Yeah. Okay, great. So we're gonna get started. We've got Brown-Forman with us next. We have the company's President and CEO, Lawson Whiting, and CFO, Leanne Cunningham. So thank you so much. It's great to have you in Boston, and I think it's the exact same time slot as last year. Fun fact.
I think it is, too.
Yeah.
Yeah.
So we're kind of like-
The post-launch crowd.
Yeah. So that's great. So no change in our schedule, but a lot of change in the industry since last year. So we'll kind of jump right in. So Lawson, we've had an increasing number of kind of conversations, we've called them existential debates even, around the future of alcohol consumption. You know, Gen Z - is Gen Z drinking less? The rise of other kind of, like, mood-altering options, whether it's cannabis beverages, adaptogenic drinks, GLP-1s coming into the conversation. So maybe we can set the stage with how you're thinking about the direction for total beverage alcohol, and also spirit share within that.
Yeah. So, okay, so it's a long-
Long one
... That's a long question.
I know.
Total beverage alcohol, for those that haven't followed this so much, hasn't moved in the United States in fifty years. I mean, the per capita consumption, COVID aside, when it kind of spiked and moved all around, but in general, the long-term trends have been in that 4-5% range for literally decades. Now, this time last year at this conference, we stood up here on the stage, and I remember, it was we just used this last week with our earnings call, but the U.S. spirits market was + 5,7, 5.7, to be exact. By Christmas, it was zero, and it caught everyone by surprise, quite a bit, and it was, you know, that was a challenging time, and the subsequent quarters after that were obviously pretty challenging, too. The big question is: What caused it?
'Cause how does a market go as big as the U.S. market goes from five and a half or six to a zero that quickly? That has really never happened in my... at least not in my time. And there were a lot of folks talking about GLP-1s. That was the theme last year, I seem to remember, at this conference. It was the question in every meeting we had, but cannabis was a big one, too, and then Gen Z. I do not believe either one of - any one of those three can possibly take a market that was going like this, and literally, in a matter of months, go to zero. It just - and GLP-1s are not big enough to do that. Cannabis has been around forever, and I don't believe... We got asked last week about the beverage opportunity within cannabis.
It's just not something. It's not. Well, it's very small now, and I don't see the potential there as being a meaningful category, and it's just, I don't see the logic in people sitting around with a six-pack of cannabis, twelve-ounce beverages and drinking them. That's just not the format or the way I think that's gonna happen. And then Gen Z, we have seen some research that has shown that sort of 21 -24 year olds, 21-25 year olds are drinking a little bit less. People have thrown out the conjecture that it's, they wanna be healthier, but I'm not really buying that so much either. It's that 21 - 25 year old, they don't have the disposable income. They just... You know, they're getting their first jobs, whatever it might be, and they're pinched.
When inflation comes up, you're at your first entry-level salary, all of a sudden, everything just seems more expensive. And so I think all three of those examples, what we've called the big three, they are some of them, particularly, I do think that GLP-1s, as a long-term thing, could, you know, be a headwind for the spirits industry. We're not trying to be naive and not consider it and not think about it and think about how we would react to it. But I think it really comes down to inflation and higher interest rates and the pinch on the consumer's pocketbook. It's just hard. That's the only thing that could take a market like this, then drop it as quickly as it did, in my mind. So I don't think it's a structural thing. I do believe it's cyclical.
Okay, great. And then, spirit share within total beverage alcohol, like I said, you know, continue at that 5%. I guess, spirit-based RTDs, now, is that kind of a net addition or detractor from full-strength spirits over time? We've heard kind of mixed commentary on how much it's sourcing from traditional spirits versus beer and wine, incremental. So, you know, what are your views on that, and what have you guys seen, with Jack and Coke on that front?
