Brown-Forman Corporation (BF.B)

Investor Day 2014

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Dec 10, 2014

Ladies and gentlemen, Jay Koval, Vice President, Director, Investor Relations. Good afternoon, everyone, and thank you for joining us today for Brown Forman's 2014 Investor Day. We couldn't be more excited to have you here today as we lay out our plans to further develop our leading portfolio of American whiskey brands around the world and drive the next decade of outperformance. We've got a full afternoon planned, so let's quickly review our Safe Harbor language and then look at the agenda. Today's investor presentations contain forward looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated in these statements. Many of the factors that will determine these future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward looking statements and the company undertakes no obligation to update any of these statements whether due to new information, future events or otherwise. On this page, we've listed a number of the risk factors that you should consider in conjunction with our forward looking statements. Other significant risk factors are described in our Form 10 ks, 8 ks and 10Q5 with the Securities and Exchange Commission. Each of you in the room should have today's slides in front of you. And for those of you who weren't able to join in person, the meeting is being webcast and our slides have been posted to Brown Forman's website under the Investor Relations tab. So with that, let's turn to our agenda for the day. Paul Varga, our Chairman and CEO, will kick off the meeting and presentations will run until roughly 2:30, when we'll have a quick break for you to check e mails and use the restrooms. After the break, we'll return for additional discussion and presentations before having Jane pull it all together with some numbers. We're targeting open up the floor to Q and A at roughly 4 p. M. And then we'll wrap up at 5 p. M. So you can enjoy some of our great brands during the cocktail reception. Before I turn the floor over to Paul Varga, I wanted to share a video that summarizes what an exciting time this is for Brown Forman to be the leader in American Whiskey. It's very simple thing. It's beautiful spring water, grains, corn, malted barley, fried, which is then put into a brand new white oak barrel and then aged through the hot summers and the cold winters, many years later put into a bottle and sold. And then we open the bottle and we pour a little into a glass and we sip on it and somehow all that has led up to that moment when we are sipping that whiskey somehow means something. It is The boom continues in downtown Louisville with yet another major announcement. Ron Foreman plans to invest some big money in 30,000,000 dollars in revitalizing history. I see a set of brands that really feel right in the hands of Brown Forman. They've all got a sense of place. They've all got history and tradition. They're all open to innovation. These are really special things in the world. And I know I'm not the only one that feels that way, but I'm glad to be one of the ones that feels that way. Ladies and gentlemen, Paul Varga, Chairman and Chief Executive Officer. Well, good morning, everyone, or good afternoon now. It's our pleasure to welcome you to a conversation that I don't think needs a lot of introduction from the theme that you saw there in that video. I think you look at the backdrop I've got here behind me, and of course, in traditional form for our industry, barrels and bottles of bourbon, which sets a theme for what we're going to talk about today. We will talk about, in fact, Brown Forman Corporation, but the specific focus because of many questions we receive from you and others about what's happening with American Whiskey. So we thought we'd spend the majority of our time today to actually talking about that. You saw on Jay's agenda that you'll hear from not just me but a number of my colleagues in the leadership ranks, the Brown Forman today. We always enjoy hosting you either as small groups or as individuals, whether it's here in New York or some other facility. Sometimes our own production operations are in Louisville, Kentucky at various times. And so this is another such opportunity for you to get to know Brown Forman, but I hope you'll get to know more of the people that sometimes you don't get to see through your individual visits and experience with the company. And you saw that you'll hear from 10 of us and but there are more than 10 here today. And during the breaks and particularly afterwards the reception, you'll have an opportunity to talk to all of us more closely. And there's just particularly 2 people that I wanted to introduce who weren't on there who don't have formal speaking roles but will be around for the remainder of the afternoon, which I just think you all might enjoy getting to know. One is Chris Morris, who many of you would have seen or met before. He's our master distiller and is really chock full of information as it relates to the making of our products. And one of the reasons that we think that this revitalization is going on in American Whiskey is because of what's in the bottle. And Chris, better than anyone, can be articulate on that topic. As well Campbell Brown, who is one of the Brown family members, the founding family and controlling family behind Brown Forman today. Campbell oversees our Midwest division in the United States, so he's very current on the United States business. But he's also really integrally involved in the work of the Brown family and its engagement with Brown Forman. So there's a lot that you might be able to and Campbell and Chris have both worked all over the world for Brown Forman at various times, so they're intimate in terms of their knowledge about the company. So I just want to make sure you're aware of them. In addition to all my colleagues who you'll hear from. And there's a nice section at the back of the presentation book that you have that have bios of all the folks that you're going to hear from. So I just found it useful to read about them and find out things about even my colleagues I didn't know. So interesting to have that as a reference point as well. I'm just going to start us out and hit, I would call it, maybe skimming over what you will hear over the next couple of hours from the representatives of Brown Forman here today. And I know this is like playing your ace in a game of cards right off the bat, but I thought I'd just share one slide we've used. This is a representation of the company's total shareholder return relative to a number of competitive benchmarks we utilize and have been doing this over many, many years. And what you'll see is the company's TSR relative to these benchmarks over 1, 3, 5 10 year horizons. And while it's not even an ambition of ours to always be number 1 no matter what the period, it just so happens through October 31, as it was, I believe, very close to it at the end of April, that the company compares very favorably on this metric to very relevant benchmarks we think for our company, which includes the public company competitors around the world that we track, a composite for the competitive set, and we also look at the S and P 500 and also wonder like you might and that's what today will be about is why. Why has Brown Forman consistently performed well against these wonderful benchmarks? And why has it been so consistent? And so I thought I'd take you through just a few summary slides as to why I believe that the company has continued to do as well as it has on these metrics. And it starts with some representation of the business generally. I always feel like for any business or any investment we make or that you might make in us that you consider isn't an attractive business. And on this particular chart, what I'm going to plot for you here are simply two things that we hold very high in terms of priority, which are the returns on invested capital and our operating margin. And I think using a 2 by 2, as we've done here, what you'll see is that you'll I believe see the efficiency with which we produce profit for the capital that's outlaid or for the sales we generate. And so what I'll first thought I'd show is using the benchmarks of the S and P 500 and Consumer Staples, you see pretty nice margins overall on average for the S and P 500 and for consumer staples, a little lower but higher ROIC. When you compare our industry overall, what you'll find is that the industry has a much higher operating margin, so obviously much more efficient in the production of profit from its sales and on par with the S and P 500 with the low consumer staples on the returns of capital. And then on Brown Forman's front, because of the nature of what you're going to hear today about our SKU to American Whiskey and to this magnificent Jack Daniel's brand predominantly, Brown Forman is at the higher end, the highest end against these benchmarks of both operating margins and returns on invested capital. So it shows that we, at the start, have a wonderful, we consider to be business model and a business worth investing in and perpetuating. Now just because you have this doesn't mean you can grow it. We all can think of wonderful businesses that at times have a difficulty growing. So I think the second attribute that I would highlight that underpins our TSR is looking at our track record of growth. And in fact, if you compare it to these same benchmarks and this chart here will compare when we stopped the clock in April 30, our FY 2014 growth and we'll compare it to the S and P 500 consumer staples in our industry set, which were low single digits. And Brown Forman, as we completed last year, had operating income growth just over 10% at 11%. And then just to be fair because 1 year doesn't always make a story, When you look at these same metrics on a 5 year basis, you'll see that Brown Forman has a solid advantage relative to all these benchmarks. You have an excellent business that has a track record of excellent growth. So the combination of those two factors should be enough typically to make you want to invest behind your business. I think a third attribute that we always add in is the degree of risk undertaken in order to achieve those rewards. And you might always find this to be an attribute, particularly of family controlled companies, but it certainly is an attribute of Brown Forman. And again, against the same competitive set and using 2 metrics for risk here, one earlier that as I showed the returns on invested capital, which are very nice for all three of the benchmarks. Brown Forman in the low 20s compares very favorably. So very capital efficient, so less capital risk associated with us relative to a number of these benchmarks. And then additionally, on the just on the borrowings of the company as it relates to debt to EBITDA ratio, you'll see just the efficiency with which Brown Forman has lower risk as it relates to the balance sheet. And so when you put all these things together, I think from a just pure financial metric and ratio standpoint, it underpins the story of Brown Forman. And I think what I would like for you to hear today, you'll have an opportunity to ask lots of questions about this is, can we continue this? Is there opportunity ahead of us to continue this track record of really growing at a relatively low risk and excellent business. And it doesn't mean there's not a lot of competition, not a lot of bumps along the road, but our track record, we feel, is pretty good. So it's a wonderful time to talk about the corporation and the industry. Now this differential performance, we would have discussed some of this on just even last week when we released our midyear results for this fiscal year. But I think that what the difference that we would describe really falls into 3 buckets: 1 being our SKU toward the very attractive American Whiskey opportunity that we're here to talk to you about today. And within that, our SKU within American Whiskey to what we consider to be one of the world's great trademarks of any kind, which is Jack Daniel's. So that would be one reason for our and the fact that our company is in fact more skewed not only to this category but more dependent on Jack Daniel's than many of our competitors are, dependent on their leading brands. So we really are in some ways, we've become a very concentrated company, particularly after the sale of our consumer durables in our wine business a few years back. 2nd is the global breadth and diversity of our business now today after spending the last 25 years or so on a globalization effort. And I would say that, of course, the benefits of being as broadly distributed and broadly appealing as Brown Forman through the Jack Daniel's trademark is today is it gives us larger populations to whom to sell our products, It gives us longer runways for growth, which is important for an enduring company. And very importantly, when you have a hiccup in one country, such as this year's the issues that we've been public about and you would have seen related to like say Russia or Poland, you can have other countries pick up the slack and continue the growth of the company. So the diversification that comes from this breadth is really has been really important to the company as well. And then finally, particularly when you're as concentrated in American whiskey as we are and it becomes a basis for innovation, particularly on Jack Daniel's, you can have if you have a relatively small portfolio compared to your competition, when you have successful innovation, it will show up in your results more prominently than it might for other companies. And so in the cases of here Tennessee Honey or you see Gentleman Jack or Woodford Reserve Double Oak on a smaller basis And even last week, we announced the rollout from an earlier market test on Jack Daniel's Tennessee Fire. They have possibilities and opportunities for these flavored extensions. So we really think the combination of our concentration to American whiskey, the basis for innovation that, that provides and the impact of that innovation as well as the global reach and diversity of our company are the 3 primary things underpinning our differential performance versus our competition. It would be erroneous on that part not to say that the people at Brown Forman aren't also part of the difference. And if you think about it, I mean, we uniquely have our trademarks, and we uniquely have our people. And those are the 2 things that a lot of companies in the brand building business bring. And I know it's a cliche to say that the people make the difference. But here, when I talk about people, I'll talk about 2 things. 