Morning.
Morning.
Morning. Am I on? Okay. Welcome to Louisville. Welcome to the 2018 annual stockholders meeting. I know many of you would have traveled in or made sure that you're in town for today. Thank you. It makes it all so much more meaningful for us to have a live audience. We've got a live feed as well, I think, online. Welcome to those of you who are listening in or who are watching by video. Just so that you all know, we've got two other, maybe three other rooms here on campus, with shareholders watching on a screen there as well, and Paul and I were able to visit with them on our way here this morning. Welcome to them as well. I know we've got some retired directors in the room today, and I wanted to be sure to welcome them. Ina Bond.
Is Ina here? There she is. Ina, thank you for coming. Gay Stubbs. Sandra Frazier. Martin Brown Jr. I know Paul's got family here today. Dr. Varga. Where's Dr. Varga? Dr. Varga. His sister, Julie Hale, welcome. Mrs. Varga. Missy Varga, thank you, Missy, for coming over. Paul, do you want to join me?
Yeah.
We also, in prior years, of course, we would have welcomed also Bill Street here today. We just wanted to say a few words. Of course, many of you may know that Bill sadly passed last night.
We have, on your seats, we have put a very brief, but we think very nice, tribute to Bill that you can take with you, for those of you who didn't know him as well. The background is, he was a stalwart at Brown-Forman as both a leader, a director. The city, the company, and our industry last night lost a very great man. What we thought we'd do just before we started the formal business part of the program, was just to have a moment of silence in Bill's honor.
Thank you.
Thank you all for allowing us to do that at the beginning of what otherwise was a formal business day, I'll turn it back over to Garvin.
Thank you, Paul. I think Lindy may have even dialed in, Lindy Street.
Yeah.
Lindy, welcome, and thank you. Now, if Bill Street were here, he'd say, "Garvin, time to get back to business.
He would.
That's what I'm going to do. I now call to order the formal business portion of the 2018 annual stockholders meeting. We only have one item of business on the agenda for today: to elect the directors for the coming year. Unless there's an objection, I'll waive the reading of the minutes from last year's meeting. If I could ask our Secretary and General Counsel, Matthew Hamel, to describe the notice given to shareholders.
Thanks, Garvin. Class A shareholders who appeared on our records as of June 18th, 2018, are entitled to vote at today's meeting. On June 26th, 2018, we mailed a notice of this meeting together with a proxy statement, a proxy card, and a copy of the company's annual report, which included our Form 10-K for fiscal 2018. To establish a quorum to conduct business at today's meeting, we must have in attendance, in person or by proxy, at least the majority of the outstanding Class A shares. I can report that at today's meeting, approximately 92.8% of Class A shares are present in person or represented by proxy. We therefore have a quorum to conduct business.
Thank you. The following people were sworn in earlier as electoral inspectors to supervise the voting: Jeff Caffey, Mohammed Lasege, and Stephanie So. At this meeting, the only item of business is the election of directors. The following 14 directors are up for election to serve for the coming year. If I could ask each of you to stand as I call out your names. Patrick Bousquet-Chavanne, Chief Executive Officer, Emaar Malls. Campbell P. Brown, President and Managing Director of Old Forester, Brown-Forman Corporation. Stuart R. Brown, Managing Partner, Typha Partners LLC. Bruce L. Byrns, Retired Vice Chairman of the Board, Procter & Gamble Company. John D. Cook, Director Emeritus, McKinsey & Company. Marshall B. Farrer, Senior Vice President and Managing Director of Global Travel Retail, Brown-Forman Corporation. Laura L. Frazier, Owner and Chairman, Bittner's LLC. Kathleen M. Gutman, Chief Sales and Solutions Officer, United Parcel Service Corporate.
Augusta Brown Holland, Founding Partner, Haystack Partners LLC. Michael J. Roney, retired Chief Executive Officer, Bunzl PLC. Tracy L. Skeans, Chief Transformation and People Officer, Yum! Brands, Inc. Michael A. Todman, retired Vice Chairman, Whirlpool Corporation. Paul C. Varga, Chairman and CEO of Brown-Forman Corporation. I'm George Garvin Brown IV, Chairman of the Board, and I'm also standing for re-election. I'd now like to entertain nominations for your board of directors.