Yeah. So spirit-based RTDs, for those that haven't followed along as closely, in the U.S., they're quite expensive. Jack and Cola, which has been around for a long, long time, but never got to be any meaningful size, largely because of the price relative to the malt-based RTDs. So now, all of a sudden, there's been this explosion in new brands. Now, for one thing, Jack and Cola has been around for 30+ years, and it while all these other brands have come and gone, particularly in the malt category, but I go back to our own California Cooler 30 years ago, and then the dozens and dozens of malt-based brands that have come and gone over that time period, yet Jack and Cola just continues. It's like the engine that just keeps moving and keeps growing around the world.
So it's clearly not a fad, so I don't, I'm not really concerned about the fad element to it. And we remain quite excited that we've now mostly transitioned the world from Jack and Cola to Jack and Coke. And so, now we are distributing in the U.S. and in the U.K. I mean, sorry, U.S., Germany, and eventually Australia, and the Coca-Cola system is managing the rest of the world. We see an enormous opportunity in that, and they've obviously got a massive system, much bigger than we could ever dream of having, and so, we're excited about the opportunities there. But your, your question, back to your question on the U.S. market and what has happened there, you know, I think for the most part, the occasion is very different for an RTD than a full-strength spirit.
So the places that the full-strength spirit brands are sourcing from, full-strength RTD brands are sourcing from, are largely gonna be the beer occasion, the malt, you know, the malt-based RTDs that are out there. Maybe you could make an argument that some of these are digging in a little bit at vodka, but I don't see it being a cannibalizing, either Jack and Coke cannibalizing full strength. We've not seen any evidence of that. And just, it just doesn't. I don't feel like it's a big threat to our business. I would consider it a minor threat.
Okay, great. Let's talk for a minute about the consumer. Curious if you could remind us kind of where you believe at-home inventories stand today. You expect the headwind of working down inventories at home is kind of largely behind you, but now that we're, you know, the at-home normalization has been playing out, how do you think about the runway left, you know, and, and premiumization, given the challenged consumer backdrop?
So where this came from, a couple of quarters ago, we started talking on our earnings calls about inventories in the systems, and there's distributor inventories in the system, there's retail, and then there's consumer. The thought, the idea that we've been talking about now, and a number of people in the industry have largely backed this up. If you go back into the COVID, or the post-COVID days, the boom years of 2021, 2022, and the first half of 2023, I mean, this is when the Nielsen numbers are, for TDS, spiked up to, you know, over 20. So the amount of purchasing happened was just absolutely enormous.
As some of that based on stimulus that was flowing through the economy, they were spending money on alcohol, and the idea is that there were a lot of bottles bought, and not as much of it was consumed, and so the cabinets started to grow, and so how much would people have in their home cabinets, and how quickly do they move through that, has been the question, and it's not a very easy answer, and it's gonna be. It's not precise at all, 'cause we, you know, obviously can't tell how many bottles are sitting in people's cabinets at home, but we do know, and this is a big average here, but the average consumer, so not your core loyalist, but your average consumers drink a couple of bottles a year.
So if you had a couple bottles sitting in your home cabinet, it was gonna take a year to walk through that. And we've tried to do some estimates, and I know some other sell-side people have taken some surveys and things like that, that largely backed it up, that would say that that consumer cabinet it's on its way out now. It's a very imprecise science as to when that's actually gonna turn, but as much as we've tried to study it, we think it's sort of in this time period. And some of that is also backed up by this, what I said earlier, when the market was growing at 5-7%, and then it went to 0% real quick.
We're coming against that, and so, you're gonna have some refilling going on at the consumer level, and then we're gonna see where retailers and the wholesale system goes with their own inventories, but we feel pretty good that the outlook and that the market is gonna start to turn sometime over the next twelve months.
Okay, great. I did wanna touch on distributor inventory. So I know the fiscal 2025 guidance assumes that current distributor inventory levels hold steady, but I just wanted to talk about the conviction in that outlook. You know, there's presumably a little bit of... Not much to prompt an increase in inventories just yet, given the weak consumer environment. But if we think about potential downside risk, I mean, is it operationally feasible for inventories to go lower?