1, the employees of Brown Forman, and we've got a cross section today of a few of us. And I'll give you one sort of interesting set of statistics from the agenda that you just saw. The 10 people that are going to talk to you today, they have a combined 165 years of experience at Brown Forman. They've worked at greater than 20 companies before joining Brown Forman. And on average, our executive group at Brown Forman is still in its early 50s on average. So one of the things that I think is nice about that, you get experienced people that still have runway to utilize that experience on behalf of the company against the opportunity we're going to describe today. So I think the people and the continuity, and it's not just the people that are in this room today, you can replicate this if you go to virtually every continent where we do business today. I think the other thing, and you'll see them represented in some ways in these photos, you might recognize some of them, is the family that is behind Brown Forman. We consider this to be a significant advantage, I mean, a significant advantage. And this would have been represented here just in the last year where we saw our largest volumetric competitor in the American whiskey business sold. So the family and their commitment to the enduring growth and prosperity of Brown Forman and being able to take that longer view, particularly in a business that ages its products, is a huge advantage we feel for Brown Forman Corporation. And we'll talk at various times throughout the day about the family. You will see as we make some of the transitions between speakers today, you'll see videos that describe the company and the American Whiskey opportunity and represented the voices in many of them are actually Brown family members who are the people articulating their feelings and sentiments about the company and the opportunity. So I'm going to close by really just saying in summary, when you think about us or when we think about ourselves, so it's probably putting us both in the same shoes, we think that the corporation is a unique investment opportunity today. And there's you see a summary of just what I've talked to you about, but it really does go to the portfolio that we have concentrated in this area of an American whiskey with a global opportunity. We think that we've said this before, particularly as we have globalized the company, we think that the concentrated nature of our portfolio and the focus of our people, particularly behind the Jack Daniel's trademark, when I think of our global competition, I do not know of a single competitor who is so exclusively concentrated with their focus and attention on a trademark like Brown Forman is around the world behind Jack Daniels. They have much larger companies and they are oftentimes dividing their attention between any number of categories and brands because of the size of their portfolios. We really feel it's an advantage to be this laser like focus on American whiskey and very much in many instances the Jack Daniel's trademark. We think another very important part that you'll hear from Alex Alvarez say is, we take for granted sometimes because we've been in the business so long that we've got all these assets, The production and manufacturing assets, the integration into barrel making, these are a huge advantage particularly today for our company as we seize this opportunity. And I also thank you've got an experienced group of people not only here in the room with you today but around the world for Brown Forman that can bring this to life supported by a wonderful family who wants this business to go on and on with the sort of returns and success that I've highlighted for you here today. So that's the background of what you're going to hear. You're going to get into it in much more detail. Again, it's our pleasure to welcome you here. And then I'm going to bring up our Chief Brands Officer and somebody many of you will remember from his Investor Relations Day, Lawson Whiting. Thank you, Paul. Good afternoon, everyone, and welcome. Good to be here again. I know I've seen a few faces here I haven't seen since I was in that job, and that was 11 or 12 years ago. So if you're still around and you've been with this company for a long time, I hope you've been doing a great run with us and look forward to today talking more about why we think future is just as bright as some of the things we've done in the past. So Brown Forman really does have a leading American portfolio. And one of the things we're going to try to talk to you about today and all the different presenters are going to talk about is why. So not only the results in commentating on what you have seen, but why we really believe that this portfolio is so great and why we think it continue to grow into the future. So I'm going to focus my comments today on both the categories and why the whiskey business itself is a good business to be in and why we have so much confidence in it. I'm also going to talk a bit about, say, why consumers are increasingly attracted to the category. That's something we're going to try to put some more color around as to what is it that's driving all these new generation, if you will, of consumers into the category. And lastly, I'll focus comments on both Old Forester and Woodford Reserve, 2 of the most important brands within our whiskey strategy. And then I'm going to hand it off to John, who's going to come and talk more about Jack Daniel's and everything that we have going on there. So now whiskey is the growth leader in spirits, as we would say. If you want to be in the spirits business, whiskey has been the largest category in terms of growth, both on percentage and absolute cases over the last 10 years. So much better than brandy, rum and certainly better than tequila and gin. So it's been a good category to be in on a global basis. So once you're within whiskey, the price points that we can look at both standard and premium plus and then there's also obviously the value categories and others. But if you're going to be in whiskey, the best place to be is premium plus and that's where most of our portfolio at least starts and we go up from there. So we're excited that we're in a great category called whiskey that is big. We're in a category or at least price points that are very attractive and showing sort of caught mid single digit growth rates across 3, 5 10 year periods. So these are really sustained periods of true organic underlying volume growth across a long period of time. And then also, so we like whiskey, we like premium plus whiskey and then within all the whiskey categories, we really like U. S. Whiskey or American whiskey. And if you just look at that, you can see incremental cases over the last 5 years. The U. S. Whiskey has delivered the most case volume growth of any of the other categories. And scotch, which is multiple times bigger in aggregate than U. S. Whiskey, It's still exciting and growing, but it is not holding up to the pace that the American Whiskey brands are growing. So certainly Irish has been an attractive category and others also, but U. S. Whiskey has been the best place to be over the last say 5 years. Now that was the last 5 years. I'm going to back up and do a little bit of history over the last about 50 years, what we often call the Golden Age and then into the Dark Ages. So if you go back, this starts in 1952, if you can see it on the screen, when whiskey was the predominant category in the United States, much bigger than all the other white spirits categories combined, and it was the golden age. There were lots and lots of brands, a lot of brands that possibly don't exist today, but they've gone away. But there were a lot of brands that got very, very big and it peaked around 1970 and then it moved into what we call the Dark Ages. So Dark Ages where a lot of brands went from 1,000,000 case brands to nothing or 1,000,000 case brands to 50,000 things like that. And we owned a couple of them. Honestly, Old Forester and Early Times both got caught up in that. And it was a very difficult time. If you look at the top, say, the top 10 spirit suppliers back in 1970 and then who they are today, the vast majority are gone. They've either combined or merged with somebody else or sold out altogether. So and I do think it's always interesting is how did Brown Forman make it through the dark ages when we were such a and have always been largely a whiskey based company. I mean, it was simply the power of the Jack Daniel's trademark that in 1970, the brand was actually relatively small and had about a 2% share of the U. S. Whiskey business or whiskey sold in the United States that had about a 2% share and it's about 10% today. So while Jack Daniel's was able to transcend the different categories and compete and compete very successfully with the vodka brands and tequila brands and others that were growing through those times, a lot of other whiskey brands in this country went away. So taking a look a little bit, so that was a 50, 60 year sort of window on how whiskey has developed in the United States. Let's look at the little bit shorter term. So but it really started to turn around 2010. So we've been in this pretty long period of decline as a category and then it started to slowly build up again. And we saw accelerating percentages of growth all the way through this is IWSR through 2013. And if you look at any of the consumer takeaway data in the United States right now, those types of numbers are continuing through 2014. So we're really, really excited about the shorter term growth that or the recent results I should say in this category, plus 6% and volume growth is tremendous figures. Now if we take that 6% and we split it up, it's about half flavors and half more traditional mostly Kentucky bourbons and Tennessee Whiskey. So it's been a very balanced growth over the last few years and we're quite excited about that because we think it really does provide or bode well for the future. So we talk a little bit about why. Why is this generation discovering whiskey? And then importantly, how long can it go? Or do we how much confidence do we have that these trends are going to continue? And I'd cite sort of 3 big buckets of reasons why we do believe that this generation is governed whiskey. It starts with taste. We believe we have authentic and interesting brands and premiumization. So let me tell you what sort of within each of those what we believe or what I believe. First of all, taste. Flavors do broaden consumer appeal. We know that we are bringing in new consumers into new occasions and it's just an easier taste to acquire. And as much as I love to drink a nice bourbon on the rocks, we know that younger consumers in particular struggle with that in some cases. And so we're making it easier for them in a lot of ways and making flavors into a broader appeal. So that is important. And we know that through all sorts of research that millennials over index into these flavored brands, different multicultural consumer groups over index into these brands and so do just millennials in general. And so we know we're bringing lots of new people into the franchise. The other important part, I think, or one of the other important parts is authentic and just interesting. And interesting may be a sort of very general word, I guess, on why we really believe in this category. But I think it can best be described is because one of the questions we get is what about beer and craft beer and now you've got 50 different all 50 states have their own craft distilleries and they're growing and there's lots and lots and lots of them coming up every day. But what makes us think that what's going to happen what has happened in beer over the last say 10 or 15 years is not going to happen in whiskey? And I would submit a couple of different things. 1, I think if you go back 10 or 15 years and look at beer, beer is by nature it is meant to be tasted the exact same every time. It comes to you either in a can or off a tap, but it is meant to be the same temperature and generally have the same taste every single time. And people didn't you have a couple of brands who might put an orange slice in there or a lemon or whatever. But largely, it is pretty much the same thing every time. And I do think that they were open up for innovation and competitive reactions or people trying to get into the beer space because as they could and because consumers were looking for something a little bit more interesting. We have a different situation. I do think whiskeys are a little bit different. 1, you've got the natural barriers to entry, which others are going to talk about today. Just the general nature and the capital intensive nature of getting into whiskey makes it harder for people to get in quickly And particularly if they're looking to make a true high quality, say, a bourbon in this case and want to wait 4 or 5 years, it's a very expensive undertaking. And so there's some natural barriers there. But just as importantly, I think that whiskey actually is interesting in that you think about the media. The media is covering it like crazy. Think about bartenders. Bartenders love to talk about whiskey these days. They love to make great whiskey drinks. And so if you're a mixologist, if you're in Manhattan and you're at one of these sort of high end restaurants or bars in town, serving beer doesn't really check your mixologist credentials, if you will, where making an old fashioned really does. And I think that interesting element to it is a bit of a barrier to keep from lots and lots of brands coming and encroaching into our space, if you will. So because consumers still find it to be such an exciting place to be, the entree continues to find an exciting place to be in the media and everybody else is covering it, we really do think we've got a bit of a defensive, not a defensive nature so much, but we really do believe we can defend our turf. It's a better way of saying it. So we do think our future is a little bit different than maybe what's happened in beer over the last few years. I don't want to say we're naive to it. I mean, we're not watching it and thinking about it and talking about it a lot, but we do believe that we've got some very defendable positions here and we do think we'll continue to be successful. The other factor is just premiumization in general, which is happening across lots of consumer products categories, but has it has been happening in spirits for a number of years, but it is really happening in whiskey now. If you look at the growth rates of the brands that are up there in that super premium and ultra premium space, the growth rates are phenomenal. And I think that brings excitement into the category. It makes there's something to graduate to. There's different profiles, we call them different grains that you can play with, different ways of drinking the whiskey that just keeps it exciting and interesting and new. And so I think we put those three factors together and we really do believe that we've got a long term runway in front of us. Now so how do we play in that in this space? And this is a graphic, a 2 by 2 that we've used internally a number of times to talk to our even our own employees, but thought we were bringing out in front of you because it is a little bit of a different way to look at the whiskey business. So price is on the y axis and then we've got grains off to the right and flavors to the left. And we basically we all know it starts with Jack Daniel's Tennessee Whiskey in the center of it all. And then we look at our portfolio as we go around this wheel. So as you look at sort of in the lower left box, they tend to be less expensive products that have a little bit more flavor. They're bringing lots of people into the category, different occasions, different ways and formats that you can drink the products. You've got your Honey and Fire in there. And then moving up sort of if you just kind of go around like a clock up towards the upper right, you've got all our super premium and ultra premium products, most of which are growing at very, very rapid paces right now and are great businesses to be in. So we look across our portfolio and you've got Southern Comfort in there in early times and some other brands, Old Forester and Woodford Reserve are also in there. So in total, we feel like we've got this space pretty well covered, but there is still white space in there too. Whether you go to the upper left, I do think that there's potential opportunity for flavors at a higher price point and we may go play there or we may go bottom right. People have avoided sort of that space for at least the time being because when you talk about different grains like a rye or wheats and things like that, there's not enough of it out there. There's not a lot of people selling at real cheap prices, but there's certainly a lot of consumer interest in these different grains and we think that there'll be long term opportunities to play there too. So now I'm going to talk a little bit about a couple of brands. 