which I believe will give us a great potential for the further growth. With this, I would like to move from the cold Russia into sunny Mexico, the biggest tequila markets in the world, where Jill Jones will show us a bit of the color, how the brands are going there. Thank you very much.
Here's Jill Jones. Thanks, Andrzej, and thanks for joining us today so I can talk to you about our successes and our opportunities in Mexico. Today, I want to talk to you about three main topics. First, I want to talk about the size and the composition of the spirits and ready-to-drink market and the recent growth trends. Then I want to talk about the power of our portfolio and the key brands we have to grow with. Then I want to talk about leveraging distribution that we acquired with our tequila brands that have helped us grow Jack Daniel's. First of all, many of you may know that Mexico right now is going through a bit of a renaissance. There was a great section in the recent The Economist about how well Mexico is doing, I won't belabor it, but I will say a couple things.
It is currently the 11th largest economy with a population of about 120 million, much of it skewing young, that's very favorable for Brown-Forman. As well, on the slide you see, the left side of the slide shows the spirits market and the composition by type of spirit. It's a 22-million-case market, the largest segment is at the bottom. It's 7.8 million tequila. It's the number one spirits market, it's growing at 5%. We're the number two player in tequilas. Also noteworthy, if you look at whiskey, growing at 20%. Of course, as much as around the rest of the world, Jack Daniel's is iconic and aspirational for Mexico as well, it's helping us gain market share there. If you look at the right side, the ready-to-drink category is 11 million cases.
You see at the bottom, the yellow, that 5 million cases is our brand, New Mix, which is a ready-to-drink that's made with our el Jimador tequila, it's been growing at 12%. Ready-to-drinks are only 1%-2% of the Mexican beer market, we think we have a lot of room to grow and have only begun to tap into the potential with our Jack Daniel's and Finlandia entrance into this category. I'm going to talk a little bit about our portfolio in Mexico. Our tequilas. We have the number one super premium brand in Herradura that has been benefiting from premiumization trends that have allowed us to grow double digits. In fact, this year, net sales are up 22% over and above last year that also had nice growth. We also have a strong regional brand in the premium segment called Antiguo.
It's the number one on-premise brand in Guadalajara, we believe it can expand nationally. In the mainstream category, we have el Jimador, which is the number two brand by value and volume. In the RTD segment, I mentioned that our New Mix is the number one brand, we've been able to leverage that knowledge and our position in the market to introduce Jack Daniel's. We introduced a Jack Daniel's RTD in 2009, it is already the number one premium RTD, the number four RTD overall. We also introduced Finlandia Frost, our Finlandia-based RTD, it is the second-largest vodka-based RTD, it is growing faster than its competitor. Of course, everyone loves Jack Daniel's. Mexico loves Jack Daniel's.
It's a Tennessee whiskey, as you know, growing in a Scotch-dominated market, we believe it can play in the super premium category, we have whiskeys that can play in the mainstream. If you notice at the top, in the super premium category, we have Jack Daniel's Single Barrel, Gentleman Jack, and Woodford, all that we believe can do nicely in the Mexican market. In the aggregate, this portfolio has returned to growth mode over the last two years, allowed us to grow at 13% in fiscal 2012, and 10% year-to-date. Let's look specifically at the success we've had leveraging our distribution to grow Jack Daniel's. If you look at this chart, I'm going to kind of walk you through it. We've converted fiscal year 2001 to our base year, we have it at 100.
The brown bars are our spirits volume, the blue bars sitting on top of the brown bars are our RTD volume. The green line represents our net sales. Until 2008, we were with a third-party agency doing our distribution. In 2008, we brought Jack Daniel's into our Mexican distribution that we acquired with our tequila brands. You can see the inflection point there. You can see that we grow from, if you just look at 2008, we get up to something that would be 56 times what it was in the base year of 2001. If I just kind of eyeball it here versus when we moved it in in 2008, you see a significant growth, I'm going to say at least 10 times.
You can see that we have a great portfolio in a growing market with a good economy, a good owned distribution, and we have wonderful people that we believe and are confident will continue to deliver growth in this segment. With that, I'm pleased to announce and introduce you to Mike Keyes, President of the North American group, to discuss how we have accelerated our growth in this market over the last two years and to explain how we have confidence we will continue to grow. Mike?
Thanks, Jill. I guess I'd just start out by saying business is strong in the U.S., it is a great time to be with you to share our success over the last two years in both gaining market share, and also in accelerating the growth rates across our portfolio of brands. Mark McCallum had talked about, he had used some great words, attractive, competitive, valuable. Another word I would use for the North America U.S. spirits business is innovative. If there are a few things that I'd like you to take away from the presentation today, they are these. One, the spirits category has been improving in ways that Brown-Forman is uniquely positioned to benefit from. Brown-Forman used the challenges of the recession to ramp up innovation, to create opportunities, to improve our overall business.
With the success in our innovation and with the current environment that we're operating in, I'd like to leave you today with the confidence that we will continue our top-tier performance, that we are gaining and winning in the marketplace. As we talk about the environment, there's one observation that is very important to Brown-Forman, that is that the growth trends for premium brands are outpacing both the total distilled spirits category and the value in popular price segments. This is particularly beneficial to Brown-Forman, where 87% of our portfolio in the U.S. sells for more than $15 a bottle. In fact, Brown-Forman is the most premium of the top five spirit companies ranked by value in Nielsen. With the economy slowly continuing to improve, spirit brands are returning to taking more price than they have in recent years.
Brown-Forman has been taking more price than the market in general, again, according to Nielsen. Jack Daniel's is supporting its price increases by building brand equity in a number of ways in the United States. This year, we have significantly increased our media expenditures and our presence by placing advertising on network television and by placing out-of-home spectaculars in key markets across the United States. This creative use of ad placement portrays the look of a leader and further helps us to premiumize the brand to our consumers. Jack Daniel's is blessed with an ability to balance its storytelling. I think John did a great job of taking you through how Brown-Forman and Jack Daniel's use authenticity, integrity, tradition, Americana, and independence to bring our advertising alive.
With the increasing importance of multicultural consumers, I'm also proud to say that for the first time in our history, Jack Daniel's is placing advertising on Spanish language television. Innovation has also been significantly increased across our portfolio and within the Jack Daniel's family of brands. This year, we're introducing a number of new super premium offerings that reinforce the small-town, handcrafted credentials of the Jack Daniel's distillery. Examples include Holiday Select, which is a brand that kind of fits into that holiday Christmas barrel tree program. We make a large donation, and the program revolves around Operation Ride Home, which provides our cash-strapped soldiers with a chance to return home for the holidays. Another great product that we are introducing is Unaged Rye.
It's currently being introduced in Lynchburg and throughout Tennessee for the holidays, and it will roll out in the rest of the United States in February. John has already told you about the excitement behind the Sinatra bottle, and I just reiterate what John has said. If you happen to find yourself in Las Vegas or down at the distillery, please pick up a bottle. You won't be disappointed. We have also increased the investment that we put behind our digital marketing initiatives, and as John pointed out, this is paying huge dividends. Jack Daniel's now has over 3.5 million friends on Facebook in the United States, and we have the highest engagement scores of any spirits brand in the world.
We will continue to use our partnerships, including our sponsorship of Grammy Award-winning Zac Brown, with messaging that reflects the values of Jack Daniel's by creatively relaying the importance of responsible consumption of our products. We've also increased our presence in professional sports venues by partnering on advertising and responsibility initiatives with groups like Be My Designated Driver, and these affiliations are very visible and important to our key legal drinking age to 35-year-old male consumers. Jack continues to bring iconic and integrated marketing programs to the marketplace. Our summer independence program reminds consumers that Jack is the authentic American spirit. Our holiday programming emphasizes the fact that Jack has a tradition of bringing family and friends together, and our music programs reflect the historical role that Jack has played in nurturing pop culture throughout the world.
Bourbon and Tennessee Whiskey have significantly outperformed total distilled spirits over the last year. As you can see from the slide, this is particularly beneficial to Brown-Forman, where over 60% of our company's retail value in the U.S., as measured by Nielsen, resides within this category. We have a great portfolio of brands, and not only is Jack Daniel's innovating, but many of the brands in this set are also innovating. Honey has been the most successful new product launch in our history, and I'd like just to take about a minute and a half to show you how we've supported the launch of this brand within the U.S.
People fear change. Change brings new people. How do you introduce a new audience to Jack Daniel's? How do you get existing Jack drinkers excited about a change to the whiskey they love? Tell a story about a honeybee, rock and roll, and whiskey. We strategically started the campaign by building lore around the origin of the honey on Facebook. News of Tennessee Honey spread with the endorsement of Jack's loyal and passionate fans. We designed a bee with Jack Daniel's in its DNA and made a national TV spot out of it. For the soundtrack to the campaign, we commissioned The Stone Foxes to cover Slim Harpo's "I'm a King Bee." This innovative take on a classic blues track was perfect for the first flavored variation on Jack Daniel's.