So I'll take that one. So how we've been thinking about our inventories, we have. Lawson just covered the consumer. We work really, really closely with our distributors, and so we've told. You would have heard us say on our fourth quarter call that our distributors were at or just below the bottom end of their range. And we continue to work closely with them. They set the bottom end of the range, and that target range is important to them because they need that amount of time just for logistics, to get the cases from their distribution to the retailer on the shelf, and they need that target range to make sure that there's not lost sales, and no one in the supply chain wants to have that lost sale.
So we've said, and we experienced in the second half of our last fiscal year, the adjustment in both the retailer inventory and the distributor inventory levels, and we believe in our outlook that we've made the right assumptions in working with our partners, that we're gonna have consistent behavior from the consumer, the retailer, and the distributor for the rest of this fiscal year.
Okay, great. Let's stick with inventories, but a bit differently, Leanne, so now warehouse inventories in the U.S. So aged whiskey supply has risen dramatically over the last decade or so. You've previously shared that you evaluate your own supply periodically and tweak, you know, production as necessary. How sensitive, though, do you think your peers are in reassessing their own production plans? And maybe said differently, like, how prudent do you feel the broader industry is in managing the long-term supply and demand balance?
Yeah, and you have to think, from the major distillers, we've all been doing this for decades and generations. So, and I think you can look to history and how we've all acted responsibly over this time. We've been getting this question pretty consistently since, like, 2015 , when the craft distillers started, we started to see a proliferation of craft distillers. So what we would say is, from a distilling perspective, if you believe there's future growth, you always have to distill ahead of the amount that you're bottling. And so when we look out, and even with our industry, over the last ten-year CAGR, there was + 5% growth. So again, people were distilling against that growth that we have experienced.
When you look at IWSR, they say over the next five years, that the compounded annual growth rate would be 3-4%. So people are still projecting growth. That's for the entire segment. The way we do our process, and we do it multiple times a year, is we really work to understand with each one of our markets what's the products that they think they can sell going forward. We roll it all up, and then we're always constantly making adjustments to our production levels to make sure that our supply is going to equal the future demand that we see. And I think we all do it, probably, in our industry a little bit differently, but generally speaking, I think all of us are trying, working hard to match supply to demand.
I do believe we have levers available to us to where we can always adjust, so our supply is equaling demand. I think I just expect, if history repeats itself, everyone will continue to act responsibly and rationally as we go forward.
I think let me add something onto that, too. As Leanne said, the big, I don't know what it is, the big five or six suppliers or distillers control the vast majority of the American whiskey category. And then you've got these literally hundreds and hundreds of brands that are much smaller. They're undercapitalized in a lot of ways. That is some of the increased inventory is sitting out in that space. We, you know, less confident in how rational that might be, 'cause a lot of those folks are about cash flow, and they're just trying to actually pay the bills to keep the lights on. And it is an extraordinarily competitive business and very hard on those folks to even get their products on the shelf. That's where some of the inventory is backing up right now.
But it doesn't worry me, you know. It doesn't overly worry me, I guess, because, one, those brands don't have national distribution, hardly any of them. Some do, and some are being very successful. I'm not, I'm not putting down the entire segment, but so many of those brands are so local, and they're backed up on inventory, and they are struggling to get it out of their own, you know, out of their own warehouses. And so, but that isn't. There's not a lot of consumers that are gonna trade a brand that they don't know, that is generally expensive on the shelf. They're not gonna, not buy Jack Daniel's and go to, go after that brand. I just don't see that happening.
And so I don't know how that's all gonna play out, but the industry oversupply comment, I think, is not maybe as drastic as maybe some of the headlines have read, and the only other thing is, this time last year, when we were up here on stage and we talked a little bit about this, we were scared we were gonna run out, so how things can swing in a one-year timeframe. You don't overly correct in these things. Leanne described the process that we go through. It's always about incrementally making changes one way or the other, but it's not. You're not gonna shut the place down, shut the distillery down so that you can get your inventories back under, under control, so.