Mr. Chairman, I nominate Patrick Bousquet-Chavanne , Campbell P. Brown , George Garvin Brown IV, Stuart R. Brown, Bruce L. Byrns, John D. Cook, Marshall B. Farrer, Laura L. Frazier, Kathleen M. Gutman, Augusta Brown Holland, Michael J. Roney, Tracy L. Skeans, Michael A. Todman, and Paul C. Varga.
Is there a second?
I second the nominations.
Are there any other nominations? If there are none, I declare the nominations closed. Matt, would you please describe the voting process?
Thank you, Garvin. If you completed and returned your proxy card, you've already voted and don't need to do anything further. If you did not send in a proxy card, or you did but would like to change your vote, please ask for a ballot from one of the people now walking through the aisles or from the host in your remote viewing room. In the election of directors, only Class A shares vote, and a nominee will be elected if he or she receives a majority of the votes cast.
We've got a vote.
Would the inspectors please provide the results to the secretary? Thank you, Stephanie.
To be elected as a director, a nominee must receive more than 50% of the Class A votes cast. At today's meeting, each of the 14 director nominees has received at least 98.4% of the Class A votes cast. Therefore, each nominee is duly elected to be a director of the corporation.
Thank you. On behalf of your board, thank you for your continued support. This concludes the formal business portion of our meeting. Unless there is any other business to come before us, I declare the formal portion of the 2018 annual stockholders meeting adjourned. Okay. 2018 has been another productive and busy year here at Brown-Forman, certainly on the underlying organic brand results. Not just that, capital allocation has been busy with production facility authorization to help modernize the cooperage here in Brown-Forman in Louisville. Regular dividends, special dividend, a five-for-four stock split, paying into the employee pension fund in perpetuity, securing it, and of course, the creation of the Brown-Forman Foundation. It has been a busy year. It has also been a year in which Paul Varga, after 31 years of service and 15 years as our leader, decided that he was ready to retire.
The year in which the board unanimously elected Lawson Whiting as Brown-Forman Corporation's next CEO, effective the 1st of January. Some of you may remember other transitions. I certainly remember 2003, 2005, and 2007, during which time Paul slowly took on responsibility from Bill Street, from Owsley Brown during those cadences. I go back to 2003 when I think of Paul's leadership. That is really when he would have been in charge of the beverage business, the core of our company. During the subsequent years, we got out of Lenox, out of the wine brands, et cetera. Before that, I do remember the transition from Lee Brown to Owsley Brown, and Bill Street taking on beverage responsibility. That would have been the early 1990s. I think I was living in Vancouver in graduate school, writing a thesis on electoral systems. Not the most, actually maybe a germane topic for today.
I do not remember before that, I think it was 1974 or 1976, Stuart R. Brown will correct me. Where is Stuart R. Brown? On when his dad became CEO, and Robbie Brown was chairman. Before that, of course, I do not think I was alive, but luckily, Ernie Williams, who is legal relationship manager at a longstanding firm here in Louisville that I grew up knowing as Ogden, Newell & Welch and is now Stoll Keenon Ogden, sent an article to Lawson Whiting this week from 1966 describing a transition. Naturally, not a lot has changed. It was about a man named Street, and it is Dan Street, and that is Bill Street's father. 1966, they describe him as the first outsider to lead the company. Not a word, Lawson, that we warm to. Do not worry. Not to be repeated. It was the 1960s.
What I found fascinating in the interview with him, and this is great, as the French say, "Plus ça change, ça change plus." It means the more it changes, the less it changes. It sounds better in French. He says, "There is no question but that inflation is upon us." He goes on, "When the cost of money goes up, other costs also go up." The 5'10 executive, I'm 5'9 and a half, says that, "If Britain has to devalue the pound, it will place the dollar in further danger." FX headwinds, global economic concerns, I'm being led by a man named Street. Not a lot has changed since those days. Look, as exciting as it is to see Lawson announced as our next CEO, it's always exciting when a board moves on that critical part of its job description.
Let's be honest, it doesn't mean that we're not allowed to feel some emotion about Paul choosing to retire. Look, Paul's been leading our beverage business in one way or another for 15 years. He's been at the company for 31 years, on the board for 12, 13?
15.
15. I stand corrected. On the board for 15 years. When I think of his legacy, as I would've said in different annual reports and different press releases, I really do credit Paul singularly with helping create the renaissance of American whiskey. In the early 1990s, he moved down to Nashville, which is where the Jack Daniel's marketing team was at the time, and dove into that brand, and he never dove out. He remained committed to the values of Lynchburg, Tennessee, and to all that Jack Daniel's represents for the entirety of his career. In the late 1990s, he was key in turning the brand around in its home country, the U.S., at a time when American whiskey wasn't in vogue.