1, first Old Forester and then into Woodford Reserve. Old Forester is the founding brand of Brown Forman. It's been around for a long, long time and it was one of those brands I mentioned earlier, the dark ages that started to decline back in 1970. We unfortunately got caught up in that. This is actually a graph. This is what Old Foresters trends have looked like over a 40 year window. Not something we would typically show at a conference like this, to show that a brand went from 1,000,000 cases down to 100. You think what are you doing? But about 2 years ago, the tide started to turn. And given this is our founding brand and how much we as a company are associated particularly in Louisville or in Kentucky with it got excited again on this brand and it started to turn. And we saw decent growth last year and it is just accelerating again this year. And interestingly, actually one of the fastest growing markets for this brand in the entire country is Manhattan. The bartenders in this city have taken to this brand in such a way that gets us very excited in terms of the long term potential for these brands. It is a very when I talked about the Old Fashioned earlier, but the Manhattan other sort of high end cocktail drinks that these mixologists are making, they're using Old Forester for it and it gets us very passionate, gets the company very excited about it. So you would have seen in that opening video before even Paul came up some of the news reporters talking about building a new Old Forester home place and distillery in Downtown Louisville on Main Street for those of you who've been there. So we bought this property almost and we're going to build a new distillery something we haven't done like this in a long, long time. We're going to build something that's just going to be out of this world, fantastic consumer experience. And I do think it shows and we're putting $30,000,000 behind this thing at least to develop what is a great consumer experience and interaction with this brand and take it sort of take it back to the next level. So we'll see. We're going to try to get it back to its eventually to its 1,000,000 case mark. We'll see. That's a long way to go, but we're quite excited about the prospects for Old Forester. So now Woodford. Woodford Reserve is a brand that I'm sure you all have seen by now. It is one of the hottest brands in the entire industry. It is something we are all very proud of and the company is really rallying behind it and excited to see the type of growth that we're seeing. I'm going to show you a short commercial here. Just take a little break and then we can talk a little bit more about where this brand is going. When I see people drinking bourbon, I know they're tight. They open their house during the holidays for those of us unable to return home. And when I ask them what I can bring as a sign of my gratitude, they'll reply only with yourself. We love your Woodford Way. Woodford Reserve is a brand as I said very passionate very inside of Brown Forman. You've got a lot of people that really love this brand. It has been growing rapidly in the last few years, but it took a while to get there. I think this is a brand building model that we have learned a lot from ourselves. We started actually building the distillery back in 1994. We sold the first case in 1997 and it takes a while. I mean, it takes a while to properly seed, get it in the proper way, particularly at these price points. It takes a while to get it into distribution and get consumers to really know it. It took a while to get to 50,000 cases, then 100, and then the base starts to get bigger. It snowballs a little bit. We get to 200,000. Last year, we crossed 300,000 cases and we're well on our way to 400,000 and above. So a lot of excitement, a lot of passion for this brand and at the price point that it sells at, it makes a great margin. So it's a terrific brand and something we really want to see growing and doing well going forward. So I'm going to show a little clip here, just take a little bit of a short break on something that ran on Saturday Night Live a couple of weeks ago. A few of you may have actually seen this. This is one of those things where as a brand builder and a brand company when these things happen, we're all high fiving in the back room getting excited about it. But it's been this has been a fantastic little video. Offer to have a glass of Kentucky Bourbon with future Senate Majority Leader, Mitch McConnell. This evening, that trip took place. Okay. Okay. Now we're having fun. Yes, Mrs. Hillary Clinton, Mrs. Publishers Clearing House, want you to know you've won an all expense paid trip to getting whooped in 2016, Red Popper. You know what? So I guess it's not getting done in the next 2 years. Not a damn thing. Well, you know what? That's great. But we can do this together. Live from New York, it's Saturday now. That thing, I've watched that thing 25 times now and I still laugh every time I see it. It's a long it's much longer than that. We obviously cut it down for this conference. But that type of PR one, it's great for the brand just in terms of the visibility that it gives. But it does show you a little bit about how when they had the chance to essentially pick any brand for the opening skit in Saturday Night Live, they chose Woodford. So once again, confident and feeling good about it and really looking forward to the growth of this brand over the next few years. The last slide. Just thought I'd lay out kind of our vision statement that we've been using with our own a lot of our own people to kind of kick off the rest of this day. So be the global leader in American whiskey, led by our Jack Daniel's trademark, accelerating our existing portfolio growth around the world and entering other attractive whiskey categories where we don't participate today. So we want to lead the global growth of American whiskey and we have every intention of doing that. We focus first on our organic growth opportunities really led by the Jack Daniel's trademark. We know that is driving the boat these days, and we will continue to focus on that organic black label really growth to start with, but then quickly followed by innovation. We're working hard at innovation as a lot of others are too, but we've got obviously Jack Daniel's Honey and Fire and others that you can hear about today, but the full portfolio of whiskey brands all are looking at a lot of different innovative products and we're pretty confident we can be successful there. The 3rd bucket would just be acquisitions. We've been public about our interest in other whiskey categories around the world. We still are interested in it. Jane is going to talk a little bit more about it later on today. But just know that we are looking to continue to grow in attractive business models and we think whiskey in general is an attractive business model. So excited about it. Looking forward to the rest of this day. I hope you all get a really good feeling of what we're trying to do in the whiskey With that, I'll have John Hayes come up and It's really hard to grow up without being impressed by Jack Daniels. If asked what's the secret of Jack Daniel's success almost everybody would answer it's in the bottom. It's the product. It is real. There's nothing phony about it. You know what you see is what you're going to get. That's it. You're dealing with real life in Lynchburg. It is a real distillery and there was a real man named Jack Daniels. And there is a cave spring and all the water comes out of that and you can see that fermenters and everything. It's a little small town. When you look at some of those guys who were involved in the very early days of Jack Daniels, their personalities is kind of what became the personality of the Jack Daniels brand. Jack Daniel's has become this great global icon. And we don't know that it would have been without Brown Forman. Jack Daniels has always been a special place. I think the important thing that we do in Louisville is appreciate Jack Daniels and don't try to change it. Ladies and gentlemen, John Hayes, Senior Vice President, Managing Director, Jack Daniels. Always a pleasure to be here and start after something like that representing this great brand Jack Daniels. Where did there he is, sorry. So today, I'm just going to go through a little bit on setting up front where we've been. Of course, a little bit about where we're at today. But more so for you, I want to leave you with why is this brand so successful, so I can accomplish that. We'll be good today. The first thing just in numbers, so you go back to 1956 when Brown Forman acquired Jack Daniel's from the Motlow family. And back then, it was about 200,000 cases sold in just a handful of states, most of the United in the Southern United States. You fast forward all these years later, in 2015, it is now about 14,000,000 case brand if you include our RTDs on equivalent cases and sold in over 170 countries around the world. You can see our growth rates, which have been very nice and consistent over this period of time. Taking it back into the last 10 years now, our net sales growth for the family has grown a little over 2.5 times at a 10% CAGR. So that same growth rate you saw again accelerating a little bit, whereas our volume has more than doubled with a CAGR of about 8% right now. You see we've got a nice blend of volume and then pricing over the last 10 years. You can see our famous Whole 7 brand growing at 5%, our RTD business about 12%, Gentleman Jack 14% and Single Barrel 9%. And then one that didn't exist until about 4 years ago, which has been one of our great success stories of Jack Daniel's Tennessee Honey, which is now over 1,200,000 cases and I'll talk more about that a little bit later on. This gets into a bit of what Paul was talking about of our diversification. So Jack Daniel's old number 7 as I said delivered this 5% volume CAGR where the rest of the portfolio has grown volume nearly 4 times faster. And you can see that in that our diversification within here has gone from being predominantly about 94%, Tennessee Whiskey back in 2,004. We've had a nice expansion of the rest of the portfolio where although Tennessee Whiskey, of course, as I said growing at 5%, the concentration is now down to 83% here this year on volume. You take that into our geographic diversification. So, the world's biggest market, our home market over the last 10 years, the United States has grown volume at a 3% CAGR, which again during that time and the great recession that we had within here, it would have been more than what the spirits category had been as well as this of course is not taking into account the pricing that we had going on throughout that time. While of course our international markets have been a tremendous success for us have grown 4 times faster with a 12% CAGR. So you can see back in 2,004, the United States represented 54% of our business. The bulk of the business outside of the United States is what we refer to as the other developed markets, which are essentially our Western European markets, Australia, New Zealand and Japan and our global travel retail businesses, what would be in that bucket. And what we're describing as emerging markets is essentially everything else. So you can see in 2,004, we just had 7% of our business in the emerging market world and now that's up to 18% with still plenty of long runway to go for us. And as a competitive environment, you can see back in 1985 going back, these are by volume the top 10 brands of family of brands back in 1985. We can see Bacardi rum at that time was the largest selling spirit brand in the world at 17,500,000 cases. So Jack Daniel is number 9 at just below 4,000,000 cases. So you go to 2013, which is the latest numbers, 5 of those brands in 1985 are gone not gone, but they've fallen off of the top 10. Jack Daniel's has risen to number 4 behind Smirnoff, Johnnie Walker and Bacardi. Remember these are their full family of brands. And for us this includes our full strength spirit brands does not include our ready to drink business. And on retail on retail value sales, the 3rd largest family of brands brand in the world, closing in on number 2 quite rapidly. So that sets the stage. Why? Why is this happening? So first, as my friend Ted Simmons said, in the video, for us, it's in the bottle. This is a brand of whiskey that is a unique, very well made crafted whiskey in Lynchburg, Tennessee. So you've got to deliver the product. But more importantly as well, the brand has a very powerful equity that I'll talk about that is translating extremely well all around the world. Of course, it is global. It's the largest premium plus whiskey brand in the world. And as we have found, it is very extendable. When we sort of wrap this up, we talk about in terms of what if you're a fan of ours, why do I drink it? Of that we put down into just purely accessibility. The first within the brand is around the world, can I find it? And right now, I'd challenge that with I think we may be, if not 1, number 2 in any bar around the world, you most likely are going to find a bottle of Jack Daniel's. And so we are very we're there. If you want to have it, we're there. And we are a lot of that as well is now through our route to market and just all the great work that we've done out in the market. The second thing you might ask is, is it affordable? Well, yes, it is a premium priced brand, but Jack Daniel's is still within reach for many consumers around the world, whether it's in the pricing that we have, feature pricing that we may do in small sizes. For example, in Africa right now, we're doing tremendous business in our half bottle sizes where they may not be able to afford the full bottle as well as in our RTD business where you can buy an individual serving or of course a drink in a bar, we found that Jack Daniel's can be very affordable in a premium