Okay. Let's talk a bit about the global American whiskey growth opportunity. Use up all that inventory. But I'd love if you could talk a little bit more about kind of resource allocation, the markets that are most interesting to you, outside the U.S. Yeah, so maybe we'll start with the international story and kind of the markets that are most exciting.
Yeah. Well, so the international story for Brown-Forman, really for the Jack Daniel's brand, over the last... I mean, I started 27 years ago, and back then, we were 85% U.S., 15% international. Today, it has swung way the other way, where it's around 55% international, I believe, is the number, and 45%. So we've already had a massive expansion into the international market. So, we see, you know, we continue to see a ton of opportunities. If you talk about Black Label, 'cause there's I should say it this way: There are geographic opportunities, and then there are brand or portfolio opportunities, and they both work together, and it depends on where you are.
If we take core Black Label, while we have a big business in the United States, and we have a big business in Europe, we are in the rest of the world for the most part. Asia, we have a decent business in Japan, but most of Asia is relatively small, particularly in Southeast Asia, places like that. Places like Africa, Middle East, we've got a long runway in all those markets, and South America, Mexico, places like that, have been some of the most successful markets for us in the world in the last decade or so, we see lots of continued runway for growth of Black Label, but then you've got the rest of the Jack portfolio, and that would range from the RTDs, which we just talked about, but the flavors, we have three flavors, all of which are great recruitment tools.
And that is one of their main purposes in life, is to recruit consumers into the Jack Daniel's family of brands and then hopefully, you know, hang on to them forever. And then the other important, and we actually have it, it's gotten big enough and growing enough, that our super premium Jack Daniel's expressions have been very, very successful, too, to the point where they made it into our earnings release in the second or third quarter, something like that, because they had grown and added that much business to us. So, we do see plenty of opportunity for the brand and continue to manage it in a way that we think is best for the long term.
Okay, great.
Yeah.
Well, and you forgot the song of the summer.
Oh! Oh, I didn't talk about Shaboozey.
Yeah.
They were gonna pay me to say the word Shaboozey up here. But for those of you that even know what I'm talking about, the number one song in America, really the whole summer, has been almost an anthem for Jack Daniel's. It's kind of a fun party song. So if you know what I'm talking about, great. If you don't, go put it onto YouTube and watch that. It's the best Jack Daniel's advertisement we've had in a long time.
And it's a great way to stay relevant to that LDA.
Yeah.
... the newer consumers.
It is, in all seriousness. I mean, the challenge for any consumer brand is balancing recruitment and retention, and we're very good at retention. It sometimes can be challenging to bring in, in this competitive environment, how you bring new consumers into the franchise and how you stay relevant in pop culture, and that's just been one that is. We didn't pay for it. It just kinda landed in our lap one day, and it's been a great, it's been a great win for the brand.
That's great. S o, Leanne, the recent domestic distributor destocking really brought to light how challenging it can be to have visibility across the three-tier system in the U.S., so as you reflect on the last year or so, are there investments that can be made to improve line of sight across the tiers? And if so, kind of what sorts of, like, cost considerations might there be in trying to establish a better read on the industry?
Yeah, and I'll continue to build on what Lawson said. You know, the space we don't have a lot of visibility is in the consumer's pantry, but where we do have a lot of visibility is with the distributor. We always work, like I said earlier, really closely with them to understand what does their business look like and what are their needs for us to support them with as their supplier. So we have been working over the last year, because if you would have listened to our fourth quarter earnings call, again, we would have said we were a bit unexpected for us, that they dipped below the low end of their range.
Since that time, we've continued to work on our processes, ways of working, communications, but we don't feel like we need additional investment to get back to that level of visibility that we had. It was a reaction for them in this environment with the impact of interest rates and inflation, and then the flow of the product through the channel with the distributor. So again, for us, with our distributors, we are the largest or one of the largest suppliers in most of our distributor houses. So, our health, or their health is tied to our health and the other way around. So again, we don't really feel like there needs to be more investment.
But we have taken the time to make sure that we have more effective communication, frequency, and understanding of what the business is in this really dynamic operating environment.