If I look out across the world today and see 13 million cases and read headlines of Jack Daniel's and read headlines as to how well our industry's doing, I give Paul so much of that credit. I argue that in the wake of that, because not only has Brown-Forman felt the impact of that, obviously on Jack Daniel's, but also on Woodford Reserve, on Old Forester, and now on Coopers' Craft, on King of Kentucky, King of Kentucky Bourbon Whiskey, which has just been released. That we're not the only ones who have felt the benefits of this. 600 some odd whiskey brands have come in the wake of our success, and that brings prosperity and jobs to the supply chains, which includes farmers, and to the employees, and to the shareholders, all those different companies, and the counties in which they live and pay tax.
That's why I've argued that Paul is our most consequential CEO in this industry's modern era. Yeah. For the Brown family, that hasn't been all. Paul has dove into the complicated topic of family governance at a family-controlled public company, and he and I, in our work together in the last 11 years, I wouldn't be here discussing this were it not for the foresight and the energy and the credibility that he brought to the topic. My family and I are better partners today for Brown-Forman than we think we've been in a long time. Maybe we were better when there was just two or three of us. We're a large family, and we're a better partner than we've ever been, and that's thanks to his work, and my family and I are forever grateful.
On the back of all that, came some good news too, financially. Since he took on that role in 2003, the value of the corporation has increased sixfold. During that time, it hasn't just been equity growth, he's actually, and the board, have returned $8 billion of value to shareholders in the form of regular dividends, special dividends, and share buybacks. $8 billion is actually almost double the market cap of the corporation in 2003, which is an interesting fact. That's my version on Paul. If you were to ask Paul what he hoped his legacy might be, he would talk about his impact on the company's culture. There's something that is a private document inside the company, maybe we've talked about it publicly, I'm not sure, our Engagement and Enablement Surveys that all the employees take.
We benchmark how engaged our employees are and whether or not they feel enabled to go do their jobs against corporate America, global corporations, et cetera. In the time that Paul's been CEO, we've gone up and up on those scores in a way that should hearten you as to our future. What is public, in the world of HR, are the awards that we've been winning in places like Poland, France, Germany. I want to Is it Mexico? Thank you. Mexico as a great place to work. That's public. It's also public that in this country, Brown-Forman has been winning human rights awards for the work that we've been doing, that Paul's been doing, that Ralph de Chabert has led on diversity and inclusion. Paul would also tell you that that's one piece of work he feels like he's left unfinished. It's okay, Paul.
It's been a pretty good job, and actually, I've already witnessed a bit of a wrestling match of people hoping to take up that baton. I know we all love financial metrics because they're easy to read and define, but they're backward-looking metrics, right? By definition. Those numbers have been rolled up. They're discussing the past. The HR metrics are the only metric that I've ever been able to see that are truly forward-looking metrics for Brown-Forman Corporation. I don't know what those Engagement and Enablement Scores were when they came up with Tennessee Honey, but I know that they're even higher today, and that gives me a great sense for the future of what people are working on in the hallways of Brown-Forman in 2018 and what they'll bring to us in 2020 and 2021 and beyond.
There's also another forward-looking topic that HR gets into. It's a complex one described in two really simple words. It's called talent development. Since his early days on the board and as CEO, Paul has gone straight into the topic of his own succession planning. That's the apex of talent development. Going back at least 10 years, Paul's worked really closely with John Cook, chairman of our governance and nominating committee, our lead independent director, and all the other directors on that committee and on our board on the topic of his own succession planning. We were so excited to announce Lawson Whiting as our next CEO coming this 1st January. Thanks to all the work that the board and Paul have done on the topic in the last 10 years.
There will be other years where I'll be able to wax lyrical on Lawson, no doubt. Today is the last day that Paul will be in this setting as a CEO of our corporation. Look at all that he's done. We know the what, we know the where, the how. The fascinating question is why. Why has he done it? Why did he dive into those topics? I think it's because he's inherently an optimist on people and on organizations, and he believes that with the right set of values and the right work ethic and setting the right tone and the right transparency and the right level of trust, that he can improve the world around him. I think he's an optimist, I think he's a builder, and I think he loves organizations and people.