Using Twitter's real-time platform, we instilled a sense of urgency to get fans to find the product and be among the first to try it. We needed to reach a broader group with news of Tennessee Honey, so we mobilized our honeybees to tease our origin story on sites relevant to the newer, non-whiskey drinking target. Non-Jack drinkers are now Jack drinkers. Jack drinkers, well, they're still Jack drinkers. Enough said.
Early in its first year, Tennessee Honey became the number one brand in the growing flavored whiskey category, and it outsells Red Stag and American Honey combined. As John mentioned, Honey was also chosen by Impact Magazine as the best new brand introduction of 2011, and it's already become a top 100 brand in the U.S. The brand has accumulated nearly a million new friends on Facebook, of which half of these are incremental to our existing Jack Daniel's franchise. As we approach 2 billion media impressions, we certainly have extended the reach of the Jack Daniel's family of brands by bringing new consumers who haven't used Jack Daniel's into the Jack Daniel's franchise. Earlier this afternoon, Lawson showed you the new Southern Comfort television spot, and we're very excited about the work that's going on to revitalize this brand in the U.S.
As with many of our brands, we began shifting resources to media over the last year. Southern Comfort is certainly maybe the biggest benefactor of that move. The new Southern Comfort Whatever's Comfortable campaign has both significant media and digital components, and it's captured the attention of U.S. spirit consumers. We believe that the consistent delivery of our message with 36 weeks of television advertising will drive unaided brand awareness, and that this schedule, coupled with the new creative, and with exciting new line extensions like Bold Black Cherry, will continue to grow the brand. The results have been dramatic improvements in our U.S. sales and value trends. I'm proud to say that after several years of decline, the Southern Comfort family was up 3.2% in Nielsen value for the last three-month reporting period.
If I take you back to my opening comments, there are a few things I'd like you to walk away with. We're growing again. We're growing value share. The spirits category continues to improve in both the on and the off-premise. The shift in consumer preference to both premium spirits and to bourbon and Tennessee whiskey is real. If you combine that with our ability to take price, it's created a very positive and enviable position for Brown-Forman in the United States. I'd like to thank you all for your attention. We're now scheduled for a break. I would ask if you could return to your seats by 3:20 P.M., that'd be terrific. Thank you very much.
Brown-Forman Chief Financial Officer.
Good afternoon, everyone. Let me add my thanks to you all for joining us this afternoon. Before the break, we covered quite a bit of material on the opportunities that we see for our brand portfolio globally, and especially outside of the United States. I'll put a financial context around that, and I'm also planning on adding a little bit of color around the North American whiskey opportunity, some of the premiumization trends that we've been seeing, our international expansion, and then I'll talk a little bit about our capital deployment and then total shareholder return. So let me start with this slide. It's a slide that many of you have seen before. It basically summarizes the results of everything we've talked about so far. I do think it's a great example of what we mean when we talk about how we think long-term.
This chart basically shows you net sales, gross profit, and operating income going back over a 35-year, a 25-year, 15-year, and 10-year time horizon. The one thing that I'll point out is that you basically see very consistent performance in the high single digits across all of these time frames and across all three metrics. For the last five years, you'll see we have not quite performed up to these historical levels, as you all know, during that time, we had one of the biggest, recessions that we've seen in modern times. With that recession, we saw the move going from the on-premise to the off-premise. We saw trading down versus trading up. We saw competitors competing more on price than on brand building. We saw the inability to raise prices to recoup costs. In spite of all of this, we still grew.
I would say that one of the reasons for that growth is to a large extent, a testament to much of what you've seen up here in the course of the day regarding our geographic distribution. To the extent that we've diversified so much geographically, there were a number of markets that were able to buck those trends during that time. More recently, as I'm sure you all have heard in our recent conference calls, we are performing back to closer to those more historic levels. In fiscal 2012, we had underlying operating income and underlying sales growth at 9%. More recently, year-to-date through October for fiscal 2013, our underlying sales grew at 8% and our operating income at 12%.
Also, as you've seen so far in fiscal 2013, we've talked a lot about being focused on driving high single-digit growth through better balance in pricing and volume growth. Prior to the downturn, we generally were experiencing price representing about one-third of our revenue growth and volume the remaining two-thirds. Those are our goals now here, as we've stated for fiscal 2013. When you look at the performance year-to-date, our price mix is up over two points on the underlying growth of eight. We are definitely headed in that right direction. Let me talk for a minute about gross margins. This slide illustrates our gross margin over the last 10 years. As you can see, we're off a bit from the peak in 2006, although in recent years, gross margin basically hovered around 50%.
Coming into this fiscal year, we've talked about our focus and how we are using pricing to support and elevate the premium position of our brands, also importantly over time, to recapture some of this lost margin. As we reported last week, year-to-date through October, our gross margins are up 260 basis points, and out of that half, or 130 basis points are coming through the organic improvement that we're seeing through price mix and through reduced costs. In addition to pricing opportunities, let me also add some color on the resurgence that we've seen in the North American whiskey category. As you can see in this pie chart, our portfolio skews towards whiskey. We believe it positions us well to outgrow the industry as we believe that the revival of the category, particularly for bourbon and U.S. whiskey, is still in its early stages.
We believe that this is true both in the U.S. as well as globally.
If we look at U.S. whiskey and bourbon volumes on a totally global basis, we've seen growth since approximately 2000. More recently, according to IWSR, this most recent information, 2011, bourbon was the second fastest growing category. What do we think is driving this global growth? Well, we believe that one of the biggest reasons is the enormous global appetite that we see for Americana. Jack Daniel's is the premium imported American spirit brand, as I think John Hayes did such a great job highlighting earlier today. If we look specifically at the U.S. market, Mike shared some of this with you as well. On value terms, when you look at U.S. whiskey and bourbon, it's basically been growing faster than the total distilled spirits for the last several months.
We believe some of this renewed interest has to do with some of the interest that we've seen in craft distilleries, but really, to a large extent, the early stages that we believe that we're in terms of innovation. As a great example of that, which you saw earlier with Tennessee Honey, which year-to-date has grown at a 50% rate, and in the U.S. has continued to grow this year at 20%. Let me turn for a minute to premiumization. As you've seen, Brown-Forman has one of the most premium portfolios in the industry, with 90% of our total retail sales value at premium prices and above. We believe with that, we're also uniquely positioned to capitalize on the premiumization trends. We start in the developed world, and you look at all the developed markets together.
What we've seen is the further you move up the pricing ladder, the greater the growth. In this chart, we have brands priced premium and above growing in the aggregate at 7% compounded rate, compared to those at standard and below growing at 4%. When you compare that to the emerging markets, the emerging markets are actually more striking in that the high end has been growing at double digits and at roughly twice the rate as the standard and below price points. We really believe we're only beginning to tap into the enormous potential around the world that premiumization has to offer. Let me move to our international expansion. As Mark showed earlier, our mix of business has been undergoing its own diversification for some years now. 10 years ago, as he said, 23% of our revenues were outside of the U.S.
In the year ended with fiscal 2012 in April, that number was 58% and was driven by a 19% CAGR over that time frame. In fact, when you look at it over that last decade, 85% of our growth has come from markets outside of the United States. Again, we believe we're early in penetrating this global opportunity, particularly when you consider this in light of the fact we have some of the smallest shares of the total non-U.S. business when you consider the large spirit companies. Before leaving this slide, let me just make one quick comment on the U.S. business. U.S. sales have grown during this time frame.
It's been albeit at a relatively slower pace, but when you look at the more recent results, as Mike was talking about, year-to-date through October, our underlying sales growth in the United States actually now approximates our global growth rate over the last 10 years. Let me talk for a second about this long runway for growth. Oftentimes, I'll get the question: how long do we believe we can continue to outperform the industry? How long is that runway? Mark shared a similar slide looking at specific individual countries. This wraps them all up together and actually looks at the global marketplace. When you consider all of the volumes of spirit brands sold across the globe, Brown-Forman today only represents about 1% share of that market.
When we think about that and the fact that this market continues to be relatively fragmented, we believe we continue to have substantial opportunities for growth as we increase our market share around the world. With that, I'm going to segue and talk a little bit about our capital redeployment and our total shareholder return. This chart looks at cumulative cash flows for 10 years through the end of April this past year. Over these 10 years, we generated $4.6 billion, mainly from cash from operations. Of this $4.6 billion, we've reinvested $1.6 billion back into the business, either in the form of capital reinvestment or in acquisitions. We also paid a steady and growing dividend, which was roughly another third of this $4.6 billion. Finally, we were able to pay both special dividends as well as buy back some of our stock.
When you look at it in total, we basically reinvested one-third and returned two-thirds to the shareholders. Our priorities for deploying cash remains consistent with our philosophy to first, we reinvest in future organic growth. We look to grow the dividend as our earnings grow. We search for acquisitions that bring us new brands or new capabilities. To the extent there is excess cash, return it to shareholders via share buybacks or through special dividends. After paying the special dividend that we recently announced, our debt to EBITDA will be roughly about one and a half times, which we believe leaves us with very ample debt capacity without jeopardizing our investment-grade rating. What are our plans today and what have we been doing recently?