way for people around the world. Then of course is, do I can I drink it? And for some, we talked about Lawson talked about is, for some, it's they love the taste on the rocks or with water like many of us do, but for many that still can be a challenge. So we found the brand through mixability, in particular with Coca Cola, Jack and Coke around the world has been a tremendous force for us in the can I drink it category as well as our ready to drink business? And now more recently within our flavored whiskey business is just allowing people to that may not like the taste of full strength whiskey are finding new ways to drink the product. And then lastly is, do I like it? And that's where I probably spend more time on is, people love this brand and they take it personally within the brand. And we believe it's more within this equity. It's a very real brand. They can call it by name. The name Jack translates very well around the world and makes a personality for it. And quite honestly has become almost a friend for many people around the world. So with that, I want to move into just show a little bit of video of how this comes to life through popular culture in the United States and then export it around the rest of the world. What is your one go to item on the play? Probably Jack Daniels. We'd love to send you an entire barrel of Jack Daniels Tennessee Whiskey to offer Mr. Clooney. Thanks, Jill Meyer at Jack Daniels. So happy birthday to your dad. Yeah. Just a couple of days ago. Yeah. He's a 9 years old. I gave him a case of Jack Daniel. It's things like that that make me glad there's Jack Daniels in this cup. I'm going to tell, ladies Ladies and gentlemen, your next state senator. And a shot of Jack's Jack and Ginger then. This is not mine. This is that's caramel coloring. What's your Christmas? What's your Christmas? What's under the tree? Oh, it's an empty bottle of Jack Daniels. You could say Eric You could say Eric Church hit Nashville like a shot of Jack Daniels. When some rules were put out there, I I broke them. I heard you didn't know about our shot glasses, so that's my gift to you is our shot glasses. Well, thank you. I know, Angie, what am I supposed to do with that? Was never a spokesperson for the company. He was never hired to do endorsements. That was just his favorite drink. That's the mix of the gods, baby. From Lynchburg, Tennessee, that comes from. Irish whiskey or Scotch whiskey? I like Jack Daniels. The story of Jack Daniels is the story of America. So those are the famous people and they adopt the brand either personally or visually through their movies because of what that brand says about them. And this then translates into people all around the world. And almost like we have this secret weapon right now of 1,000,000 almost like we have this secret weapon right now of millions of Jack Daniel's fans around the world who have adopted the brand and have become somewhat almost salespeople for us in telling the story about the brand. To them, Jack Daniel's is more than a whiskey. It's an attitude. It's an emotion and it's a connection. There's a desire in this world to find substance and in a world of passing fancy and reality TV. They're looking for something real and Jack Daniels gives them that realness, because Jack is real. Everything you've seen on some of these videos here, it's still this uncompromising spirit of every day we make it, we're making it the best we can. So for our friends, Jack is consistency in a world of change. And it's interesting because they're sorry, I've got this. They're bonded by Jack, put some of these up here. These are some things we've grabbed off of Twitter and Facebook here, just from the recent few days now. So they're bonded by Jack, even though they'll probably never meet the people that they're communicating with. So for them, Jack Daniels is a proud badge that essentially begins to define who they are as well. So we really are taking these fans and moving them to be just more than just drinkers of Jack Daniel's. They become what we call loyal advocates of Jack Daniel's. And you can see it on this digital world. We've got over 15,000,000 fans on Facebook that we communicate with quite often. We've got millions of people on our internal database. It's interesting, our digital people will track daily. They can track that there's more than 8,500 conversations happening around the world of people talking about Jack Daniels. If you go on to Instagram, there today something in the neighborhood of 1,000,000 photographs that people not us have taken about Jack Daniel's around the world. So it's this I don't think there's very few brands around the world that would have this sort of a connection with their consumers. And I think that's one of the big reasons for the success that we have. So going forward, our key strategies and I'll touch on these briefly, but of course for me I get asked Paul to say just don't screw it up would be one thing. But doing what we've been doing all these years of continuing to reinforce this unique specialness of Jack Daniel's is what we intend to continue to do. We also are being very thoughtful and disciplined on balancing the value and the volume growth of Jack Daniel's and a lot of this has to do with our pricing and our pricing power and I'll touch on that. Something is around our portfolio innovation being very thoughtful within that and I'll talk about that and of course geographic expansion. And lastly, I won't get into today's strategic investment, but of course, behind the brand itself, our people, which and others and then Alex, of course, will talk about a lot of the capital investment that's going on at Jack Daniel's. But first on reinforcing the specialness. For many of you might recognize on the left is a famous black and white photography advertising we've been running since the 1950s in many places around the world, still do in the U. K. Today. That's a picture of an ad last month in the London Underground. And we continue where it makes sense to use that great story and that great advertising. But realizing of course the world is ever changing, this on the right is an ad from China that we've now launched with our Jack Daniel's number 27 Gold along this master year craft. So of course, a very different look, still saying the same thing about the brand, but we're being much more, I'd call it open and aware to making sure we're relevant to consumers around the world. And that means you can't be the same in its message content and form that you may be in the United States or the U. K. If you're talking to somebody in China or in India. So two examples of that are, I'll show one commercial here, which is running right now for Christmas time. It's our 4th year of running it and we run it in many countries around the world and it gets great emotional connection around the world around Christmas time. So a great story. It tells a story in Lynchburg of how we make our whiskey and marry that with an emotional truth about the times of the holidays and it's been very effective for us around the world. Now an example that I'll show next is, we had struggled in South Africa. We had a great run-in South Africa for many years, but about 6 years ago, we declined quite rapidly and did a lot of work on why. And frankly, they appreciated all the story that we had. We'd shown them, which is similar to those the black and white ads or these ads, but they it wasn't really connecting as relevant as it needed to. But they still love what Jack Daniel stood for. So for a lot of through an insight of just finding out for young South African men and women in the new age of South Africa, it was about that people knew who you were and they knew your story. So that was an insight. So we said, well, let's spin our story. And instead of us telling you our story, allowing the consumers to tell our story. So this is that example. After establishing what would become America's oldest registered distillery, Jack Daniel became Famous, he went from humble Tennessee bars to the dressing tables of the biggest names in the business. Even Frank Sinatra was buried with the square bottom. As I said, round bottles are easier to make. Jack said, we are not like everyone else. We make old numbers. 7 might have been his lucky number, but lack and nothing to do with it. He did things his way, the best way he knew how. What's your story? Make it worth telling. So a different look, still telling the same story and we're pleased to say that our business since we launched this about 6 months ago, we've seen a dramatic turnaround in our business in South Africa. So that's showing an example of that we're being very open to connecting our message in different ways around the world. The second area we talked about was the volume and value and the pricing power of Jack Daniel's. And you've heard Paul probably talk about in the past what we call rarefied air. I wanted to show this is a little different take on demonstrating the numbers you'll see here are brands that sell at least 1,000,000 cases and have at least an average global retail price as defined by IWSR of $25 a bottle. And you'll see that there's only 18 brands that make that list right now. And we were great to see that number 18 our own Jack Daniel's Tennessee Honey made the list this year. So you can see many names, great names 7 through 18. Then you jump up to there's between the 3,000,000 case mark and the 4,000,000 case mark, it jumps up so there's that takes you up to there's only 2 left. There's only 2 brands left that sell more than 1,000,000 cases at more than $25 a bottle. And of course, a brand that we all admire and the largest trademark in the world for whiskey, Johnnie Walker Black Label being their largest singular brand at that price point at 6,000,000 cases selling at $38 a bottle. But then there is Jack Daniel's old No. 7, which is now selling about 11,500,000 cases, so twice more about twice that size at $27 a bottle. So again, what we believe to be rarefied air, large volume, high price, nice margins, have allowed us to create this great brand with great reinvestment behind it and with tremendous pricing power. Moving on to our portfolio expansion. For some, I think we've expanded a lot and I want to sort of illustrate here. We've been very thoughtful over the years. So up until 1986, there was essentially one brand Jack Daniel's Old No. 7 Black Label Tennessee Whiskey. In 1987, we introduced Gentleman Jack. Couple of years later, we got into the RTD business here in the United States with our Jack Daniel's Country Cocktails. About 4 years, 3 years later, recognizing the size of in particular the Australian RTD market, we created Jack Daniel's and Cola in a can that was launched in Australia. Then we took off about 5 years before we came back with in 1997 Jack Daniel's single barrel was introduced. Then we went a long time. So we went all the way from 19 90 97 to 2012 without really any innovation other than some flavor expansion in our RTD business and of course introduced Jack Daniel's Tennessee Honey in 2012, which we followed that this year with a limited introduction of Jack Daniel's No. 27 Gold, which I'll talk about, and then just now beginning to put out Jack Daniel's Tennessee Fire. So you can see, I would there's sort of a nice blend that's not happening all at once and we've been pretty careful as we move forward on this as you can expect. Just touching on all of them then. So Gentleman Jack is was the first one there. Our double mellowed Tennessee Whiskey that we talk about. It's for occasions when people are looking to step up to a more premium whiskey than Jack Daniel's Black Label. Had very nice volume growth since the launch. It was really only sold in the United States until about 5 years ago and we've put an effort out into the United States and just in that 5 year time then, so nearly 40% of the volume is now sold outside of the United States. Our key markets, of course, the United States, but seeing great growth in UK, Australia, France, Germany and global travel retail in particular. And we believe that there is tremendous upside for this brand that sells for about 35% premium to Old Number 7. The other gentlemen would like to remind you that Gentleman Jack Tennessee Whiskey gets its exceptional smoothness from a mellowing process it but twice. Gentleman Jack Double Melo Tennessee Whiskey, the order of gentlemen. That's a TV ad we just put on in the United States here in the last couple of months and we've seen that the brand responds very favorably to TV advertising. Jack Daniel's single barrel, again, very nice growth since it was launched. This one is 2 thirds of the volume particularly well in particular, Michelle's market there in France, very good market, but travel retail France, Germany, the United Kingdom and again doing quite well in other markets around the world. Our ready to serve business, we don't talk a lot about because it's not really a big factor for us here in this country, but it's a big piece of business for us outside of the United States. In particular in Australia, where it is bigger in terms of volume and value than the parent brand Old No. 7. And then we're doing very nice business in Germany, Mexico, the UK, South Africa and China is another one that's flourishing for us right now that we're very excited about. You can see on the right too, actually began to innovate into RTD space. We have a Gentleman Jack and Cola. This is a super premium version that's sold in Australia. And then just last month in the U. K, we launched Jack Daniel's Tennessee Honey and Lemonade in a single serve format. And then on the left, you'll see our Jack Daniel's Winter Jack, which is a seasonal offering only sold around the Christmas time period, including here in the United States that we've gotten some very good consumer acceptance on this product as well. So this is an area we're going to continue to explore and innovate into this whole ready to serve space around the world. And then of course, Jack Daniel's Tennessee Honey. Now entering our 4th year in the United States, as you can see and it's still growing strongly. In our earnings call last week, I believe we said that it's still growing at about 39% growth right now around the world. We're seeing tremendous success. In particular, I would call out the United Kingdom, where it has become if you considered it at imported whiskey, it is the number 2 imported whiskey in the U. K. Right now after Jack Daniel's Black Label. Doing particularly well in France and Belgium, the Czech Republic, Mexico, Brazil, Japan, South Africa and Canada and continuing to grow at double digit growth rates here in the United States. So it's been an eye opener for us. You've heard people talk about it. It's really doing a great job of attracting new consumers to the Jack Daniel's franchise who may not, as I described earlier, like full strength whiskey, but really like the taste of this. So in particular, we're seeing this brand over index against females, African Americans and young adults. So here is the latest ad that we've been running in the United States. Right. And then finally, we've launched introduced 2 new brands in limited distribution in the last year. The first