He'll also remind you, not only did he dive into the Brown family work because of all those reasons, but also because he's from a great family. It's such a joy to have the three of you here today, and thank you for all the support that you've given him in the last 15 years. We were able to celebrate with Paul in June at the Global Leadership Conference. We had about 200 employees from around the world come to Louisville. Sorry, I'm looking at Dr. Varga now, feeling a little emotional. We had about 200 employees from around the world come to Louisville, got to celebrate Paul. I think they had a meeting in Austin, Texas. No doubt they gave you an applause or two, probably a ribbing. I know those are some of your old colleagues from the early days.
There are events planned for this fall for Paul. Of course, last night, a variety of stakeholders on the board had a lovely dinner, and the Brown-Forman/Brown Family Shareholders Committee were able to thank Paul also. This is the last time that we'll be with him as CEO. I was wondering if you would join me in standing and thanking Paul for his leadership for 15 years. Thank you, my friend.
Thank you.
You're welcome. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you.
Very kind. Thank you.
Thank you. Wow. I've been thinking about what I might put on some kind of business card in retirement, and Garvin just gave me the idea. It's a little bold, but Renovator of American Whiskey. I mean
It's a hell of a business card. I've been trying to figure out what I was going to go do. Look, you all, thanks. When you retire, of course, people start sending you things and expressing all kinds of warm and very kind sentiments about the work there, but I thought we might just lighten it up a little. One of the fun things, everybody, most common asked questions, really a couple of questions. One is, what are you going to do? Two is, really, is Missy ready for you to retire? Those are the normal things. One thing that somebody sent me that I just thought was so fun, I'd share with you that was this quote they said to give you some hope about how much you might enjoy retirement.
That retirement is waking up in the morning with nothing to do, and by bedtime, having done only half of it.
If you want to know officially what I'm going to do, that's it. Before I get a chance to say thanks to you all, I thought I'd do what I'm charged to do, which is to give you a proper business report here. I thought because of the fact that I'm retiring, I'd probably give it a little longer view versus going through all the details of our fiscal year 2018. It's not because fiscal year 2018, the one we concluded just April 30th, I'm trying to hide it because it wasn't good or anything. It was really an exceptional year, and I thought I'd just hit on that first.
Really, if you had a chance to read our annual report or hear our earnings call at the end of the year, you would have heard that we were able to double the rate of growth in underlying sales for the year, which was a very ambitious goal we'd set for ourselves, and in fact, accomplished it, and even edged forward our underlying operating income growth. For the first year in many, Jane and I waiting and waiting and waiting for the dollar to weaken a little bit in our favor. We actually had some help from foreign exchange for the first time, and that, of course, helped our reported earnings. We, of course, had two things that I thought, which are, I think, a hallmark of Brown-Forman in general, and you'll see the word balance in there. We had really nice balanced growth geographically and in the portfolio.
It was a very wonderful, rewarding year for the company. The people who work here were able to see it wasn't just Jack Daniel's Black Label driving everything, or it wasn't just one country. It was really well spread, the development of the business around the globe and across the portfolio. That is actually a hugely important thing for Brown-Forman Corporation, because it, in fact, takes risk out of the company's performance each year if you can spread it across a number of brands and a number of geographic locations. Finally, we, as a result of all this, had a really exceptional year in terms of just our metrics. We had industry-leading operating margin, again, very high return on invested capital, which is the top of the industry, and a remarkable TSR.
I thought what I'd do before we got into some of the TSR metrics is just share with you along the way, this is a quick summary. There's all kinds of highlights and milestones, so our finance group earlier in the year was nice enough to capture it in video form, so they'll say it and show it a lot better than I could. Isn't that cool. For a long time, all of us at Brown-Forman, when they come up to you, somebody from outside the company or industry and ask you, "Well, what do you do for a living?" It'd be so fun with technology. They say, "We just do that." Just hold that up and play it, just use the music and everything. It's fun. It resulted, as I said, in a total shareholder return that was, a staggering 53%.
I'm going to say right now, do not hold Lawson to that type of annual growth. That would be unreasonable in my opinion. You can see, we put the benchmarks on here that have our competitive set within the industry, the S&P 500, big group of companies, of course, that we like to benchmark against, then a subset within it that we're in this sector called consumer staples. Think of a lot of packaged goods companies, food, beverage, et cetera. We very much outperform that sector, which has been struggling of late to get growth. Now, if you look at it, we do this every year, the same slides. If you look at it over a three-year period, a five-year period, or a 10-year period and get a chance to look at Brown-Forman, really in great part because of the super year we had.