Well, as I said, we start by looking for opportunities to invest behind our business, targeting long-term returns that can be multiples of what is invested. Our business model really is quite efficient relative to the industry, with about 2%-3% of sales on average being reinvested in CapEx and usually generating very healthy ROICs. In fact, our industry-leading ROIC has been in the high teens for years and was over 20% during the most recent 12-month period ended October 31st. Next, we consider the dividend. We believe that dividends are important to our shareholder base. We've paid a dividend for 67 years, and we've steadily increased it for the last 29. A few weeks back, our board announced a 9% increase to an annualized payout of $1.02 per share. We look at other ways to invest behind the business.
While we haven't made a large acquisition lately, we continue to look for ways to strengthen our leading position in whiskey. We'll also look to ways to strengthen our vodka portfolio, such as the addition of Maximus last year. We're also very interested in any type of local brand opportunities that could play an important role in our future, something similar to what you saw earlier when we talked about Mexico and the distribution business there that we acquired back in 2007. It's important to note we continue to view acquisitions as an opportunity for Brown-Forman rather than a necessity. We'll continue to execute them only when we're confident that they really create long-term value for all of our shareholders. Finally, turning for a minute to how we return excess cash to our shareholders.
As you saw before, over the last 10 years, we've returned it through a combination of buybacks and dividends. This chart shows you the dramatic reduction in our shares outstanding as a result of our history of share buybacks going back to 1987. More recently, towards the end of November, given the strength of our balance sheet and our strong cash flows, we announced a special dividend of $4 per share that will be paid in late December. As in the case with many other family-controlled public enterprises, we focus on delivering the greatest returns for our stakeholders while minimizing the risk profile. This chart illustrates one way to look at that. It shows the outperformance of our total shareholder return compared to the S&P 500 over 10 years against one measure of risk, a relatively lower average debt position over that time horizon.
Here's another way to think about it. This slide looks at the highest returns with the lowest volatility or risk, in theory, what's known as the Sharpe ratio. In reality, it means positioning the company to endure with a careful eye on costs, a strong balance sheet, and a long-term view to building our brands, measured in decades, not in quarters. The first bar in this chart illustrates the number of companies that outperformed the S&P 500 over the last 10 years. There were 292 companies that accomplished that, and Brown-Forman was one of that 292. The second bar shows the number of companies in the S&P 500 that both outperformed the index but also had a beta less than one, an example of lower risk, but higher reward. There are 139 companies represented here, and Brown-Forman is one of these 139.
The third bar represents the number of companies in the S&P 500 over this period who had both higher returns than Brown-Forman, but also a lower beta than Brown-Forman. Only six companies were able to outperform Brown-Forman on this metric. Looking at it a different way, Brown-Forman outperformed 494 of the 500 companies during this period in terms of delivering higher rewards for lower risk. One way that we like to think about this is that we believe it demonstrates our approach to the business, targeting higher risk-adjusted returns through good times and bad, and it's a strategy that we believe has allowed us to thrive and endure for 142 years. Let me summarize the reasons that we believe Brown-Forman continues to be a great long-term investment.
It begins with one of the best portfolios of premium brands in the world, focused on categories that we believe are well-positioned to outperform. Second is the unbelievable power of Jack Daniel's, the fourth-largest global spirits brand, growing in the high single digits and just hitting its stride in markets outside of the United States. We believe the runway for Jack Daniel's is long, and we are focused on that prize. Third, while our U.S. business is growing nicely, it's our growth outside of the U.S. that has been driving results and will continue to as we increase penetration in the emerging markets. Fourth, it's our incredibly long-term track record of being strong stewards of capital, investing in the future, acquiring opportunistically, and returning cash to all of our stakeholders. Then fifth, the competitive advantage that we enjoy through our engaged and passionate long-term shareholders, the Brown family.
The family, like most of you in this room, want to see sustainable long-term earnings growth, dividend growth, and capital appreciation. With approximately 69% of the voting stock, their support has allowed us to focus more on the long term and ensure that the company endures for future generations. This, we believe, is one of the company's many competitive advantages, and one that has driven some of the amazing numbers that I've been able to share with you today. With that, I'm going to turn the stage over to our final speaker, Garvin Brown IV, our Chairman of our Board, and a fifth-generation Brown family member. Garvin's going to share with us his perspective on the family, as well as some of the evolutions that we've seen over the last few years as it relates to the company, its management, and its board. Garvin?
Thanks, Paul. Thank you.
Yeah.
Thanks. Good afternoon. Can you hear me? Good afternoon. It's a treat to be here today with all of you. I recognize voices from the earnings calls, and of course, many names and even some faces. Thank you for joining us this afternoon. As you can imagine, in the course of any year, I spend a lot of time talking about Brown family governance, our board of directors, and even our company. I spend a lot of time talking also to investors. I live with some investors, and I'm related to many, many more. It's not always that we've actually taken the family governance topic and brought it out into the public sphere, and it's not often that I've had a chance to talk to our public investors and analysts about this subject.
I think if you're in a family-controlled public company and trying to judge what's family and private and what's appropriate to go in the public, it's a challenge. There's no textbook on our governance. I've looked for one, I can assure you, but there is none. Lately, with all the work that we've been doing, we thought maybe that it would be appropriate to come into the public and share some of this. Paul and I, the board and I, my family and I think that it's probably best practice for a family-controlled public company to come share this sort of work. I think that you're owed the respect of an explanation as to how the Brown family organizes itself. I even think that you'll enjoy seeing this work and that you'll see how it helps your investment.
For those of us who work on this topic, we always start with these three bubbles, board, family, and company. Starting with the company, I'll say that in the old days, it seemed a lot easier. You could put board, family, and company all on the same slide in one photo. We even had an old approach to corporate governance. The two older gentlemen sitting in the middle were brothers, and what they did actually was marry two sisters. The other three were their sons, and they were actually also double first cousins to each other. I think it probably made family politics a little bit easier to manage. The man on the far right is actually my grandfather, who died just before I was born. On the far left, sitting up a little bit higher, is Lyons Brown.
Lyons brought his three sons into the company. For those of you who have been around for a while, you'll recognize, I think at least two of them, if not all three. On the far left is Lee Brown, who was our Chairman and CEO, really, as I grew up in the '70s and the '80s, and into the early '90s. He went on to become the U.S. ambassador to Austria, and actually lives in New York now. In the middle is Martin Brown Sr., who for 25 years, ran the Jack Daniel's business and really put it on its sure footing that you saw in John Hayes' slide from the early days up until '86. On the far right is Owsley Brown.
If you're about my age, Owsley is the one from that generation who probably represents the totality of that generation's leadership, just because you wouldn't have known the other two as well. A lot of what we saw here today is a realization of Owsley's vision and his goals, not just in the business, but in the quality of the people that have been standing on this stage. I often think if there's one thing, and he gave us many things, if there's one thing that Owsley gave us, it was actually an uncanny success at succession planning. Owsley reached into the organization, probably going back to the late '80s and early '90s, and could recognize a great talent when he saw it.
It was back in 2003 that Paul Varga took over our beverage company from Bill Street when he retired. It was in 2007 that Paul took over as our corporate Chairman and CEO. Actually, some of the numbers that Don was showing today are 10-year CAGRs. Paul's just one year shy of those being his CAGRs, but he's really been running our beverage business now for nine years. On the board side, we've had some changes as well. Of course, I joined the board six years ago, along with two other cousins from my generation, the fifth generation. On the far left, you can see one of them, Sandra Frazier. Next to her is Jim Welch, who joined the board around the same time, who's here today, and you'll see him afterwards, the Vice Chairman of our company, for cocktails.
Next to Jim is Martin Brown Jr., the son of that earlier man in the black-and-white photo. It's not just family members on our board, of course. I'm happy to say that we've got a lovely new set of independent directors. On the prior board, many of our independent directors coincidentally were born literally within 18 months of each other. We had this amazing thing where 1938, I think, was the bumper year for Brown-Forman, where they were all retiring at the same time. Today, we've got a wonderful net new set of independent directors. They bring enthusiasm, excitement about the business, excitement to work with Paul and his team. They also bring into the room their life experiences from places like McKinsey and P&G and GE and other companies.
The richness of conversation in that boardroom reflects all the things that you would hope to find in the boardroom of such a public company. On the family side, I don't know how many of you have given PowerPoint presentations about your family, but I think we've figured out a way to describe this in a way that I hope is meaningful for you. Like a lot of families, of course, we have our matriarchs that are legends in our hallways. On the left is George Garvin Brown's wife, Amelia Owsley, from whom we have that name, and she was from a wonderful family in Kentucky. We've also got Sallie Brown there next to her, who was Lyons' wife and recently passed away at the age of 100. Sallie grew up with her father abroad. He was a military attaché.