Okay. Speaking of visibility, let's maybe shift gears to productivity, and kind of get some more color there. So, Leanne, you spoke at a high level to efficiencies and improved marketing effectiveness back at the Investor Day, in the spring, but there wasn't much kind of in terms of like timing or scale, the more quantitative elements. So are there any guardrails you can offer on how we should be thinking about productivity, even if it's just tangible examples of initiatives that are in the pipeline?
Yeah. So I'll start at the highest level by saying, you know, continuous improvement is a mindset, and I think it's something Brown-Forman is founded on, whether it be from our founder saying, "There's nothing better in the market," to Jack Daniel's saying, "Every day we make it, we're gonna make it the best that we can." So that has been a mindset. It's a culture of who we are. But just to go specifically, I'll give you three examples.
You know, back in 2021, we took the opportunity to create a group, part with existing resources and part with bringing new resources in from some of the best-in-class companies around the world, to create our integrated marketing communications team, to create an end-to-end process that not only let us connect more deeply and directly with our consumers, but it also helped with the efficiency of our media spend, and really tailoring that right message to the right consumer where they were. So that's an investment that we've made, that we continue to yield efficiencies with. Another acronym from IMC is our IBP process, which is our integrated business planning.
And as we went through the volatility of all the supply chain disruption we had post-COVID, we wanted to create an end-to-end process so we could understand really from the customer all the way back to the plant, our planning system. So we made investments in better systems, greater visibility to the consumer demand, and streamlining that process, which created efficiencies in making sure we're making the right product and getting it to the right place at the right time. And then lastly, I'll talk about the initiatives. If you've been listening to our calls over the last year, the increasing wood costs or the increasing cost of our barrel has been one of our headwinds from a gross margin perspective.
We strategically have been adjusting the infrastructure that supports our wood supply chain, where we have sold our mills, our wood mills, and we recently just divested of our cooperage in Alabama. We did that and created a partnership, so we have more flexibility in our supply chain and more diversification on our supply chain, while it gives us the opportunity to focus our capital allocation on the rest of our spirits brands versus that. It's given us a more competitive cost structure and one that will continue to yield efficiencies to us. Today, I don't have a big productivity initiative to announce to you, but please know all of our team members are back at home, working very diligently with a continuous improvement mindset and looking for those next opportunities.
You know, just to add on to that a little bit, COVID's four and a half years ago now when it started. We are still dealing with the aftereffects all these years later, and we never would have said, you know, thought that that was gonna be the case two or three years ago. It's been one of the challenges for everyone to follow our company and the path that we've taken over the last few years because there was so much volatility and so much of it went way up, and then the supply chain caused all these problems, and now we've been reloading, and it's. It has. The numbers have been extremely volatile.
But when you cut through it all or you try to step back and look at things on a sort of pre, you know, 2019 to today, it's been a heck of a business over the last few years. Our sales growth has been outstanding. It's sort of in that mid or even a little bit better than mid-single digit growth rate over that time period. So it's one of those where we've just been encouraging everyone to step back a little bit and try to... By quarter- by-q uarter, it's almost impossible to follow us over the last couple of years. But we feel pretty good about where we are today.
... Great! Let's then talk about tequila. Let's talk about brand and portfolio. You've previously talked about there being a long way to go on Herradura distribution and awareness. The brand took a little bit of a step back in 2024, but, you know, you said it was like mid-teens CAGR before that. Anything you're doing differently going forward, given the still challenging macro, just to keep making progress on building Herradura?
Yeah. So Herradura is one of the most important brands to this company. And as you mentioned, this is one of those step back to the sort of pre-COVID to where we are today. It's still been in that sort of 10% kind of range. Put the last quarter aside, I'll talk about that in a second, but which has been good, but obviously, there are competitors out there that have grown much faster, and we've not kept up on a share basis over that time period, although we have more recently. But Herradura, it has been challenging. We obviously did not, or we have not gone the celebrity route, which it feels like every other brand in that space has a celebrity tied to it. And that was one of those things.