We had been doing pretty well on these long-term metrics anyway. We had moved to the top relative to all of these benchmarks. These are just percentages. Oftentimes, we will also convert them to $. Here's a way to look back over just using the 10-year metric. If you were to have invested $100 in Brown-Forman and these benchmarks over the 10-year period, you see that Brown-Forman, particularly relative to one that I think is really interesting here is compared to the S&P 500, which is such a large collection. It's an index. It captures what reasonable investors might expect to get from an investment in equities. Generally, we were fortunate enough to more than double the rate of growth, and then the $ figure that results is captured there on the chart.
A really great year for the company, all of our people, for the owners and shareholders of Brown-Forman. I've always wondered whether you all are just bored with my talks every year, because a lot of times, maybe some different results depending upon what was going on, but a lot of the same recipe for what drove it. I thought I'd go into a little bit, pull back the tent a little bit now that I'm going to be retiring and talk to you about what the large group of us, and when I mean that, I mean the management, the board, in consultation with the family and with the support of the family, have actually tried to do. Clearly, this has been a superior investment.
As managers, we're regularly thinking about how to continue to make this a superior investment. I pulled this out from maybe back in the early 2000s, I remember working with Owsley and Bill on something. We talked about our portfolio and the company in some varying ways. We always thought that, hey, if you're going to capture through the lens of an investment point of view, maybe we could use a different investment, talk about the company through an investment style. If any of us were to go to our investment advisors and say, "Hey, I'd like to make an investment," they would ask you what your objectives are. Your objective might be, I just use this classification, growth or income, or growth and income, a hybrid. Pretty normal stuff. There's all kinds of ways one can cut that.
Those are, I think, I always feel the basics about when one sits down to think about how to invest their money. Then, of course, there's metrics you can use to evaluate how you're doing on those. These basically set the expectations for an investor based on what their choice is, whether it's growth or income. I thought, just as the example, some of this will be very familiar to a lot of you. If you chose growth, you would have a high expectation of the stock's appreciation. You may have a lower expectation, of course, of the dividends you receive because the company oftentimes is investing so much back into the company, oftentimes at early stages, to fuel superior growth. Because you want high returns, you're willing to accept higher risk. It's a pretty normal balancing act of risk, reward, and income there.
If you accept income, which is more typical of people as they move their investment style later in life or a future retiree like me, you would be looking for expected stock appreciation maybe to be low. You would not want to be taking the risk with the principal that you had. Of course, your expectation of the income would be regular and high. Then somewhere in between, there's varying hybrids of growth and income. I remember this back from years ago. What if you could have your cake and eat it, too? You could have high growth, you could have high income, and low risk. Wouldn't that be a great investment, right? From time to time, and not every month or every quarter or every year can Brown-Forman accomplish it, we would devise and talk about metrics that would measure these.
Of course, how's your stock appreciation? How's your capital going out to the shareholders? How much risk are you undertaking? How much volatility is in the stock? How much capital risk do you undertake to get the business to grow in the way that you'd like? Then can you do it over a very long period of time? About, oh, I don't know, maybe six or eight months ago, I asked Mohammed Lasege, who's here with us today, to help me look at those metrics and see how Brown-Forman would stack up against other investments. I thought, and this has become known in our company inside as the funnel chart. What this is the S&P 500 plus the industry competition that Brown-Forman has. It results in a group of about 509 companies.
You start with that, you first say, how many companies over the last 10 years were able to have price appreciation greater than 10%? It really cuts the group down. It sort of surprised me that it cut it as much as it did, but it cuts it down to 138 companies. Then if you risk adjust it, and the one we use here is a measure I won't go into called beta, but there's all kinds of ways to think about risk, capital risk, et cetera, concentration risk. This particular metric cut it in half down to 68 companies. Then if you talk about getting the cash out, as Garvin referenced, we have been very successful and been fortunate to be able to provide the type of capital distributions through dividends and special dividends over the years.
If you measure that, the one we use is dividend yield, and this includes both the regular and special dividends. It cuts the group of companies from 68 down to eight for those who had a dividend yield greater than 2.5%. Then if on the measure of consistency, if you then track how many of the companies increased their dividend for 25 years or more, these are called the Dividend Aristocrats, and it's actually an index fund. Brown-Forman is in its, I think, 32nd year of increasing the dividend each and every year. It cuts the group another 25% down to two companies.