She grew up in Vienna between the two world wars, moved to Kentucky. Probably not a common Kentucky distiller's wife at that time. She was fluent in German, French, spoke Italian and Spanish pretty well, and some Serbo-Croat, having summered in Sarajevo, as you did in that day and age. I often think that the breakfast conversations were probably unique for a Kentucky home in the 1950s that she would've generated. Like a lot of families, we've grown over time. Here's one way of looking at the family tree. I'm in that bottom row. There are about 40 of us in the fifth generation. 17 of us are involved some way with Brown-Forman. There's three of us on the board, another nine inside the company. I straddle both those worlds.
There's many others who are involved in this family committee that we have, that I'll talk about in a second. Actually, I think even beyond formal family committee, we've got others that volunteer on its subcommittees. There might be 26 of us now between the fourth and fifth generation who do stuff on Dixie Highway with Brown-Forman in the course of a year. That's what we look like. That was a reunion a few years ago. Some young kids from the sixth generation sitting up front there as well. You can see Aunt Sallie in her trademark Austrian wool coat, sitting there on the bottom left in her armchair. What interests us at Brown-Forman? Obviously, look, we do follow the share price. We are interested in the financial success of the company. We've had to live through things in the marketplace, as you all have.
None of us will forget, of course, the success at the turn of the century of companies like Pets.com, when we, as family shareholders, were going to cocktail parties and feeling so unfashionable with our stake in this old industry. We made it through that period, and of course, don't have any regrets about not having diversified out of it in those days. The point here is that, look, we all love following the share price, but you all know better than I do that it doesn't always reflect underlying value in a company. BF150, our long-term strategy plan through the year 2020, which now, of course, is just an eight-year view, is something that probably approaches, just approaches the timeline that we would like to assign to our investment. We warm easily to that sort of a long-term strategy plan.
In terms of brands, look, obviously, we understand Jack Daniel's. Those of us in the company have worked on it. Martin Brown Sr. lived in Lynchburg, Tennessee with his new bride in the '60s. We get Jack Daniel's. We get Lynchburg. Our roots are in Kentucky. We're originally from a small town called Munfordville, halfway between Louisville and Nashville, from which we moved in the 1860s. We understand places like Lynchburg. In the rest of the portfolio, though, we stubbornly see a Jack Daniel's waiting to break out. When we walk into an account, we do look for Chambord on the back shelf. We are interested in line extensions on Finlandia and in the wonderful new package change for Herradura. What do you do with all those people and all that enthusiasm?
Do we all run into Paul's office and share with him our opinions on the Chambord package change? I mean, we honestly couldn't fit through the door these days. I'm sure you would agree, it's probably not the best use of Paul's time to meet with all of us about the Chambord package change. I think of family governance as that intersection between enthusiasm and what's right for the business. Back in 2007, as Owsley was retiring, we were all reading the papers. In any year, the papers will be littered with stories of families that I think haven't gotten governance just right, let alone for a public company with non-family shareholders. We put a lot of time and energy into how to better organize ourselves for the future. We've got something called the Family Committee now that dates back to 2007.
It has on it a number of family members from all walks of the family. Paul and I co-chair the committee. It has subcommittees that tackle governance, education, communications, and actually as well, a topic of interest for the family and the company, environmental sustainability, which is part of the inheritance we have from some of our work in the wine business. That's what we look like. Our photo's often in the annual reports. You can see in there, of course, the two co-chairs, Paul and myself. Ernie Patterson is next to me. He's here today, Director of Family Shareholder Relations. You'll see him afterwards, who helps organize so much of this work, and other members of the Brown-Forman team here. On the far right, actually, is Lee Tatum, who's also around today and works for Paul. We divide our work into something called a curriculum map.
We educate the Family Committee on the company and the industry, on governance, on ownership topics, and also on family and community topics. We have a Family Constitution that we wrote, and that 98% of those north of 18 approved. The other 2% have since explained to me that they missed the deadline and other things. The Family Constitution has language in it that should look familiar to you. It looks and sounds like a lot of Brown-Forman work. It's thoughtful. It talks about the long term, and it talks about the company's commitment to a culture that prides itself on independence. This is what we look like at our summer meetings when the family comes into the annual meeting.
In this shot are people who are on the board, working at the company, people who don't work at the company, but whose father might have been on the board or whose mother might have been there, too. There's a woman whose dad was on the board for 40 years, sharing a beverage with our CEO. There are multiple generations, including, of course, these young kids from the sixth generation. Teenagers here listening actually to John Hayes present on Jack Daniel's along with their great aunt and their dad. Little kids for whom we design different things so that they can get their heads around this industry and what it means. Obviously, they're not quite into ROIC just yet, but we're working on that. They'll get there. I like this one of these little girls.
Actually, for me, it's a much better symbol of a family in the 21st century than that black and white that I started with. There were no girls in our old photos. These four actually live across eight time zones. There are at least two passports amongst them, three different accents. They're Jewish, Catholic, Protestants, and Greek Orthodox. None of them have the same last name, but all of them come to Brown-Forman every summer. They've got their little Brown-Forman lanyards, and this is what they associate with their company and their extended family. Back to that family tree. Here it is as a blank slate. I like to look at it through the lens of engagement with Brown-Forman.
The traditional lens is to look through the generations at the people that have actually worked at the company or who have been on the board, or who've worked at the company and moved on to other things. We also had a Lenox board when we had the Lenox company, which was another way to engage family members who didn't work at the company, or who may not have been on the Brown-Forman board. The color coding here, that's me with the dotted red over here, and different colors. As a board chairman, the Chairman and CEO are the solid red lines. This is one way, of course, at looking at family engagement.
Thanks to the work of the family committee and other committees, like the major gifts committee of the company, we've been able to color in, literally color in more people on this family tree to demonstrate their engagement and involvement with the business. If you add in internships, you get even more colors. We've been in the press also, I'm pleased to tell you, not the sorts of stories that we were reading in 2007, but in the pleasant stories, saying good things about how we've organized our family governance in a manner that benefits all shareholders. Some people like to quote the Bible, others prefer Shakespeare. I like Jack Daniel's. I remember a great ad, from when I was working on Jack with Mike Keyes, actually, and John Hayes, Mark McCallum was CMO at the time.
Lawson, actually, the whole old crew is here, was our financial analyst. It tells a story of the growth of a brand from a small town. It's enjoyed in 135 countries at that time, made in a town with one stoplight. How does a business from a town with one stoplight grow into the numbers that you've seen today? Of course, a team, a commitment, a playbook. It's brand equity for Jack Daniel's. For me, that's a great metaphor. This brand has grown around the world and hasn't lost its way.
I think that for the Brown family, as it grows over time, across time zones and nationalities, gender, ethnicity, that we've pulled together something here, much like Jack Daniel's, a set of rules, a set of cultural practices that keep the family together in a way, not just for itself, but in a way that benefits all shareholders, whether they're family or not family. I think that this work today also will allow the company and the family to grow its way around the world without losing its way. You've seen a lot of the team today that have helped grow our business over the years. On the family governance side, I'd be remiss not to applaud the role that actually Paul has played in forming all of this work.
He sat a bunch of us down in the family in 2007 at Owsley's retirement party in Los Angeles, we all had a heart-to-heart about this. Look, what are we going to do? Are we going to be like those people in the newspaper, are we going to create something different? With his partnership, we've created something different. You've seen some of his CAGRs today, almost to 10 years. In this work, you've also seen some of his leadership. With that, please help me welcome back to the stage our company's chairman and CEO, Paul Varga.
Garvin. Thank you. Very nice of you to say that. Thanks. Well done. Well, it's fun. Before we go off to Q&A, I can just reflect a little bit on this last couple hours we've had here. I just can't tell you how enjoyable it is for me personally to not only hear such nice things, thank you, Garvin, but to see Brown-Forman sort of flow over you for two and a half hours. You saw all these half points and references, I was thinking about a couple of things that hit me during it. It strikes me that you all know our numbers. We're a public company. We report them. We do our very best, you all, through Q&A and the formal reporting to give you a great transparency into how the company is performing and what we see ahead of us.
We try our best to do that. You always are interested in more. What we wanted to do today that I hope you feel we accomplished was to give you a better understanding of why the company is performing as it is today. A little bit deeper look than we can sometimes do around an earnings release or that kind of thing. You get to see lots of charts and trends and graphs, you also think about, you get to see some people in Speedos, you get to see barrel trees. You get to see other kinds of things that actually do inform you as to how you might think about Brown-Forman and what it's trying to do out in the world. We basically wanted to improve your understanding, as investors or potential investors in the company.