We've had plenty of conversations behind closed doors on what we ought to do about that, but we believe Herradura is literally one of the originals. It's a hundred and fifty-four-year-old brand, so it's the same age as Brown-Forman is. And it drips with authenticity, and quality of liquid in the bottle, and we've got to find a better way to connect that to consumers. But a lot of it, you know, in the bartender world, for example, it is a great brand. People love the authentic brand, and particularly in the real super premium bars across America, they, you know, they don't like the celebrity thing isn't quite what they want. They want something that's real, and so we think we've got it. We just got to figure out a way to grow it faster.
As you say, our distribution and awareness is not where it needs to be, and we're gonna work really hard on, on fixing that. El Jimador is a little bit different. It's much lower price, but it's a big brand, too. We've shrunk it in Mexico considerably because it just wasn't earning a margin or it wasn't even covering its cost of capital, and we've moved that juice into the United States, and El Jimador, El Jimador has done really well in the U.S. in the last five years. It's even grown a little bit faster than Herradura. So, it's a good brand. We're coming out with some new packaging. We have new ideas, and we're gonna bring, bring, you know, an, an incremental push on that brand to market in the next few years.
And then, the international opportunity, which I know has been sort of talked about a little bit over the last year for the tequila category. It's so concentrated in Mexico and the U.S. But El Jimador from a 100% agave product, it's the number one tequila in the U.K.-
Australia
... Australia, some markets in South America. I mean, it's got its foothold in some of these markets, and we just got to find a way to make it bigger.
Okay. Anything to note on the promotional environment in tequila at the moment?
The promotional environment in general in the United States, this came up quite a few times this morning. One, I can tell you if you just go to TDS level, and then Brown-Forman is even a little bit better than this, but pricing is still up year over year. So you are starting to see some more promotions leak into the U.S. market. Tequila probably being the one, if I was concerned about a particular category pricing because of the massive drop in the cost of the agave, that opens up the possibility for brands to drop price and still have a decent margin around their product.
Now, Herradura is the one we are most protective of, and these brands that are up in that $45-$50 a bottle range, I don't worry so much about the promotional environment around them because those are very well, you know, high-end consumers for the most part, and going from $48 - $46 isn't gonna move the needle. So I'm not so worried about that, but I do. The lower end of the market is starting to show a little bit of pressure. But when I say that, I'm talking down a point, you know, 1% kind of thing. It's not a. The bottom is not falling out. But when you see costs go down as much as it has, you know, that door does open up a little bit.
But net-net, the costs have come down so much that the margins in this business, I expect, are just gonna improve, not just for us, but for everyone.
Okay, great. Let me touch on the balance sheet, Leanne, so you've expressed the desire to get back to more normal levels of working capital, but I'd love to put maybe a finer point on kind of a target range, and is this like a multi-year journey or something that's, you know, can be reached in fiscal 2025?
Yeah, and so Lawson shared, you know, we have been on a really volatile journey since the world shut down in 2020, 2020. Then consumer demand spiked. We ran into glass supply challenges. We replenished. We had spiking consumer demand. We were launching innovation. So we had a lot going on to support. And with the glass supply challenges, it kind of knocked us off of what our normal alignment with shipments and depletions are. So over the long period of time, we would say from our working capital, we've already talked about this, our barrel whiskey and our work in process, that really represents what we think our future growth is going to be. So we wanna see those lines continue to grow.
Where we have the opportunity to optimize our balance sheet is really in finished goods and raw materials, and we've been working to do that. I think we said that a couple of quarters ago on our call that it would take us a few quarters to work through that. We even had stated, as in our outlook, it considers that we're gonna have lower production volumes as it relates to adjusting the working capital that we have. Now, a few things. We do have some slower consumer demand, which is gonna kinda maybe take us a little bit more time to work that down on our balance sheet. But then also, we are proactively working to mitigate some risk related to tariffs.