If you do the ultimate measure of what I consider of risk and reward balance in a ratio, it's called return on invested capital, and look at the standard of greater than a return on invested capital of 20%, only one company remains at the bottom of the funnel. We get such joy out of thinking that we were able, over periods of time, to manage both risk and reward for shareholders to yield this kind of circumstance. Now, two things after I saw this chart, when Mohammed was sitting in my office taking me through it. One was, I should have been using Mohammed for my slides for years is one. Two was, it's a hell of a time to retire.
More seriously, you all, this happened against a backdrop, as you can imagine, that if we look back over these years, and this slide will look the same 10 years from now and 20 years. Things happen in the world. The thing that we've tried to do with Brown-Forman is run the company in a way so that it could navigate whether you had tough currency times or whether you had global economic crises so that we weren't so leveraged on the balance sheet. We've tried to run the company in a way so that we could benefit when the winds were at our back, and we were not hurt so badly when the winds were at our face. The modern one that everybody's talking about, of course, are these tariffs that are in the news each and every day.
I just thought I'd share with you that we're giving a proper and appropriate attention to that. Our teams are very busy analyzing and trying to do, as you'd imagine, at Brown-Forman, a very balanced approach to how to think about pricing. It fundamentally comes down to pricing and value. I'm really pleased and proud of the work that Lawson and the teams are doing right now to hit just the right sweet spot. The most important thing they're doing is giving us flexibility and lots of alternatives because it's so uncertain how that tariff topic will go. My advice to you is look at it against a long-term horizon, as this company largely does, and there's no need to freak out.
One of the things that gives us so much hope is actually the reality of this, that the global opportunity for the company, one of the reasons we've been so successful is the ability to take our leading brands, most driven, of course, by Jack Daniel's, around the world. That opportunity, particularly in the world's emerging markets, remains enormous. It remains enormous. This is a sampling of the portfolio that I know Lawson and the teams will be taking out to the world, and we think there's a lot of continuing growth. There's one statistic, putting aside even the global potential that remains for Jack Daniel's and our American Whiskey portfolio, even in the hyper-competitive U.S. right now, this statistic should give you some hope. This category, American Whiskey, hit its peak in the U.S. of volumetric consumption in 1970 at 80 million nine-liter cases.
From 1970 to the year 2000, it declined to 32 million cases. That was basically the surge of vodka consumption in this country and people switching out of spirits to beer and wine. Fast-forward to 2000, since 2000, every single year, American Whiskey has grown through to today. It has only grown back to the point where it's still below 50 million cases. We are still 30 million cases of American Whiskey consumption below the 1970 high point, and there are vastly larger numbers of people in this country to consume the product. The per capita consumption is still very low by historical standards.
If I'm Lawson and the team's looking at this, there's a continuing huge opportunity in this country alone, and then you put aside that we're only 350 million of the seven and a half billion people in the world, we've got a long runway. This is the thing that excites us so much about it. If those of you had a chance to just glance at the annual report this year, I thought I'd just give you, there's so many ingredients in Brown-Forman's success. I thought I'd just highlight five and reference them real quick. One has been, you've seen over the years us report on the fact that we've actively managed our portfolio. A lot of times people mean, with that, they're just out buying things. Well, we've been buying things, we've been selling things, and most importantly, too, we've been creating things.
That'll continue to be really important to the success of Brown-Forman going forward, the innovation within trademarks. Again, I think we continue to have great runway there as well. There's lots of ability. We were in a presentation yesterday where Campbell Brown was sharing the portfolio development of Old Forester. It's been spectacular just over the last few years, and that'll continue on the Woodfords and Jack Daniel's and Herraduras and Sonoma-Cutrers of the world. There's a lot of room for portfolio management still today. Superb brand building. Just because you have what you think are the right things in your portfolio doesn't mean they're naturally going to grow. The company has to do the right work to build them.
If you just look around, I was just trying to think about some of the things we've had the opportunity to highlight over the years, whether it's the, I don't know, the thing we were in yesterday, which is the new Old Forester Distillery and homeplace in downtown Louisville in Whiskey Row. It oftentimes, for me, begins with the product itself. Our distillers and our production operations, all of our colleagues across all of those operations are exceptional at getting the right product in the bottle because that's the true test. Our package work, as I said, the homeplaces, some of the excellent advertising, the work that's been going on at the Jack Daniel's distillery around advertising and the returns to, I think, Jack Daniel's roots in terms of the way it advertises and promotes its authenticity would be shining examples, along with the sponsorships.