Most importantly, we wanted you to share some of the enthusiasm we have for the opportunity ahead of us. Don had a slide there that talked about the company, and I had some of it at the beginning. You probably saw variations of this throughout the whole thing. We really, in terms of the. We focused a lot today on the categories where we're present and how we're currently represented there and what opportunity we see for them and then the places where we do business. I want to thank those who gave just a short glimpse, Anje into Russia, Jill into Mexico, Mike into the U.S. We could have gone for hours, you all, on success stories in France and other places around the world that we think you'd enjoy, and maybe we'll do it another time.
More than the opportunity, we want you to share with us the feeling that we believe we're really well-positioned to seize what's ahead of us, too. Just a quick listing of some of the things I heard were: a premium portfolio, of course, led by Jack Daniel's. I am extremely biased in this point of believing it's the world's finest distilled spirits brand. I really do. I think there was this chart I love that John showed. There is no other brand that is above $20 a bottle that sells more than 10 million cases in the world. There just isn't.
We are fortunate enough to own it, and we believe it is just beginning to scratch the surface in terms of its geographical reach, but also some of the very appropriately done, I think, line extensions, and the Jack Daniel's Tennessee Honey story, I think was a good example of that. We also believe we have the financial resources and flexibility to pursue this opportunity, as well as a nice track record that Don took you through related to our history of financial stewardship that has been very shareholder-friendly. I do think as well, Garvin's piece here of having the family so well-organized and so supportive of what we're trying to do. Just by its own nature, exposing you to so many of our team here today. Some are very familiar faces, and should be to you over the last decade.
Others are some new faces that we hope you'll get a chance to talk to here when we break after the Q&A. We hope you share our belief that this is a great management team that is fortunate enough to lead another 4,000 or so people around the world to the sort of results that we've been able to share with you here today. For those of you who are currently Brown-Forman shareholders, we hope you're even more committed after today. Those of you who are not but are considering. Well, Garvin said you can't join the Brown family, but maybe you can join the Brown-Forman family, and we hope you're as enthusiastic about the future of the company as we are. With that, Don and I and some others are going to get organized here real quickly to answer your questions.
Just so you'll know, we will probably direct a number of them, too, and feel free to ask questions of individuals who you saw on stage here today. Thank you very much. I think, let me just see how this is organized. I think we have a handful of microphones that they'll be probably spread throughout the room where you all will be able to use those to ask questions so that the entire room can hear you. This is also being webcast, so it'll help with the technology we're using today.
Hi. Hello? Okay.
Yeah.
Judy Hong from Goldman Sachs.
Hi, Judy.
I wanted to just ask about the Jack Daniel's line extensions. It sounds like you're maybe accelerating sort of the pace of some of the innovations there. If you can just talk about if you have certain targets in terms of what that mix looks like between the Tennessee whiskey versus the line extensions, and how do you sort of balance your ability to maintain the brand heritage and not get line extensions too different from the core brand as you go forward?
Okay. Just as a test, was everybody able to hear that question sufficiently in the back particularly? Okay. This is an often asked question about how we balance the extension of what we would consider to be the world's most valuable distilled spirit brand. You do it with what we consider to be great thought and care. As a reference point to the flavored Jack Daniel's Tennessee Honey that you referenced, you should know that as an example for the United States, when that was introduced, it will be two years in the spring, I guess, since it was introduced. That was really the first full-strength spirit line extension from Jack Daniel's, I think, since the late 1990s. It had been 15 years. Our track record of full-strength extensions particularly, we've been pretty careful with it.
I think it showed, to be quite honest with you, and it came on a couple of times during the presentations, that not only have we been successful in introducing Jack Daniel's Tennessee Honey in the United States, but if anything, we feel it has had a positive accelerating effect on the Jack Daniel's trademark. The true test will be over time, and it's still only been a couple years here, and we'll continue to watch it closely, but how does Jack Daniel's Tennessee whiskey and how do people feel generally about the trademark? You monitor it. You try to do the best job you can with it. I think we addressed this on our earnings call last week. We plan to take it quite cautiously so that we do exactly what I think you're encouraging us to do, which is to balance it well.
Any others? Mike, you've been involved with it. John, you yourself. Any who might know things about maybe the consumer data that we've seen since the introduction, that sort of thing.
I'd like to start as well saying we don't do a lot of it. We've been doing a bit more. If you go back to Gentleman Jack Single Barrel RTD has been over, frankly, almost a 20-year period. This is just another new one of, frankly, through a lot of consumer research that, as I said, we're trying to recognize, identify new consumer segments, new occasions for the trademark. This is just another example of, as I said as well, also, we find that people actually have a great respect for Jack Daniel's and like it, but just Jack Daniel's Black Label as a whiskey brand, some people just don't like whiskey. We found Tennessee Honey be an example, where our data is showing us that probably over 50% of people that are enjoying Tennessee Honey are not Jack Daniel's drinkers.
This is more of within women, for sure. The Latino community, we're seeing great success here. African American community. Again, in our quest to open up the brand to new consumer segments and occasions, again, very carefully studied, and we're very optimistic for the continued success of this brand. Mike, you want to add anything?
No. Other than from my own personal experience, John will laugh, is I follow Jack Daniel's on Twitter. Anybody around the world that talks about Jack Daniel's, you just pull it up, and it pops up, and you see who it is. There's a picture. Since we've introduced Tennessee Honey, the faces on Twitter are markedly different than they were for Jack Daniel's. You have more, as John said, more women, more Hispanic Americans. The only thing I'd differ with John on a little bit is that they don't drink Jack Daniel's. I'd like to say they don't drink Jack Daniel's Tennessee whiskey yet.
Thank you. Go ahead.
Bryan Spillane from Bank of America Merrill Lynch.
Hey, Bryan.
How you doing, Paul?
Good.
Question about international scale. I guess this goes back to one of the slides that Mark McCallum put up, I think maybe one of the ones that you had as well, Don. You've done well the last 10 years or so, regaining control of distribution in a lot of markets and also just expanding your footprint. I think there was a slide there where we have 40 markets with 50,000 or more cases and 24 with more than 100,000 cases. Can you give us some idea where those markets stand relative to the corporate average in terms of your profitability, so maybe operating profit margin? I guess what I'm trying to get at is, what's the case level or the revenue level in each market where you actually see inflection in terms of profitability first?
second, as we look out over the next 5 years or so, should we expect to see the rate of profit growth and the rate of the contribution to the corporate total to increase from those markets as you've moved past the investment phase?
Mark would have given some thought to your first question, maybe I'll start with your second. I think the answer to that one is yes. Here are 40 key markets that have already reached a level of development, distribution, velocity. Most of those, I'll say, are Jack Daniel's markets, where you could say that they're poised for very nice success going forward. I think the answer to your second question is yes. Those would be driving markets for Brown-Forman Corporation going forward.
On the other one, I don't know that my personal view, we haven't studied it in the way that you asked the question to be able to give you the definitive answer, is that it is a mixed bag as to when it gets to that scale of profitability or gross profitability, perhaps, depending upon how you might look at it on the P&L, where you get this inflection point and you're now sufficient to move it to a totally new level. One of the ways I think about what happened, if I think about my own philosophies about this 10 years ago, we would always talk about focus and focus and focus. Here we are 10 years later, after having focused and focused and focused, now we're one of those scale people.
We are a bigger company that is more independent around the world because of largely the brand development work that has gone on the Jack Daniel's brand. Importantly, other important pockets in key markets from other brands in the portfolio as well that give us some excitement. As a specific response to your question, I don't know that I could give you a ratio or a critical metric we look at that when it hits that, we say, "Now we go." Mark, do you have anything that you would add on that, sort of on the RTC front, that could provide some insight to the way he had asked the question?
I really don't from a metric point of view, other than maybe to say that perhaps if you reprise that list of 12 markets that were on that priority set, they differ so much as examples of what you may have been asking us just now. Some of those markets are investment phase markets. Brazil, as an example, is an investment phase market. What we do know is what I would say, unusual in this industry, this category, and with this lead brand, Jack Daniel's, the ability to price at a level that throws off the sort of margins that you would need to more quickly get to scale is amazing. I guess I have a background in Campbell Soup, Cadbury Schweppes, those companies.
This is an amazing industry, and to be able to say that we are premium plus and get to a potential leverage point earlier than my experience in those other industries.
It's really only one of a handful of factors we will look at when we make that determination is to change a model. It could be for a strategic reason. Sometimes we would do it simply because we will be more interested in building brands other than Jack Daniel's than any other partner we can envision. There's all kinds of criteria we look at when we make that determination, but scale is one of them. Scale is certainly one of them that we pay attention to, and we're in the fortunate position, after these years of growth, that in many more places today, we have more options available to us. Thank you for the question.
Bill Chappell from SunTrust.
Hey, Bill.
Just going back to Jack Daniel's Tennessee Honey in the U.S., where it's been, as you said, for now two years. Can you give us more color on how you're managing the brand? Obviously, it's exceeded expectations out of the box. Now as it's not mature, do you say, "Eventually, it can be this size compared to the core business, so we should manage to that?" Are you stepping up advertising even more in year three, or would you start to scale back and get better profitability? How do you try to manage that growth as now you have a little more data to look at?