I talked about and some of you may not even be aware of it is a brand that we call Jack Daniel's No. 27 Gold. Why is it called No. 27? Well, it's 2 times 7. It's 2 times double mellowed and it's 2 times double barreled. So like Gentleman Jaffe put it through the mellowing before and after barreling. Unlike anything else, we've transferred it to a new maple wood barrel that we're making ourselves now in our new Georgia cooperage and gives it a very nice interesting taste profile that we developed it particularly for the Asian market after a lot of research on taste profiles and things that were on it, although we do think it has great potential around the world. So it's selling for about $85 to $95 a bottle. We launched it first in Singapore and Hong Kong Airport last year. It's now expanding to all key international airports and entering a few U. S. Airports this month. We launched it in just the Shanghai metro area in May 2014. Unfortunately, as many of you know with the situation in China right now, probably not the greatest time to be launching a high priced super premium brand, but we're getting some nice acceptance for us and we'll be patient for it. And then the plan is next year we'll begin to expand to a few major urban metropolitan cities throughout the world, probably including New York. Within this one, we've got to be a little cautious because of the interesting supply component, especially with the maple barrel wood. It's challenging from a supply standpoint and not something that we could be putting out in these early days with great volume. But we're getting really strong acceptance for it in the markets and particularly travel retail we've launched so far. And of course, many of you probably have heard about Jack Daniel's Tennessee Fire, which is our cinnamon flavored Jack Daniel's product. We launched it last April in 3 states Oregon, Pennsylvania and Tennessee. Since the launch, Jack Daniel Fires depletions have indexed. So if you go for the first, I think it's probably 8 months when Tennessee Honey was launched 4 years ago, but the 1st 8 months or so when Jack Daniel's Tennessee Fire was launched, we're seeing that Tennessee Fire is selling at a 35% greater cliff than what Tennessee Honey did when it was launched during that same period of time, which is of course really exciting for us. We're getting tremendous we've been very careful on this one, because we want we truly want to learn the impact not only on the equity of Jack Daniel's as a trademark, what's the cannibalization impact on, in particular Tennessee Honey? Are consumers willing to pay for a premium price flavored cinnamon whiskey offering when the category leader is significantly less than we are? And finally, do they just like the taste of it? And we're getting great things. First of all, people love the taste of it. And I think we have it here for you to taste today when we finish here. They love the taste. We're seeing that because it's a high quality product from Jack Daniel's, they really appreciate that. It is premium. It's very authentic again coming from Jack Daniel's. And we believe that just the masculinity of what Jack Daniel's brings to bear on this product is something that consumers are really going to well, they are enjoying it. Because with those 3 states, we were encouraged enough to go to 5 more. So we went to 5 more states, Texas, Illinois, Michigan, South Carolina, Georgia, just in one gamble, Illinois. I think I said Illinois. Oh, yes, there's 5 of them. So and that's just been about since October. So it's very early days other than the trade acceptance, the initial consumer acceptance is fantastic in those 5 states, which has given us confidence that Paul announced last week that we will be rolling out Jack Daniel's Tennessee Fire into the United States in totality in the Q4 this year. We're also exploring international. We haven't we're just more in the sort of background of doing some consumer research and seeing the viability for it overseas, but to see if it can do what Jack Daniel's Tennessee Honeyforce. So really excited about this new product from Jack Daniel's Tennessee Fire. So wrapping it up, we talked about everything. I'm just moving now to the geographic expansion, which I still think is with all said and done with the portfolio innovations nice, but we are just scratching the surface. And I just want to illustrate that for you. Starting with a brand that you all know, the Johnnie Walker trademark, which again admire very much and with the world's number one spirit brand. So if you look at their trademark in the developed market worlds back to 1985, so again those United States, Western Europe, Australia, New Zealand, Japan and GTR. You can see they were about 5,000,000 cases for their trademark and pretty much have been flat within that area for this 28 years that's been going on. So you compare that to Jack Daniel's, about this they were a little bigger, but we were about the same size as they were back in 1985. But you can see whereas they've had that 1% CAGR, we've really gone and built the brand during that time, not only of course continuing in the United States, but very focused on the developed markets around the world. And you can see that we are if United States developed market world much larger than Johnnie Walker is in that world. Where Johnnie Walker has done a phenomenal job there it is. Okay. You can see here. This is where they've really they've done a phenomenal job. So you see in the emerging market world, is where they really have added tremendous amount of volume and you can see their 9% CAGR over that world. And not that we don't have anything that we're not proud of on this thing, but we were very focused on that developing market world during that time before we got into the emerging market. We had nice growth, 20% growth over that period of time, but you can see much larger in its volume base. So you put all that together, Johnnie Walker's the percent of Johnnie Walker's total volume today is 66% of their volumes in the emerging market world. Jack Daniel's is 18%. We're not apologizing at all because the good news of this is we got a whole lot to go after still here on this one. So that's sort of where I'll leave you with on that one is that chart to me when you look at as well and I closed this a couple of years ago with you all is even as big as have we gotten still remaining special. We still only have less than a 2% share of the total distilled spirits with market in the world. We have about a 3% share of the total whiskey market in the world. We have about a 9% share of the standard Thank you very much. I will now turn it over to Tom. Thank you. Thank you. Thank you. Thank you very much. I will now turn it over. Are we running a video? We're running a video. Thank you. The long game is so important the bourbon industry. Not only do we have oak trees that are on average 85 years of maturity to make a barrel from, We mash, ferment, distill and then mature for years in those barrels before the product can come to market. So we've got a number of years just in our planning cycle of making the product for consumers. It takes years for a volatile Forrester to get to your table. You've got to go through all that kiln drying, you've got to buy grain, you've got to build warehouses, you've got to have the steel mashtubs, fermenters, all of that. I think that is a lot of money tied up for a long period of time. You better know at the end of that time that you've got a brand that is healthy to put all that whiskey into to sell. You've got to be. Think about the whole picture. I mean, we were turning corn into liquid gold into bourbon. So I think that stewardship of the land, of our resources, the reselling of barrels, the use of grain again to feed local cattle as we do today, making sure our watershed retains its purity was just something you did because if you didn't, you would damage your business, you would damage your livelihood. We're producers. We're not takers. What I like about that approach to Ladies and gentlemen, Alex Alvarez, Senior Vice President, Global Production Officer. Good afternoon, everyone. Thanks for being here. As John mentioned and as you saw in the video, we're proud of what we do and we make Jack Daniel's. And every day we make it, we make it the best we can. And I'm here to talk about global production. I'm here to talk about how we are investing in whiskey. We've been investing in whiskey for a very long time for over 140 years. Now Chris Morris in the video summed it up really well. Our supply chain, he says, is the long game. So we're here for the long term. And if you think about our business and one of the great things about our business, it's also how much it takes for us to be in the business, meaning it requires significant inventory, significant capital. It requires a long time for that product to get to the shelf. Now that gives us pricing power, so it gives us an advantage. It also puts some structure in the market as long as we are able to manage it well. But it also means that in the whiskey business, you got to be good in order for you to be successful. So it's really tough to be successful. And could you take the sorry. So as I said, we've been investing in whiskey for a long time. Paul and Lawson talked about the whiskey business and specifically the North American whiskey and why it's growing. But there's a piece of that business that gets forgotten and it has to do with planning and maturation. So if you think about our American whiskey, the fact that we mature it somewhere between 4 to 7 years and that window is in the perfect spot from a production planning standpoint in order for us to be able to leverage our production and our assets. So if you compare our business versus for example the vodka business, right? So I can have vodka tomorrow. So and that's the problem with the category. So there is very easy for you to enter that category. And then if you think about it in terms of our scotch competitors, they're boxed in decades, multiple decades before they have products in the market. So for us, there's a very, very important advantage against our such competitors because we have flexibility that window, that planning horizon is very important and also against our vodka competitors because there are significant barriers to entry into our business. Now and that's why we're investing. So as we think about investment, we think about it in 2 pronged approach. We think of it in terms of growth and capacity. So what we have to build the infrastructure for us to have the right stuff ready for the markets of the future, right? But we also think of it in terms of investing in our facilities, in our operations, the efficiency and capability that we build, especially based in our single site advantage. So if you look at our business model and our operations model, it's very different for example from Big Beer, right? They have plants all over the world and they distribute all over the world also, but they are spread across many areas. For us, Jack Daniel's as well as our other whiskeys are produced in one place. And Lynchburg, they've always been producing Lynchburg for Jack Daniel's and it always will continue to be produced in Lynchburg. And that gives us a great advantage, gives us control over our quality, gives us control of our consistency so that our consumers across the world get what they expect. But in addition to that, it allows us to run a very lean operation, very lean and mean operation where we make it really good every day and also gives us great capacity utilization, which is very hard to get in the alcohol beverage business. Now when you take those efficiencies and you add the premiumness that John and Lawson talked about, that gives us excellent margins. So we think at the Brown Forman, we think of our production as a competitive advantage. Our capabilities that we're building are something that makes us better and leads and helps us lead in our category. So I already talked about the barriers to entry, right? So it requires significant capital, it requires working capital, it requires time and that makes it difficult to enter. It also I also talked about single site production and the scale efficiencies that come with that. But for Brown Forman, we have a third factor that we also believe is important and that's our vertical integration. So we view our supply chain and our total integration as something very important. We are the only whiskey manufacturers that are vertically integrated from new barrel production all the way through our home places. And that to us is key and that helps drive efficient investment through our supply chain as well as I think Paul showed it very, very nice return on invested capital. So let me talk to you a little bit about our cost structure. So if you think about the bottle of Jack Daniel's and what makes our cost. So it's about grain, it's about barrels, it's about glass. But that's not different than other North American whiskeys and other whiskeys in general. What's important here is this maturation. So as I said, it requires a long time in order for us to have the whiskey ready for the consumers, years ahead of time. So that means that we have to invest about 25% of our current assets are barrel of whiskey. That's a lot. And if you think about our balance sheet, the biggest item of a balance sheet excluding intangibles is our inventory. So this is and will continue to be a significant barrier for new entrants into the market and for even people that are in the market to be able to successfully run the business. Now what this also means is that we got to plan well. Now we believe that planning for us is a competitive advantage. We do it well. It's a strength. Now why do we say that? Well, we do it. We believe that because it is a for us for brown form and it's a very disciplined approach where we vet the volumes, where we're looking at the trends, where we do it on a consistent basis, where we have a discussion between global production as well as our regional and our brand leaders to figure out what is the current trends and what is the future trends. And we also think that we've been doing it for 140 years. So we kind of know how to do it. So the combination of those factors makes it a strength. Now that planning horizon, as I mentioned, is also strength in terms of our competition. So our planning window is shorter, so that gives us levers and that gives us flexibility that at the scotch side they don't have because or it becomes much more difficult for them to do because their planning horizon is twice as big as ours. But that also talks about a little challenge that we have, which is still that window, right? I got a plan today with you guys are going to drink 7 years from now. So we got to put some levers in place in order for us to ensure that we bring some stability to something that could be that we can make it a little wrong in the future. So we have some levers to that. So what we do is we think of inventory and think of cushion. So we plan our inventory and we plan a cushion of whiskey of Jack Daniel's in order for us to be able to deal with unexpected demand. The other thing that we do is we have a single