I don't know if you all get to see much of the coverage this year of Woodford Reserve's sponsorship of the Kentucky Derby, but another example of the types of brand building that will continue to be important to Brown-Forman. If you run a good business and you're fortunate enough to have it continue to grow over time, it throws off money. The other test of our team has been, do we deploy it well? Do we put it to good use? The investments I've been talking about, we sort of held our breath because we looked, this was five or six years ago, and said, we're going to be putting a lot more money into capital, to reinvesting in our core business, whether it was inventories, expansion of plants, building new facilities, all of that, and we're nearing the end of it.
We continue to invest in the business in big ways, but it's been a period of very significant capital expansion for us at the company. I think more than anything, that has set us up for the next 10 to 20 years of growth. Those are important investments to make well in advance. Garvin highlighted some of the capital distributions. In concert with the board, we work so hard on this topic of capital deployment, and I think our track record by being flexible, which is really important in this, but also making the right investments at the right time, has served the company well. It might sound funny to highlight this part of it, but I think it's just so important not to take it for granted. A huge ingredient is the governance system.
This triad of the company's management in partnership with the company's board, in partnership with the Brown-Forman family and shareholders generally, has served the company so well, and I consider it very strong and developing still, continuing to develop. I think it's not conventional all the time, but I think it's an asset for the company to do it the way that Brown-Forman sees fit, to ensure that we continue to grow the company and build the value of the company over a long period of time. I think this system that has been put in place, Garvin was referencing it. We worked hard at this, learning from Bill and Owsley and the boards before us.
It was really important for us to make advances on that, mostly because of the fifth and sixth generation of Brown-Forman family, who wanted to be engaged and be active and strong owners and shareholders. A lot of work has gone on that front, as Garvin mentioned. Of course, the last piece, Garvin did mention my interest in this are the people and the culture. None of it happens, none of those first four happen, unless you have a culture where good people can thrive. We've tried to do that as much and with regularity as we could. I really do think it is the magic ingredient. If this can continue, I think it will advantage the company relative to many of its competitors in the marketplace.
Speaking of great people and a great culture, this is one of my favorite pictures. We have announced that Lawson will be running the company January. He's an excellent choice, you all. I've worked alongside him. Just to gush a little bit about him, not has he done everything. The resume he has is incredible in terms of the number of experiences, it's more than that. He really has the smarts and importantly, the values. I'm sure he feels the way I do. It's great to encounter a place when you're as good a person as he is, to encounter a place like Brown-Forman, because you match up with it. He is the right choice, I will say he, in partnership with Garvin, like Garvin and I have partnered over the year.
They have a great relationship, they'll be superb, I think, atop the Brown-Forman governance system for years to come. These are the most important decisions the board and the leadership of the company make is to who to put in charge to make the good decisions, to set the tone, et cetera. I'm just going to tell you, we've made an excellent choice. Congratulations, Lawson. I'm going to finish by just basically doing the opposite of what Garvin was so nice to do, here's just to thank you all. When you're about to retire, Jim Welch had told me this. He said, "You just have this overwhelming urge just to thank people." You just want to run and go, "Thank you, thank you, thank you." I've been doing that for pretty much the last eight or 10 weeks.
I thought I'd be a little comprehensive here today. I love this picture, too. I want to thank Bill and Owsley. Neither, of course, are with us this morning. They put me in this job. I don't know why, I don't know how they decided to pick me, they did. It was really an amazing course that they had set the company on. They had really set the company on this amazing course, they entrusted a whole bunch of us, with me as the CEO, to go run Brown-Forman. I'm going to tell you a funny story about how I might have been destined to work at Brown-Forman. I was at business school in West Lafayette, Indiana. I went to get my master's at Purdue, there was an internship opportunity for Brown-Forman.
I came down and worked for the summer, ended up joining the company. I didn't think about it till years later that somebody was inquiring about something or whatever, I had to go back, I looked at my addresses. While I was at Purdue University, the road I lived on was Brown Street. Go figure. We put the cover of the annual report on here. That cover of the annual report, when designed, was intended to honor our brands. I'm going to tell you, it honors a lot more than our brands, it belongs right there next to that picture because those two people are icons of American whiskey, to be sure. I thank them. I'll be forever indebted to them.