I'll let Mike start it. John, you chime in, Don, myself. A bunch of us can help with that answer.
Two years in, the first thing I'd say is we're still experiencing trends of +20%. We believe there's still a tremendous upside for Jack Daniel's Tennessee Honey in the United States. You start out with a big brand with lots of advertising. The off-premise fills pretty well with 750s. We've now introduced 175s. I don't think we've even scratched the surface on distribution opportunities, even in the off-premise. The on-premise tends to come a little more slowly. I don't think we've scratched the surface. I would also say to your question, we're certainly not in any kind of a harvest mode. The brand is a great brand. It's very profitable. We will continue to invest behind the brand for the foreseeable future. It's still growing at just tremendous rates.
The only thing I'd add onto that is that if you look at our You build a brand, first of all, through making people aware of it. We still have tremendous upside on awareness. There's still a lot of people out there who still haven't heard of the brand, leading to the trial of the brand. There's still a whole lot of people that haven't even tried it, and that we're still converting when they do. Because a lot of it, you still get into that, "Oh, it's Jack Daniel's. I don't like whiskey" or something. We spend a lot of time and investment on trialing and sample opportunities, both in store and within bars, to convert that into trial and usage. Tremendous upside still here, of course, in the U.S., and then huge upside outside of the U.S.
It's a pretty normal conversation for a brand at this stage to be having. It was just right on where your question, Bill, was. I'll just say, there are examples of flavored products from categories that started as expressions out in the marketplace that have become, one of the foremost is Captain Morgan, that over a period of time developed as that single expression into a very large brand, much larger than Tennessee Honey is today. On one end, you can think of what would it require and what has to happen for an expression from Jack Daniel's to have that kind of success. Then also, if it's not going to have that kind of success, where is it on some continuum, and what is required?
They were really just touching on some of the basics that happened in the first couple of years about distribution, awareness, and trial. We haven't even begun to think of mixability and extended use and all these other things that are very natural considerations. We're going to be learning about it as we learn more in these next couple of years. Your question didn't even address the international expansion. That was just the U.S. We think there's still a lot of runway for Tennessee Honey.
Hi. This is Kren Velka with Orange Capital Partners. I have a question concerning if I look, let's say, 20 years into the future, I would assume that the U.S. business as a % of the business will keep shrinking. I guess it's my first question, is that correct? How do you think about that from a strategic point of view? With that, I'm just thinking how, maybe this is for Paul, how do you think about the skill set of the company, and what is required for that switch? If you keep growing like you have been growing international, clearly, your business is changing. Can you use the same skills from the U.S. and transfer them into markets outside the U.S., or how is that? How do you think about that?
I'll handle the second question in a moment. Does anybody want to comment on just that first one? Jim, you work on our strategy a lot as it relates to the position of the U.S. This question was, how would we envision the U.S. going forward as a percentage of Brown-Forman? It's been declining as a percentage as the international's grown.
Yeah. One factor to consider is the share the U.S. represents of global value of total distilled spirits, which is something like 35%. We would certainly always want to be at least indexed to the percentage the U.S. represented of the global spirits market. Our aspiration is actually to continue to grow share in the U.S.
Certainly, there are tremendous opportunities. You've seen the really small market shares that we alluded to in the presentations, lots of upsides. Yes, we spend a lot of time as a company evaluating how we want to grow as a global enterprise. We've gone through the standard evolution of a corporation, from a domestic company, to an export company, to an international company, to a multinational. I guess we grow the organization and our capabilities in the same way that we grow our brands, which is very thoughtfully considered and done on a market-by-market basis.
We are obviously then integrating all of these international businesses so that we're sharing best practices, understanding the learnings from all these route to market evolutions, sharing those across markets, so that as we continue to expand in new countries, we can leverage the knowledge and learning that we've had from growing or controlling our route to market in other countries. We're still a small company. We have 4,000 employees around the world. I like to say that we have more folks at a high school basketball game in Kentucky than that. What it does allow us, though, to stay very connected with each other. Leadership team knows most of our employees around the world. They're a highly engaged workforce. We continue to stay very connected in that way across cultures and languages.
The only little spin I would add to what Jim said is that we would not have predicted 5 years ago that the environment in the U.S. would be so conducive as it is today to Brown-Forman. For many of us who've been at the company a long time, we were not a big, what we used to refer to as a white goods company. We were squarely in the whiskey category, which had been declining in the U.S. for a long time. Lo and behold, it's stabilized and started to grow and now is sort of leading the growth of the U.S. distilled spirits market in the more recent periods here. Who better to be positioned for that than a company like Brown-Forman? The U.S. remains very exciting as a country to us on a multitude of levels.
There are only 300 million people plus in the U.S., and there's another 7 billion out there who are growing with their personal income and disposable income that, just like Jack Daniel's Tennessee Honey, we just mentioned Jack Daniel's Tennessee Honey. Some people don't even really know us that well yet. We've got a lot of work to do on both. The skill set question, what kind of skill sets? The ones we wrestle with the most, because we're known, because of our U.S. base, people think of U.S.-oriented capabilities and skill sets. I hope through some exposure to, for example, Anje here today, and others who you'll have encountered in our conversations at Brown-Forman, you'll see a broader group of capabilities and experiences at the company that reflect the global marketplace. We don't pretend to know it all right here.
That's why we want to give you access to people. This is probably one of the premier vodka brand builders in Brown-Forman you've had a chance to look at today. Our business, even though in the U.S. we all think about vodka being, man, what a great business, and it is in the U.S., particularly the premium set of vodka. The vodka-consuming parts of the world that we have aspirations as people's incomes rise and they spend more and there's premiumization continues, are very much in the world that Anje was describing to you today. There are different capabilities that are required to win in these marketplaces. The ones that we, as a group, struggle with and have the most debate about, and I suspect a lot of companies do, deal with portfolio management and resource allocation.
How do we know we're allocating our time and energy and creativity to the right things at the right time, to do it well? Overall, I think we do it very, very well. We're always challenged at this company because we own Jack Daniel's, and it's a captivating brand. Finding unique ways to organize your work, organize your resources so that all the brands can get appropriate attention is really important. That's an ongoing challenge when you own a trademark like Jack Daniel's. I do think when you're in it for the long run, you'll find the way to develop those capabilities. You'll either hire them or you'll just get better. We're pretty committed to that.
If I could add one other thing to that real quick. When I opened up my presentation, I was talking about how 10 years ago when I was in investor relations, this is what the company looked like. 10 years ago, this company, my current role, or the role I've been in in the last few years, has been managing the Western European business. That role used to be based in Louisville. Our finance director for Europe was based in Louisville. That was only 10 years ago. That has completely changed, where it's not so much that we're exporting Louisville talent out into the rest of the world. We've made a big effort to bring people that we've found in the rest of the world and bring them into Louisville and bring them back and forth. I think that's really exciting.
The people, having worked around that and having shipped some of my people into the U.S. in the last few years, has really been a good experience for them and is helping us to build a management team that we think can be around for a long time.
I'd make one other comment, too. I've seen this even going back as far as 1994, when we really got started in the emerging markets. One of the things that I was really impressed by, and continue to be, is as popular as Jack Daniel's is, it's also a very popular brand to want to be associated with. The quality of the people that we are able to attract because of the business that we're in and the brands that we have, has really been, in my mind, one of the reasons why we've been as successful as we have been.
You look at the total population working at Brown-Forman, there's actually more people working outside the U.S. than inside the U.S. It's just been a real testament, I think, to the company and to the brand in terms of the quality of the people we've been able to attract.
You can imagine I'm interested in this topic of capabilities. I was just glancing at this group, I'll just give you some quick examples. Jane Morreau, who's here with us, who a lot of you might know her voice from the earnings calls, is going to, in about a couple of weeks, start leading our production group. Garvin has worked in overseeing our European business and been a very important part of our Jack Daniel's business. Mike Keyes has overseen both Jack Daniel's in the U.S. and worked in a variety of functions. John Hayes has worked both on Herradura and Jack Daniel's. Jim Welch has been throughout Brown-Forman Corporation, leads our Corporate Affairs and Strategy today, but also has led Human Resources at the company. Mark's been both the Chief Marketing and Brands Officer as well as Chief Operating Officer.
Jill has just moved from head of production over to lead Latin America and North America. I give you those as examples. I talked about Lawson earlier. Don used to run our advancing markets group and worked in the United States. He's our Chief Financial Officer. In some of this stuff, you all, it really helps to build a group of executives that know this business broadly and deeply. If you can keep everybody together and create an environment where you can work well with one another, I think it's a real advantage for our company. So I give you those as examples of ways you build capabilities as well, by understanding the different disciplines and functions and areas of the company that over a longer period of time add up to a real asset.
Ann Gurkin.
Ann.
Ann Gurkin with Davenport.
We can't hear you. Yeah.
Ann Gurkin with Davenport.