desolate. We have a single liquid and I'll talk a little more about that later on. But that also helps us balance between all of our brands and all of our presentations in order for us to balance demand. And then the last one is our maturation management. We are able to manage our maturation within the whiskey standards in order for us to ensure that we have enough whiskey to deal with unexpected demand. Now as you saw in that bottle, you have grain, you have glass, you have barrels and all of it not only because the way that we market our brands, but also because the amount that we use makes it key for us to leverage our single site approach. So we have a concentrated material supply. We bring our grass from Ohio. We bring our barrels from Alabama and from Kentucky. And our corn comes for about 150 mile radius from Lynchburg. And that allows us to have pricing advantages because of transportation, but more importantly scale advantages that again are very difficult to get in this business. In addition to that single point production, I talked about quality. Quality is important. We our consumers expect that quality and they pay a premium for it. So for us to maintain that quality in a single production site is more important. But it also gives us capacity utilization. So the Dac Danni facility is a pretty big place and we're able to produce those 14,000,000 cases and have excellent utilization of our assets. So then we bring all the stuff, bring it to Lynchburg, the corn, the barrels and we make Jack Daniel's, old number 7 desolate. And here's another significant advantage. So we use it for every single one of our Jack Daniel's products. We may age it a little less for our RTDs. We may filter it a second time or mellow it a second time for Gentleman Jack. We select special barrels for our single barrel. We use it very efficiently in our flavored whiskey or liqueurs. But at the end it's the same one single desolate. If you compare that versus our competitors in the Dutch industry, you're talking about a blend of anywhere between 15 to 30 or more different juices to make one product. So that gives us tremendous flexibility versus our competitors. So what does that mean? So when you put that efficiency of single scale or sorry, single site production, the scale that comes with it, our integration vertical integration then that means that our cost of sales are better. And I'm using here the PPI, which is the producer price index to reflect how although we've been growing, it's going up, it's going up significantly lower or below that of the industry standards. So now let me talk a little bit about vertical integration, right? So we think of vertical integration from the barrel and really from the state that make the barrel all the way through our home places. American Whiskey is our business. Now Jack Daniel's is our leading brand. But we don't only think of Jack Daniel's. We think of Jack Daniel's. We think of Woodford Reserve. We think of Old Forester and really all of our other products. And when we think of it, we think of it in terms of 4 factors or 4 stages, right? We look at it in terms of cooperage and how do we vertically integrate for all of our products from a cooperage standpoint, how do we distill, how do we warehouse and how do we homeplace. And that is very important in order for us to drive efficient investment. So we got to invest capital. We've had a very efficient way of running our business. We've been investing about 2% to 3% of our sales in capital. But our business is growing. It's growing really fast like you saw from Lawson and John. And that means we have to invest to support the infrastructure. But that also means we have to invest today for something that I'm going to sell 7 years from now. So in order for me to do that, I got to make sure I'm efficient and I have a criteria that I use for us to be successful at investment. So we want to invest in a manner that has flexibility for the future. What that means is, I want to invest today what I the least amount of capital that I need to invest in order for me to produce what I think I'm going to need in the future, but then I'm going to invest in a manner that I can build more or change that investment so that I could accommodate demand changes in the future. I also want to invest efficiently. For Brown Forman, investing efficiently in production means you want to invest so that your future cost of sales is lower than it is today and so that you take even more advantage and leverage your single production site. So that's what efficient investment means for us. And then the last one is we want to invest in a manner that enables innovation. So we're always looking forward for the next gold like John talked about. So how do we build our systems and how would we build flexibility so that we can innovate in the future and how do we leverage that innovation across our vertical integration. Now from our fiscal 2013 through 2017, there's going to be or there has been and there will be significant investments, because we have to support that growth. And you'll see some examples of what that means. But for us, it is the right growth or it's the right investment to support the right growth. And we will get back to our 2% to 3% investment in the future. Let me just show you a little bit about why we vertically integrate. Welcome to the Brown Forman Cooperage, the longest operating barrel making shop still turning out barrels today. Formerly the Bluegrass Cooperage, we changed our name in 2,009 to the company that continues the rich tradition of handcrafting barrels. Why is Brown Forman the only spirits company that still owns its own cooperage? It's because we know a barrel is more than a container for whiskey. It's really an ingredient. All of the whiskey's color and a good part of its flavor are drawn from the barrel. That's why we go to the extra effort to make our own crafted from American white oak. The rough staves are cut from the trunk and left to season in the open air. The simple seasoning of the wood prepares the oak to contribute to the character of the whiskey. Next, the staves are carefully planed, cupped on one side and the joints cut at a slight angle. A mistake here and the barrel will leak, giving the Angels more than their fair share. Now the staves go to the razor. Yes, barrels are raised, not built. No glue, no nails, nothing that might taint the whiskey. The Cooper fits together by hand staves of different widths like puzzle pieces, 33 staves to the barrel. A seasoned barrel maker will raise 250 barrels a day. Now it's time for toasting, the crucial step to crafting a barrel that will impart the greatest flavor. Toasting releases much of the flavor lock inside the wood, such as whiskey's distinctive vanilla accent. Our barrel is now ready for the roar of the char tunnel's flame. As it passes through the fire, the natural sugar in the wood caramelizes, more flavor for the whiskey to draw from. Finally, a craftsman prepares the barrel for its head. The hoops are put on, the bunghole drilled, the barrel tested for leaks, and inspected under a Cooper's watchful eye. At long last, the barrel is ready to receive its whiskey. It will go in clear with a hint of flavor, but emerge mature with a rich amber color and a warm robust taste. So hopefully the video helps you understand a little bit the importance of the barrel. So for us being vertically integrated, owning our own cooperage and manufacturing our barrels is a significant competitive advantage and we're the only ones that do it. And so if you think about it, I'm going to sum it up very quickly, why do we think it's important? One, it cures our quality of supply. So as Davido said, 100% of our color and a lot of our flavor comes from the barrel. So ensuring that we have the right quality in order for us to produce the end product, the right whiskey is very, very important, but also ensuring that we have supply security. So if you think about it, we're building new warehouses, we're building new distilleries, but if we don't build the wood infrastructure in order for us to produce barrels, we don't have a place to put Jack Daniels. So the fact that we own our cooperage and then we can build that infrastructure to support that growth is very, very important. It's also cost efficiency because of our scale, because of our technology, we can do it cheaper than other people. It's also wood innovation. So if you think about it, since we're the only whiskey company that does this, we are wood experts. So we own that expertise. And I don't know if you heard it in some of the presentations from John and from Lawson, there's examples of that. So Woodford Double Oaked, so there's a special barreling that we do for to get that flavor. The Jack Daniel's Gold with the maple barrel, there's a special thing that we do with the barrel. So innovation becomes an important part of what we do. In addition, it helps us with our test profile. So people like American whiskey because they like that rich wood vanilla flavor. We know how to get it and we know how to play with it in order for us to improve our products so that it belies the consumer at the end. And then it also helps us get into the used barrels market sale, so another source of income for us. So this year we're selling about 500,000 barrels out in the market. Now what that means for us is that we're going to continue to invest in the cooperage. So we invested in new Cooper's in Alabama $60,000,000 the first one that has been built in the industry in the past 65 years, used great technology to get us there. And with that, we've been able to increase our capacity by about 40%. So with this, we're going to be able to produce up to 1,000,000 barrels a year. But that's not the only place we're investing. So Jack Daniels, we're investing a lot in Jack Daniels and we've been investing in Jack Daniels for a long time. We're investing in new warehouses. We're building 2 to 3 of those a year. And not only are the warehouses more efficient in terms of labor, they're also more efficient in terms of how we manage maturation within them. We also expanded our distillery, the current distillery that was there since prohibition until we don't have any more room to expand. And so now we're going to have to build a new distillery and I'll talk to you a little bit about that one. But before that, the other thing that we're investing is in risk management. So one of the things that happens is when you have a single site that produces a brand like Jack Daniel's, we need to ensure that it's well protected. So we're also investing in a 10,000,000 gallon spring water cave tank in order for us to ensure that we can get pass the drought if it comes around. And we're also investing in our fire protection. We have the Jack Daniel Fire Department, literally a fully equipped fire department in case something were to happen in our warehouses. But what I have here in front of you is the new distillery. So first distillery built in Jack Daniel's in ProVision, it's a long term $100,000,000 investment. It's going to start up in April and hopefully you'll be invited at some point to come see the distillery and taste some of Jackaride off the still. And but the important thing is that using that criteria that I mentioned to you earlier, we're doing it in an efficient, but very, very appropriate way. It's modular, so we are building what we think we need now and then we can grow it as the brand continues to grow so that we don't over invest. And we also we have included significant flexibility from innovation so that we can innovate in the future. Now we are also investing in our other whiskeys. So about $60,000,000 to $70,000,000 in our other growing brands. You heard from Lawson about Woodford Reserve and how it's exponentially growing. So not only are we investing in our home place, so that we get enhanced visitor experience, we're also investing in the infrastructure to support that growth. We're building warehouses, reapplying the Jack Daniel's warehouse model. We are expanding our distillery and we're doubling the capacity of our bottling operations. And then the last one is for Old Forester. Again, the brand is growing again. We have full confidence in our Founders brand and we announced that we're going to build an urban distillery. So we're getting into the urban distillery business downtown Louisville. And this is not just a showplace. It's going to be a great a cool place as a visitor to go see. But the reality is that this is a function in distillery where we're going to business. It is the right thing for us to do. Our category through the efficiency that we bring and the barriers of entry is the right place for us to invest, Because the way that we run our production through single site approach, we get great scale efficiencies because of our vertical integration. We gain great advantage in our supply chain. And Brown Forman invests for the long term, the long run and that's what we're doing. And we believe that our efficient investment in PROS is also going to generate top tier ROICs like we've been doing in the past. With that, we're ready for a break. So you get a 15 minute break now and I don't know what time it is. So come back at 3. So thank you. Ladies and gentlemen, please take your seats. Think of all the brand performance business out in the world being an expression somehow of the kind of values that we hold dear. We have teams in Sao Paulo, Brazil, Moscow, Shanghai, Sydney, Prague, Hamburg, London, Paris, Barcelona, Milan, Cape Town, Amatitan. It's an amazing list. Brown Forman has made a tremendous effort to have employees who basically are happy with themselves. You can't beat that. If you spend your entire working life here and experience just the goodness and greatness of Brown Forman, which I have, I've had the good fortune of doing that. And then you have the knowledge that it will be around in 50 or 100 years. It means what you did that whole time is going to go on. Whenever you've got a family company, you know that there are generations behind this that there is a strategy and that they're in it for the long term. We haven't lasted 143 years because of just chance. We have lasted this long because of our values, our culture and our people. We're making solid decisions for the future and on behalf of certainly our shareholders and our employee base and our partners. You can't help but be excited. That was a nice video to start the for the second section here. We're going to do about another hour. And I thought I'd introduce this crew that's joined me up here before I exit the stage. And they're going to just basically take you through what we might call our talent and global capabilities and each do a little piece of it. And just from left to right here on the stage is Jill Jones, who heads up our what we call our North American RLR North American region and Latin American region for Brown Forman. Been working at Brown Forman. I always like to tell a little of the story. She headed production as recently as 2 years ago for the company. So you'll see a mixture of experiences across our folks. Michel Giro, who is here, he'll talk for a little bit about he is in the last year, it was about a