And so the different scenarios that are possible, we are making sure that we have inventory in the right places, and we're investing in those proactive scenarios. But all in all, we've shared with you the details of, you know, how we're trying to get our working capital and reduce the intensity of that that's on our balance sheet to kind of back to more normal levels. It'll take us a little bit of time. We haven't put a specific timeframe on it. We've already made really good progress when you look at a year-over-year basis, and we've got just more to go.
Okay. My next question was going to be on tariffs, and kind of working through prior retaliatory tariffs was a multi-year journey. But now it sounds like you're doing some things proactively. So I guess I wanna make sure I understand, one, the working capital correction takes longer, and that is related to potential tariff mitigation. So, and these are things you had not done in the past, right? So this is kind of a more proactive approach to thinking-
Yeah
-about tariffs.
Yep. Okay, I'll-
Either, yeah
... I'll start it, and you can finish.
I don't know who knows the answer.
Yeah, tariffs. Look, tariffs have been a nightmare for Brown-Forman when it started in 2018, and it came on very fast, so we didn't have any time to prep or to move inventories around or anything like that. And so, it hit us pretty hard, and it hit American whiskey. I mean, American whiskey was really the only category of substance that got into the tariff situation. So we looked at it back then, like, "What happened? How did Brown-Forman find itself at the center of the global trade conversation, and a tariff that cost us hundreds and hundreds of millions of dollars?" So we did learn a few things that you can do, and there's a little more prep time, but it's really hard to figure out where this is all gonna go. I mean, it may not come to fruition.
It just depends on which administration is in charge, and how deep and which industries they want to go after, and on the other side, there are elections around the world. You know, there are so many different countries that are having elections over the next few years, that trying to predict the direction of the global trade system is very difficult and tough to do, so we're doing things like, as we said, moving finished goods into our warehouses in Europe. You get them there ahead of time. That way, those cases are not, you know, subject to tariffs, and that would, you know, that helps. You can hire outside bottlers, and we can move bulk around. There are different things that you can do to try to mitigate, but there's only so far you can take that.
It's still a very expensive proposition, and one we are working very, very hard behind the scenes to avoid.
Okay, okay. So let's maybe to conclude today's conversation, I'd love to reflect on the double, triple, bolder, better, 10-year ambition that you shared earlier this year. What do you see as maybe the greatest challenge toward executing on that, and where are you the most, not just excited, but encouraged?
Look, we're trying to motivate a lot of our employees to think a little bit bigger and to make sure that we are, throughout not only the supply chain, but our organization, preparing to double the size of the company over that time period. So we think. Look, we have rearranged our portfolio, reshaped the portfolio is the term we use, quite a bit in the last 10 years. And so one of the nice things about Brown-Forman is we don't really have a tail. We used to, and it was. There were quite a number of brands in there, both wine and spirits wise, that were less than premium. The wine business is a major struggle.
We've gotten rid of all that and replaced it with brands like Gin Mare and all our Scotch portfolio, Diplomático, Slane, Fords Gin. I mean, well, there's a number of them that we have brought in, and, like, right before COVID hit, which now I know it was five years ago, but all of those brands were absolutely flying well into double-digit growth land. We think when the world normalizes, and the U.S. market kind of returns back to its sort of old ways, those brands are a net additive. We've got to keep Jack Daniel's growing and growing, and as long as it grows at sort of a growth rates that it's done in the past few years, and then we have this rest of portfolio that's on supercharged, you know, high expectation kind of thing, the math works.
We'll easily double the size of the company as long as we continue to do that. We've tried to give some confidence to the company, even to say, "Look, we doubled between 2002 - 2012. We doubled again from 2012 - 2022, and we're planning on doubling again." So it's not a massive redirection or a massive increase in our growth rate that's gonna take us to get there. It's just continuing to keep our head down, do the right things to build these brands for the long term.
Okay. Well, great, we have to conclude. So Leanne and Lawson, thank you so much for being here. Thank you for prioritizing the conference today. We really, really appreciate it.
Great.
There's gonna be a breakout, so we'll move over there, and please join me in thanking Brown-Forman.