There you go.
Great. Thanks. I have two questions, if I may.
Sure.
The first relates to the route to consumer and your international marketplace. The slide you referenced showed Brown-Forman owns 52% of that route to consumer, and I was curious, if you look out 10 years, how does that evolve? How do you see that going? Is it partnerships with Coca-Cola Hellenic? Is it more ownership by Brown-Forman? Do you have the capital? Are you willing to commit it to owning your own route to market? The second question, are there any brands in your portfolio that we should watch out for? I know in the past you've highlighted tequila. Southern Comfort looks like it's turning around. Can you just comment on any areas we should look for over the next several years as potential opportunities?
You're going to get everybody answering that second one. Mark, do you want to go ahead and tackle that first one?
I would say that the last six years, in particular, has been reasonably frantic in terms of the degree of change to that 50-some% of our international business that is now in owned distribution. I think we've said in a number of ways that the market situation will determine what the best route to consumer is for us. It is definitely not the case that we are inexorably moving toward that pie chart being 100% owned distribution. We have route to consumer models in markets today that we would prefer to have versus owned distribution. If I was to think forward, I think you put a sort of a 10-year forward horizon on your question.
I would say that it would be a very orderly and careful and perhaps not quite so frantic establishment of the route-to-consumer model that for that priority market makes sense for us. Russia, the example that was given, is a classic example, as is the U.K., of where actually, even though we have scale, the model that we are currently adopting suits us very well. That's the first part. The brands I'm going to give to everybody else.
Yeah. All of this, of course, assumes that the whole world cooperates with you. Some of these things, if the global economy went in the tank or something, you think differently about it. I think that is generally the way we've been thinking about it, and we'll continue to think about it. Let's open this to anybody, any brands that you all particularly feel that this group should pay more attention to or watch their development? I'll start with one. I just think Woodford Reserve, Lawson Whiting was starting to talk about that today a bit, about hitting sort of an inflection point, and we're just very excited about it, and that's a brand that's only, I think it's in its maybe 16th or 17th year.
Pretty patient approach from Brown-Forman, renovating a distillery, introducing a brand, and we have very high hopes for that brand as we do for all of the premium and super premium line extensions.
I'll take that one as well. Coming from the Casa Herradura business, which I was fortunate enough to manage for about five years, is the Herradura brand that you see here, I think, personally, it's just a jewel that had been one of the leading ultra-premium brands in Mexico but was losing share to Don Julio. As we did research and things, you found that the packaging just wasn't delivering. By simply making the package change down there, it's completely turned around the Mexican business where it's doing really well in Mexico and as well as since that time as well in the United States. It's a brand that is beginning to catch on, and that's one I'm personally proud of and I think has huge potential in this country, the United States.
Anything else, others? There's a couple of nice examples for you to keep an eye on. There's others, too.
Hi, Vivian.
Hey, Vivian. Yeah.
Vivian Azer, Citigroup. It struck me as interesting that China, while it has come up, wasn't a big focus. Of the markets that you presented for Jack Daniel's, it's the only one that at least visually I could tell, looks like you've seen depletion contraction over the last few years. As I understand it, you guys are stepping up your investment in China today. Can you speak to that and how your strategy's evolved over the last few years in China?
I'll start. A lot of us could comment on it. We've been sort of struggling out there for a variety of reasons, some of which you all would be able to observe some of these reasons. It's a really competitive market. We find that it's a difficult trading environment there, in turn particularly sort of penetrating this important on-premise channel for the imported spirits business. We've had some stops and starts with partnerships there. Some of these things, to be honest, are not unusual for emerging market world for a company that's going in and developing its business organically. There are a few other reasons.
I think the really wonderful thing is that the Jack Daniel's trademark, in that country, remains with what we still refer to as one of the accepted brands in Chinese drinking culture, even though it's had some tough depletion times in the last couple of years. The thing that's giving us the greatest hope here in the last sort of half a year or so, is we've retooled the leadership team there to get focus with some experienced people. The trademark is still the wonderful trademark, and we'll continue to look at innovative ways to take Jack Daniel's as the primary entrant from Brown-Forman in that market. I'm always encouraged that as much as we hear in the world, both in our industry and other industries about China, that this wonderful success story you've heard today has been unfolding really without much contribution from China.
When we get that right, we're really excited about it.
Follow-up to that.
Yeah, sure.
How important is scale in China, i.e., does China need to look like a Mexico? Do you need to make an acquisition to get distribution scale there, at least in A-tier cities?
Well, actually, the way we build, Don, you can maybe recall.
Yeah.
You want to talk about how we got going there.
Sure
in a way that might give some color to that? Yeah.
Yeah. A lot of times when you look at these markets, one of the first questions that you ask yourself is, where do you need to focus your brand building, and what does that market structure look like? In China, there are basically two different markets there. You've got your Western-style drinking occasion, and then you have kind of the business entertainment drinking occasion. Generally, in the business entertainment environment, surprisingly maybe, it's really all about discounting. Basically, you're talking about these karaoke bars. They have just a very small select brands they allow in, and they allow in the one that's going to give them the greatest discount. It's in an environment where, typically, you don't get a lot of brand-building. The host is looking for face, and generally will just look to the highest priced item on the menu, and that's what gets drunk.
It doesn't necessarily translate to continued consumer behavior out of that occasion. We basically elected to focus most, if not all, of our efforts in the Western bar drinking occasion, and looking towards those young people that have the Western-style lifestyle aspirations that are looking to those kinds of venues for their entertainment and are really looking to those types of brands to be their badges in terms of what they aspire to. In the initial years, Jack Daniel's did extraordinarily well in that venue. There weren't many, but over time, the number of those types of bars grew throughout China. I think when we first started, we probably had about 20, 25 people running around trying to do the brand promotions and create kind of the pull, if you will, and the loyalty behind the brand.
I think today we've got over 70 people, if I'm not mistaken, continuing to do those types of activities and really kind of create the knowledge around the brand and what it's about. It's a little bit more difficult and complicated in China because you still aren't at a stage where people still fully understand or appreciate all the different nuances around Western-style spirits. It's still very much about face and price. Those things will evolve and change over time. We believe that the type of brand-building activities that we're doing today will pay off for us as the consumer just becomes that much more educated.
Mark, anything?
Just to say that I don't think it's ever been a distribution access question. It's actually, China's a fascinating market, as Don said. 90% of the international spirits business is on-premise. Flip that to Russia, and it's the inverse. It's 90% off-premise, and so that's a more organized and scaled play, hence Coca-Cola partnership in Russia. For China, access to distribution isn't a challenge. What we're doing is, as Paul said, we've refreshed the leadership team over the last 6 to 12 months, and we're refreshing the 70-plus person sales team quite substantially, retraining, and also changing our sub-distributor and distributor route to market. We're in the middle of all that right now. Don't come to China just yet.
Back here, I think we got a question.
Mark Swartzberg, Stifel Nicolaus. Question about the U.S. pricing environment. Could you speak to the last kind of four or five years, how it's evolved to this greater emphasis recently on price, and what you think is really driving that? When you look at the consumer environment, it doesn't seem all that logical, but it might be that Diageo and you are saying, "We need to harvest this market to invest more in emerging markets." Could you just speak a little bit to what you think is really driving this, both from a macro perspective and then from kind of an industry thinking perspective?
Mike, you want to take that?
Yeah, I can talk a little bit about our perspective and where we're looking. For the last four or five years ago, as the recession hit the U.S., the on-premise really dried up, and we're really blessed with a brand like Jack Daniel's. We may be seeing things a little more quickly than some other brands because our demographic is so broad. We saw that early on, and we made a decision that because of the economic environment, that we had to make our brands more accessible. We moved product or resources more from what you saw today, although we continue to do those things, but less. We actually had more gift pack. We had more couponing and discounting on a lot of our brands.
As a couple of things happened, as I said in my presentation, is the environment started to change a little bit. The on-premise started coming back. Even though the economic recovery is very slow, I think consumers just made a choice that these are affordable luxuries and that they're going to splurge a little bit and get out and socialize. As that happened, we moved our resources over the last couple of years back predominantly to what we call pull activities from push activities, meaning, mainly, media, digital, packaging, things that really premiumize our product.
In the last couple of years, for us, we're starting to see brands like Jack Daniel's, Herradura, our premium brands, get to a place where we can actually sustain both volume and value. We were at the volume stage four or five years ago, but it just seems to be a perfect environment for us right now to do that. To do that, like I said earlier, we've got to continue to make sure that consumers see our brands as very premium and willing to pay that incremental pricing.
I think, the only other thing I've at least read about and have observed, particularly with some of the smaller brands, that you've seen more of this in the last year or so, are people who are looking ahead, and if they're looking at explosive growth on their aged products, that some of them are looking out into the world and saying, "Hey, I want to fund and fuel the emerging markets, so I have to watch what I can allocate over to the U.S. I'll therefore take my prices up." I think in the last year, you will have read some of the companies in the world talking about that, particularly in the Scotch whisky arena, much more often, that could be having an influence as well.