year ago, a little less that we launched our French company, but has been for the company 17 years and leads the French business today. Amador de Quevalho, who a bunch of us knew before he joined Brown Form 4 years ago because he'd been in the industry with 4 or 5 different companies. Previous to joining Brown Form, we were pleased to be able to recruit him to lead our Brazilian business, and he'll talk about that. Mark McCallum, who most of you, if not all of you, will have seen previously in many of Ramformin's presentations today oversees the piece of the world that Jill does not, which is Mark is overseeing Europe, Africa and Asia as long as as well as our global travel retail, a very rapidly expanding part of our business. And then Kirsten Holly, who's been at Brown Forman. I always like to think about this. Kirsten is going to talk about our people. She is in our human resources leadership group. And I'll tell you the thing that's wonderful about Kirsten's experience is she once left human resources within Brown Forman to go work in our brand world. So had an exposure to the building of brands at the company for a few years before coming back to the HR function. So a mixture of people here. And I think Kirsten is going start. So I'll turn it over to her before we as we spend the next hour before we go to Q and A. Thanks. Kirsten? Thank you, Paul. So good afternoon. As Paul said, I have been with Brown Forman for 17 years and I lead the human resources team that is responsible for executing HR strategies in our regions, with our brands and in all of our functions. Today, I'm going to be talking to you about something that may not typically happen at an Investors Conference. You heard a lot from John and from Lawson and from Alex about our brand assets and about our production assets. I'm going to talk to you today about our human assets, the people that build Brown Forman's brands all over the world. So who are these folks? Well, we are 4,200 strong and we work and live in about 50 different countries. But despite this global presence, we're a pretty small company. If you were to look at a Diageo with 28,000 employees or Coca Cola, if you included bottlers, it's 700,000 people. If you look at Marriott, 330,000 people. At 4,200 strong, we're pretty small. But we actually believe that that is an enormous benefit, because with 4,200 people, we can be focused, we can be agile, we can have information flow faster through our system. And for me in HR, I can execute high touch talent strategies to really get to know the people who work in this particular company. As Paul said earlier, a lot of us have come from other places before we came to Brown Forman. And so when you ask people why is it that you joined this company, we usually get 3 pretty consistent reasons. People come to Brown Forman because they love this industry. It's just great to work in beverage alcohol. They also tell us that they come because of our portfolio of brands. John Hayes talked about how much people love Jack Daniel's. We're the same way at Brown Forman. Employees like me, like all of us feel a strong affiliation for the portfolio of brands in our business. The third reason people come is because we have a track record of stability and success. And this is the kind of organization that many people want to join. So a bit about our age. I'll go ahead and reveal that. We are mid career professionals at Brown Forman. The average age in the United States is 47 is 45 and in our international markets it's 37. And we like to believe and I hope all of you will agree when you think about how old you are that with age comes wisdom and in many cases as a proxy for experience. We also know that once people join Brown Forman, we are inclined to stay. And so if you look at our average tenure, it's 3 times that of the national average in the United States with 11 years average tenure. And in the other parts of the world, Latin America, Asia, Europe, they don't track tenure the way the U. S. Department of Labor does. So it's hard to do the comparisons. But with 5.5 average tenure, we can draw the same conclusions that when people come to Brown Forman, they want to be a part of it for the longer haul. We look at this age and tenure and we say this gives us a great deal of experience and depth of knowledge. So when it comes time to build a new cooperage, to launch a new brand or to simply make great whiskey, we have the people who have the know how to get these kinds of things done. Now we also recognize that with an average age of 4537, we have to attract younger workers too and we have talent strategies in place to do that. And we also have to make sure that when we have this depth of experience, we also have learning strategies in place to create threats, so that we don't become too deep and we maintain a broad perspective. About half of us work for Alix, who you heard from earlier. That's right, about half of our employees are part of our global production organization. And so these are people who work in our distilleries and in our manufacturing operations. The other half work in functions that you would expect to see in a brand building company, sales, marketing, finance and yes, even HR. If you look to who we've hired lately, you'll find that it is mostly hires from our international markets. That shouldn't be surprising to anybody in the room given our global expansion efforts. Our international markets have grown at an 11% CAGR and so we have invested in people accordingly. In our emerging markets, we're hiring more sales expertise, but in our developed markets, more sales support expertise. This is to support our RTC models, our brand building efforts. And if you look at who leads our markets, an interesting trend emerges. You'll find local experts, people like Amador, who happened to be born in Brazil and is running Brazil. You look at Michel, who is French and is running our French business. But if you look at the makeup of our expatriates, you will find that we have a Brazilian running our India business. We have a South Africa in South Africa, we have a German running that business. We have a Greek running our Russian business and a person who's born in Portugal running our Polish business. And so we are both local experts and global citizens who are building our brands. We also invest in our people through the kinds of things that you probably experience in your organizations: training, onboarding, venturing, because we recognize that people at Brown Forman have to learn faster than our company is growing and we make investments in them as well. And here are some numbers that we are particularly proud of, especially in HR where a lot of my time gets spent on these types of topics, but in Brown Forman in general. The other investment we make in our people comes through our culture. Talent alone is not sufficient to achieve our strategic ambitions. We actually have to have a place where people can contribute their best ideas and execute them. And so every few years, we invest with a company called Aon Hewitt, who measures something called engagement. Pretty basic. When your people show up at work, do they say nice things to each other and to others about working there? Do they have a strong desire to stay thereby reducing your cost of turnover? And do they give what's called discretionary effort? Meaning, when no one is looking, do they work harder than they have to? At Brown Forman, over the past several years that we have done this engagement study, we can report that in our business, our engagement scores put us in the global best employer ranks. And I hope that doesn't sound like the soft side of business, because there are correlations between high levels of engagement, which your company actually delivers. Engagement is an indicator of increased sales and it also correlates with above average returns for shareholders. So said another way, our investment in culture supports highly engaged employees who are creating sustainable value. So in summary, here are the three things I want you to know about the people who work at Brown Forman. First, there's the depth of experience. We understand this industry. We understand our company. And we understand the challenges and opportunities in both. The second thing about us is that the people who build our brands are a diverse mix of local experts and global citizens, who leverage their experience to build our brands across the world. And lastly, the people at Brown Forman are engaged. They produce more than is expected and they give more than what is required. And so this unique talent mix when you couple it with our geographic strategies, our portfolio strategies, our capital investment strategies, This is what enables our organization to not only achieve our yearly growth goals, but also our stated mission of building forever. So that's a little bit about the human assets of Brown Forman. And now I'm going to turn it over to Mark McCallum, who's going to talk further about building global capability. Thanks, Mark. Thank you, Kirsten. I just wanted to add my welcome to you all as well. We're going to spend the next sort of 50, 60 minutes continuing the story of the performance and potential of the company, but particularly through a lens that might be a little bit different for you and we'll give you some observations around how we've been doing it. So I'm going to sort of tee it up from a global point of view. I've just had 3 slides to just sort of base it on what's been happening particularly in the last 10 or so years as we've been globalizing. And then some of my teammates here are going to give you a better sense of it, an example of what's happening in one of our emerging markets with Brazil when Armador tells his story. And then Michel will tell you a little bit about what some folk thought of as a very developed Western European market, but how to us it looks more like a developing market. And then of course then Jill will bring it home with a discussion around that amazingly incredible U. S. Spirits market. So that's the next sort of 55 minutes. Let me, as I say, tee it up from an altitude of the total company. But the story of globalization of Brown Forman, we will look here at this last 10 years. This is a reported net sales representation 2004 to 2014 just showing the distribution of net sales in 2004 with the predominant amount of our business being generated here in the U. S. 64% and 36% being generated outside the U. S. When we embarked on this journey, particularly the modern history of Brown Forman over the last 10 years. It's moved as you can see. We've had around a 7% growth in our reported net sales over that 10 year period. And now we speak of our business differently. The U. S. Has continued to grow even though it has declined from 64% to 41% of our net sales. Over that period of time when brown formularyng at around 7%, the U. S. Has been growing at a compound rate around 3%. The yellow segment of the pie is our developed markets around the world. They've been growing nicely in that cluster of markets are the usual suspects Western Europe, Australia, Japan, Canada and others. But it's grown considerably to now represent 35% of the company's reported net sales in 2014. And then into that green section, our emerging market business growing very strongly for us growing ahead of course of the brown form and corporate average growing around 9% as we've gone over the last 10 years and represented by again the usual emerging market suspects of the BRIC plus Mexico plus Poland parts of Eastern Europe, Latin America and particularly Southeast Asia. The smaller piece in there the 4% section of the pie global travel retail actually also includes those barrels that Alex was speaking about that we're able to on sell. Principally though the global travel retail business is a wonderful channel for premium plus brands such as ours and fast growing double digit growth over the last 10 years in global travel retail and an important part of our business as we look to the future. So there's just what happened in terms of globalization of our business the way that we've been able to differentiate ourselves versus our competition. On the bottom of this slide is another way to think about it. You're looking here at a 20 year movement and the numbers represented are the number of countries in 'ninety four, 'four and 'four and 'fourteen where we sold more than 50,000 cases of product in most cases here principally Jack Daniels although a couple of recent additions to that. And then the number of markets around the world where we sell more than 100,000 cases and this progression from 6 markets back 20 years ago to 41 markets today where we sell more than 50,000 cases and then 24 markets today where we sell more than 100,000 cases is another way to think about the way we've been globalizing. Now some of us and I'm sure many of you some of us come from the fast moving consumer goods business and I suspect many of you follow many of the companies within that sector. I don't think many of us in fast moving consumer goods would be saying that a 50,000 case business represents something of note. This is a really amazing and a different business this brown form and premium spirits business in general. And what I'd like to say to you is that, we have found from a capabilities point of view that when we reach approximate sort of size such as 50,000 cases or more of a brand like Jack Daniel's commanding a shelf price north of $27 as John had showed a little earlier on average, We get the attention of the retail customers in that market generally speaking. And if you have 100,000 cases or more, we certainly get the attention of the retail customers within that market. John and Lawson talked a lot about how well we connect with our consumers around the world that this Jack Daniel's brand in particular has a certain magic to it. A little piece of America, We non Americans like to sort of think a little piece of America that most of the world actually loves. And so connecting with the consumers is something that the brand does on our behalf and we do on the brand's behalf. We do it really well. But connecting with the retail customers, it's a different story as I'm sure you know, it's business. And so anyway a long way around perhaps describing Brown Forman and the premium spirits industry as a sector is quite unique and we'd like you to observe and understand perhaps business is not necessarily seeking scale the same way fast moving consumer goods businesses require scale and diversification of manufacturing assets in order to keep cost of goods at a point where that scale can be leveraged efficiently for profit. So 41 markets already around the world. Arguably there's 197 countries in the world. If you Wikipedia it, it will give you plus or minus 2. 