You also, of course, want to thank. Look, the pictures, I could have 100 of them to thank people. Here is our board from this year's annual report. You see here the family committee. It's changed quite a bit over the years. Our leadership team, all of us always in dynamic and in flux. One thing, not only just thank you to the board for what you've done to support me, I'll tell you the other thing is that seeing Chase and Anna, and where's Martin and Sandra. Also have stayed regularly in contact with Don Calder and Barry Bramley and Steve O'Neill. It's really, if you think, Dick Mayer, people who played a prominent role in the company's development who are no longer on our board or aren't as active being here in support. Those people, too, are very important.
This is a picture of fifth-generation family committee, of course, Garvin and I, and me particularly, had a chance to work with a lot of fourth-generation family members, very appreciative of the support over the years. Christie, particularly, all those times you and I have talked about life at Brown-Forman. I will say that none of this happens at the company for one individual or for the whole company without this kind of support system. While Garvin was nice to reel off all those nice stats and everything, this group right here is the group, and they'll tell you it's the group that they lead. This is the group that has helped drive Brown-Forman to the heights it's at.
I mean, this executive leadership team, this one's a big group. People are like, "How do you have such a big team?" all this kind of stuff. We make it work. It was important to draw on as many great talents and develop. Part of this was for development, to develop people so that with the knowledge I would be moving on and others would be moving on in time, that we would have great people to continue to lead Brown-Forman, I think that's the case today. Ever dynamic, we're ever appreciative of all the people that have helped the company produce the results that it has. Of course, Garvin was nice to recognize them. I was sitting there thinking, my kids aren't here, I was trying to remember if they had activities or they're just in bed. I mean, they are teenagers.
I have a feeling I know one of them for sure is in bed. Anyway, as all of us know, the sacrifices that families make so that executives can be executives are immense. This is the answer to one of the questions: What are you going to do after you retire? Some of this right here. I feel like we've been down here for so many years and serving this company and this family. Going to go serve this family now a little bit. It's going to be fun. Let me finish you all by saying this. I said it last night at the. We had a great dinner last night, I said it that it's been a privilege to lead the company. The word privilege is important because I used a statistic last night, it is true.
If you just use the world's population of seven and a half billion, you think that maybe 6 billion people are out there looking for good work. I had some good work. Only 50,000 public company CEO jobs exist in the world, I got one of them. Then I started thinking about that, how rare that is, I started thinking about what are the chances of, within that 50,000, coming across this place where it aligned with my values. I will tell you, I was raised by this man and my mom to be good, to be kind and respectful. I'll tell you that finding this place where that exists each and every day was the key. It is such an incredible place. I have this saying, I like to say that the key to greatness is countless acts of goodness.
At Brown-Forman, you regularly see it. You regularly see goodness. It's not one stroke that makes Brown-Forman great. It's this repetitive nature of people being good to each other. More than financial, I mean, just generally speaking. I remember talking to one of my business parents, Owsley Brown, right before he was retiring, I asked him, I said, "What is it you're going to remember the most? What are you proudest of?" I was expecting him to say, "Oh, the international development of the company, the total shareholder returns," something that was a metric.
He said it was, "Hey, it was the ability to find what I was good at and do it for my own enjoyment and then for the benefit of many others." I said, "Well, that's an interesting thing." He said, "Well, because that's the key to happiness." I said, "Well, that's interesting." Of course, back then, I mean, for a long time, he had written his speeches. I memorialized that. I said, "I'm going to try to say that." I got it short to, "Discover your gifts, use them without fear, share them with others, and joy shall appear." I hope that you all have derived as much joy from me as I have from you. Thank you so much, so much for enriching my life. For one last time, let me just say thank you. Thank you all. Thanks. Thank you.
Thank you. Thanks. Thank you all. Now we get to go do the brand fair.
Any questions?
Yeah, any questions? That's true. That's great. Hey, you all. Look, we do have, as tradition, we have a wonderful brand fair set up. It's in the traditional place over in our design center. We really want everybody to come. It's very relaxed. I mean, all you do is just show up and enjoy the booths and the people. There are people to answer questions for you. The board is going to be circulating, as will a lot of our executive leadership. If you have questions about anything, they're very well-schooled. They know how to handle everything. Feel free to interact with us. Thank you very much.
Thank you.