As it relates to pricing, just to make sure people understand, as it relates to pricing, we look at pricing as part of the overall brand-building exercise and the brand-building model. We're not looking at pricing as a tactic to milk the United States. Quite the opposite. We continue to see a lot of opportunity in this market, and we believe that consumers' perceptions over what is premium changes over time, and if you're not taking the price up with it, you risk having something done to you, like years ago, what happened to Smirnoff with Absolut coming in. We're definitely looking at price as part of our brand building.
Hi. Shane Finnimore, Manukau Partners. You've had such wonderful success, which you've talked about today. I was just wondering if you'd talk about some of the challenges that you've faced and maybe a few of the areas where you've had difficulty sort of meeting the ambitions that you've set out and maybe some areas where you think you might need to provide additional focus to get the success you desire.
You've heard some of them. Southern Comfort, the last few years, that is our second most important brand. Getting that on the right footing. We're starting to see signs of it in the United States. Got our fingers crossed for the international marketplace. You've heard some on that. China, the question was just asked, one of the few countries around the world where we've had our fits and starts and more fits lately than starts. We've talked about that. I don't know that it's a challenge or a problem, but when you sit out and look at where you want to do business, how you might improve your business, and we oftentimes talk about really limited things for us on the acquisition front. It would be evident in our last half a dozen years or so that we just haven't gone out and bought much.
Thankfully, we've been very dedicated to innovation, line extensions, and things that have helped to drive the company. Frankly, I found those as more advantageous long term than the acquisitions, even, but doesn't mean we're not interested in acquisitions. We have a sort of a four A scale we look at as we assess what we might be interested in, and it sort of first has to be attractive, it has to be available, has to be affordable, and then, in the end, the way the whole thing comes together, it has to be advisable. We have pretty strict lenses we place on those things. The thing I always say, people are always interested in when are we going to acquire something or what's the next acquisition? You'll know when we announce it. That's when you'll know.
Know that we go through a rigorous process of trying to figure out the right things to bring into Brown-Forman, just as we do when we have disposed of brands and businesses in past years. We really look at it and study it closely. Yeah. Lauren?
Hi, it's Lauren Torres from HSBC. Just curious, how can you, or how have you been competing against the brewers? It seems like with deeper pockets these days and them focusing more on premium beers and craft beers, they're going head to head with spirits more so now than they ever have. Could you just talk about the dynamic in the U.S. and how you're competing? And outside of the U.S., in Mexico and Brazil, for example, there's a very big beer culture. Also there, how do you compete? How do you get people to switch over and keep them in the category?
I'll give you a real honest answer on the U.S. question. It's so competitive in the United States amongst spirit companies, and the fact that so many entrepreneurial spirits companies exist and are being successful in the U.S., we probably don't have time to get over to the brewers. We like the success we've been having at the expense of some of the beer business, though. I would say, your other question, I'll let maybe Mark talk about Australia and some of the Mexico, Brazil questions that you all, Jill, others have, because we do think we compete, because of the RTD format in those countries, a little more directly. We're probably more preoccupied in some of those places where we have good-sized RTD businesses thinking about the beer occasion. You want to talk about maybe about New Mix or?
Sure. A couple things. One, when you think about the beer market, a lot of that is convenience in the can. And in both Brazil and Mexico, a lot of the RTD, same thing. Consumer looking for a convenient way to enjoy the beverage and also economical. Not to go out and buy a whole bottle of whiskey, but to be able to economically enjoy something to drink other than beer. I think that by itself helps. I would say, though, when I think about craft brewers, I think about craft distillers. And craft distillers, you still have to make a fine product. And in the case of craft distillers, they have increased awareness around the product. It's actually benefited Brown-Forman in a number of ways, like Woodford Reserve being the original craft distiller. People migrate that direction.
I'm not sure that craft brewers are impacting us. When I look at the opportunity to come into other markets, be it RTDs or craft distillers to get emphasis on our things, it's really about finding some way to connect with the consumer in the occasion they want. I think we have a number of ways that we're able to do that. Mark?
Perhaps the only other thing to say, internationally, we do know that the success that John described internationally for Jack Daniel's RTD and others of our trademarks in Australia, in Britain, in Germany touches on the beer occasion. It is true that through our ready-to-drink expressions of our trademarks, we are able to enter that occasion where we would not normally do that with full-strength spirits. The other thing I would say, just I think the U.S. craft brewing phenomena is a lens into the resurgence of bourbon and North American whiskey. I do believe that, this is personal, from what we've observed, is that the interest in more flavor and taste, which is the phenomena driving consumers away from mainstream beer into different-tasting, stronger-tasting beer.
I do believe that phenomena is also touching on why not so much vodka anymore, but more so bourbon and North American whiskey.
Lauren, let me just make one comment. I don't know if you'll find this interesting or not, if you were to be able to get a telescope lens into Brown-Forman and watch it over the course of any period of time and how we talk and what we look at, you'd probably be surprised how little we even talk about beer. It doesn't show up a lot in our presentations. There are a number of things that are going spirits' way, here in the United States as well as outside the United States, to the extent that consumers continue to look for more flavor and more variety, you tend to have to come to spirits for that. We stay pretty focused on that consumer.
Whenever I come out into the investors' world, I probably don't go a day without getting a question about beer and beer share and what's happening there and all of that. A little tongue in cheek, the only time I ever think about beer is the day before I come to a conference like this, because I know I'm going to get the question. I probably need to go and take a look at what's been going on. Certainly when it comes to looking at beer occasions and the ways that we can be more competitive in that arena, we'll look at that from a consumer perspective. You won't see beer names as competitive brands as we think about our business and how we're growing it. Ian? Ian Shackleton.
arena, we'll look at that from a consumer perspective. You won't see beer names as competitive brands as we think about our business and how we're growing it. Ian?
Ian Shackleton from Nomura. I had a couple of questions on Don's slide on M&A. When we're looking at local acquisitions, what are all the criteria? It strikes me, you did reference Herradura. It was probably a bit exceptional in being quite a premium brand. Most local acquisitions will be lower margin, less premium. The other question was really around the categories then you're fishing in, which are obviously quite a small pond with Scotch and Irish. A really simple question, why aren't there more categories there? Something like premium rum, or is that an issue with the Bacardi distribution alliances?
I'll take the last part first. One of the things that we believe as we think out into the future and how the company needs to evolve, if we're going to be able to continue to compete at a top-tier level and outperform the industry overall, we've got to be pretty selective that we're going into the kind of categories and the kind of brands that have the ability to do that. As we've gone through the discipline of looking at the business and what we think those areas are that can consistently and sustainably continue to outperform, the two by far in a way that we've got the most confidence in would be the Scotch arena and the vodka arena. Hence, those would be probably the two highest level of priorities that we have.
Certainly at premium levels and above, we like the premium positioning that we have. We think that's really where the long-term future of this business resides from a profitability and a return standpoint. Given that we really don't have today the assets or the capabilities to do Scotch, if we're going to go in there, it probably is going to necessitate some form of an acquisition in order to do it. On the vodka side, as you've noticed up there, we've got both innovation as well as acquisition, and we're going to look at what are the different types of regional opportunities there where a brand would do well in our hands. It doesn't mean that we won't look at other things.
It's just that, if things were to come up for sale, we'll probably take a look at them, determine whether or not we think it could fit some of the criteria that we have. When we think about proactively where the industry is going and where we want to go within it, we see those two areas as the ones that we are probably the most proactive about.
Something for you. We use categories, and sometimes countries too, to demonstrate prioritization and actually to illustrate opportunity. You should know that even within a particular category of interest, the vast majority of trademarks aren't of interest to us. We are a much more focused brand-building company, by definition, and we just see those categories as offering superb opportunity for a company that wants to grow forever. You look for long-running runways for growth is really the idea there. Within it, you're going to want to be really picky and choosy about the trademarks that you think will do very well in your hands. While we talk a lot of times and use the category as a reference point, we in no way, shape, or form are out trying to dominate categories and countries in some way.
Our share of the global marketplace, I think it'd be unrealistic for us to think that way. Almost keeping to a narrow focus against great opportunities is really the way we think about it, and that really resides in a brand trademark.
One other short comment to make. I was talking about the rest of portfolio growth that we have. The one thing we do not have at Brown-Forman, which is obviously a very good thing, is a long tail compared to most of the industry, other participants out there. The last thing we want to do is make acquisitions, whether local or international, for scale's sake, that would eventually turn into a bigger tail. That is not something that we're interested in doing at all. One of the strong or toughest criteria we put against any of the acquisitions is it's got to accelerate the company's growth rate, not decelerate it. The bar is pretty high, and that's why we're pretty choosy on those.
I think everybody's ready for a drink.
You all, thank you very much for what has been a long afternoon. Really appreciate you sticking with us through it this afternoon. Thank you all.
Thank you.