41 on its way to, well whatever with a brand like Jack Daniel's anything up to Wikipedia's 197 countries is a possibility for a company and a brand such as Jack Daniels. So there's a way to think about 10 years of purposeful globalization. How do we do it and what were some of the ways in which we enabled that? This is our route to consumer, RTC route to consumer. It shows you 2004 to 2014 an evolution in the influence we as Brown Forman employees have on the building of our business out and about the world. And so back in 2004 about fifty-fifty we see 51 arm's length. The term arm's length is that we had other folk building our business for us. We would contract and have agency relationships with either the competitors or standalone distributors in a number of markets around the world and they were able in many of these markets to bring our business to a certain degree of performance. Over the last 10 years examples we've moved this arm's length involvement in the building of our businesses much more to a business where we have what we would call control or much more significant influence over the way we build our brands. And it's been incredibly successful for us. We're now today 80% of our business. We would say we have some form of control. As I say it, I would like you not to take away a conclusion that it's a natural progression that Brown Forman will invest in its own infrastructure in every completely fix infrastructure cost on our P and L, although we've done that purposefully in markets such as over the last 5 years Germany, France, Brazil, Turkey, Canada, elements of Asia where we have fixed infrastructure cost and brownfield employees. But we've also got very successful not arm's length partnerships, but hybrid partnerships with companies even in our competitive set such as Bacardi in the U. K. Where the 2 companies together we've enjoyed 10 years of very successful business performance in that market because of a hybrid partnership we have constructed uniquely for the U. K. And for all intents and purposes, it's running very well and should do so as we look forward. If you move across Europe particularly Central Eastern Europe and look at some of the partnerships we've set up with Coca Cola Hellenic, one of Coca Cola Companies or the largest European bottler for Coca Cola Company. Our partnerships are hybrid arm's length partnerships. We bring it in a lot closer. We have a little more influence than we would have normally. And we've been working with Coca Cola now in 8 markets through Central East and Europe including Russia and the Ukraine, which we can talk about later. So this purposeful evolution of arm's length less influence to more controlled more influence is one of the ways in which we've been able to deliver those results that we looked at a little earlier in terms of our growth and persistent performance. And then lastly, I would just want to talk a little bit about opportunity. And the way I'd like to tee this up and you'll see a similar sort of illustration when the team described France and Brazil. The global IWSR will tell us that the global whiskey market is 360 some 1000000 cases of whiskey, IWSR total whiskey. International whiskey is the outside the U. S. Is of course the predominant proportion of that volume. Within whiskey outside the U. S, so 312,000,000 cases of the globe's consumed whiskey is consumed still outside the U. S. It's been growing very strongly, 7% growth, 10 year CAGR outside the U. S. American Whiskey is a sliver of that. However, we've been growing strongly. Jack Daniel's within that sliver has also been growing faster than the American whiskey category itself. So way we think about it from an opportunity point of view looking forward, John said we barely scratched the surface. I think he used that term a couple of times. Certainly, the opportunity as we observe the way in which Jack Daniels can gain the interest of both retail customers and consumers, we are demonstrating in multiple markets the ability to continue to increase our share of whiskey. I'll just finish it off here by saying that Jack Daniels has about 56% of share of American whiskey outside the U. S, 56% outside the U. S, 40 some percent if you include the U. S. Share of American whiskey. Sometimes we may sound or you may observe or conclude that Jack Daniels Brown Forman are riding some sort of like order the wind behind our back that we're riding the momentum of the growth of American whiskey. What we would say to you is that it's not like that at all. We're actually leading and driving the growth of American Whiskey around the world At a 50 some percent share of international American whiskey market, this has been a very purposeful, very concentrated and focused effort to lead the development of American whiskey around this globe. And as we look at that and consider the fact that our share of that whiskey is around 2% only today, I think the rest is in terms of opportunity speaks for itself. So there's the global oversight. And now you're going to hear a couple I'm going to introduce Armadore here who will tell you about some of this how he did it with his team in the emerging market of Brazil. Thank you. Thank you, Mark. Good afternoon, everyone. It's a pleasure to be here to talk about our journey in Brazil. And I will start by basically setting up the context and I think that's very important. Our brands have been in Brazil for a number of years, even difficult to detect when we first got there with different schemes, different distributors up to 2010. At that point in time, we came to a conscious decision that was about the time to do something in Brazil and we decided to make a bet in Brazil. And I use the word bet because there are a number of reasons that was a difficult proposition. Brazil, we didn't have scale in Brazil to begin with. Brazil is a very high cost market to operate in. We had formidable and still have formidable competitors in the market that have been there for a long, long time barriers of entry etcetera. But on the other hand, Brazil offered and still offers tremendous opportunities. The country had been very stable politically, socially, economically for a number of years. Institutions consolidated, so there was no risk whatsoever there. The economy was doing very well. And many of you might remember Page of the Economist with the crisis in Rio taking off. Unfortunately a number of years back they had to the crisis came down. But anyway in those days the crisis was flying all over the place. On top of that inflation was reduced. The emergency of a very large middle class Brazil has managed to bring into the middle class about 40,000,000 people in the last 10 years and plus 10,000,000 on the top of that on the upper end of higher end of the middle class A and Bs for us even more important. The demographics most of you know Brazil has a very large population 200,000,000 people and the 5th largest population in the world. So it makes sense to be there. But even more important perhaps and here we go, that slide that Mark referred to, A very large spirits market in general with consumers trading up from local spirits to more aspirational brands in various categories and a very large whiskey market both with local brands and in particular with Scotch whiskey in Brazil is not only the 6th number 6 in the world I guess, in whiskey in total, but for Scotch whiskey it's probably number 4. So the growth rates for the category interesting 6%. And our growth has been in the last 10 years CAGR 23%. As many mentioned before and again Mark just mentioned in his previous slide, in spite of all of that, in spite of growing 23% in the last 10 years, we still have just 2% of that total. So the opportunity is just was just there and it's still there for us. What we've done, we established a company. We barely had people there perhaps a country manager plus an assistant on those days. Now we have 60 people on board. Most of those guys commercial, sales and marketing how they're building brands. We've tripled the volume from 2010 to 2013. That's the last number you have there. But let me tell you the numbers look even better for the current fiscal probably go up just check Tennessee Whiskey probably go over 170,000 cases and the whole family of brands will definitely cross the barrier of 200,000 cases. So it's a stiring result establishing a brand that is really doing very well in the market. I have a page here to tell you about things that Jack represent. But I think again John said so much about it that I won't say much more. It does everything it does resonate with the Brazilian consumer, Yandkraude so well. It's a down to earth relaxed brand that is mixable. It just really goes around the area for the white spirits, consumers so well as well. And again the brand DNA and if you're talking about integrity, authenticity, independence resonates with this millennial consumer so well that's unbelievable. It's like Americana in a box in a bottle of soy plus. So it's incredible, incredible. And we are tapping on that. Mark asked me to tell you about how we're building that up. I think it's a matter of simple things. He's doing the obvious many times over. But it's a simple model with lots of focus. I mean if you don't have focus first, right? Find out what is really important to do, what's really moving the needle. The second establish once you establish that it's really focusing. In a country like Brazil large expansions, very expensive, very stiff competition, you got to really stick your resources both financial and human in certain brand building aspects of brand plus some geographies. And that's what we've done. We have a brand building model that's definitely working. It starts with an amazing digital platform that has been very creative. And as a matter of fact, Brazil has the 2nd Facebook page for Jack Daniels away from the U. S. With 1,300,000 people and is the number 5 in terms of in the country in Brazil of old consumer goods. So it's unbelievable in just 2 or 3 years. We're doing very well on that and generating not just being in the Facebook or whatever and we know how that moves so fast and turns around. But it's generating experiences and connection with consumers very relevant that link that to own trade activities that are very exciting, very unique experience that only Jack Daniel's can perhaps really deliver. No other brand can do with that much less watch whiskey I guess. So we're doing that quite frequently. The whole mixability thing with the field drinks not reinventing the wheel doing the same thing over and over Jack and Coke, Jack and Citrus. And believe it or not in Brazil Jack and passion fruit It's called Maraca Jack and does work very well. It probably doesn't sound very good, but it does taste very well and is another vehicle for consumption and attraction of young consumers and sea mayos into the brand. So, unbelievable work and we are very happy about the results. Again, you can see that not just on volume, but in terms of share of market as well. We've managed to get to 13% of the premium whiskey and more to come. The potential and here talking about what we see as the opportunities for us. As again many said before John and even Mark the opportunities we just scratched the surface. We started at the very beginning in 2010 and you can see there on the left hand side, we had strongholds basically in Sao Paulo and Rio as everyone else in Brazil. That's where we've been for many years. So we decided just to tap on that and really protect the hardcore consumer we had at the time and learn that and build from there. The second step perhaps toward already 2011 was moving to Recife. Recife is a city that you see up more north is a city of about 4000000 or 5000000 people. It's the largest scotch whiskey consumption per capita in Brazil and some say in the word today. So it's a large stronghold. It's the largest market for Johnny Walker red in Brazil and Brazil is the largest market for Johnny Walker red period. So it's you can see that. So we're doing some work there and it became a gold city for us. Then we expanded between 2013 2014 to Belo Horizonte in the middle of the country. But you can see a number of potential cities where we can expand the same model adjusting to regional realities because Brazil is large as the U. S. And as the U. S. Is a melting pot and as the U. S. Has very different regional aspects to brand building that we have to take into consideration. But from the south upwards Porto Alegre, Curitiba, Cuyahaba, Brasilia all cities with 2,000,000 to 3,000,000 people. It's a funny thing Brazil has more 1,000,000 people cities than the U. S. About 40 cities. So it's a much more concentration of urban large urban centers, which in a way facilitates our brand building. Jack consumption is 65% on trade, which again with the urban centers help. And I probably finalized by talking a bit about why I am very I am and the whole team in Brazil. And I think the team here in Louisville as well is we are all very confident on the future growth for Jack in Brazil. I mean we same expression again I'll repeat it. Scratch the surface just there. Lots to be done still. Potential for growth within the Scotch Whiskey category is amazing. We could bring it in here if we had more time the whole white spirits are in and the vodka where we have been tapping quite a lot of our consumers and building the brand on top of that as well. So it's more volume to come from that. The usage of whiskey in Brazil is just one fifth of what it is in Spain and the U. K, which is another thing. So there is more whiskey to be consumed per capita as well. We think that we have something on our hands as John said before that is very unique. It has all the credentials and we have the right brand building model to expand, to accelerate and just to make a very strong market for Tectanios in Brazil. I will finish basically by saying that on top of that I think and that's the sharing of the pie and I definitely believe on that that is it's about people. And we made a bet. We had a number of years losing money in Brazil and for all investors, when is Brazil going to make money? We broke even and now we're making money. But anyway, we will have to build brands to begin with and we invested on people and took us a while to get the right team in place. But I think and I'll say very proudly that we have a dream team in place that has a great mix of experience, talent, tremendous energy and passion. Everyone that goes to Brazil and visit the operation can see that and an ability to execute and to implement the plans that is formidable. So with that, I think we have everything to not just build more of our portfolio in general, but in particular Jack and the more premium expressions. And I have lots to say I could have lots to say about Woodford Reserve, Goal 27 etcetera that are all doing very well in Brazil. But to do something that is outstanding and to really make history for brown form a in Brazil. So with that, I'll leave you. Mark, back to you. Thank you very much. Thanks, Amador. So we'll move to Michel just in a minute. So Brazil as an example of how we did that as Amador said he called it a bet. We invested before the return of course. So and it seems to be working after many years of trying to find at arm's length a way to develop the business in Brazil unsuccessfully. Now we move to France where we had a pretty decent business in France working at arm's length with Bacardi as our partner. And yet the decision there was that we Michel and his team believed that focus may bring even more results and more influence would actually accelerate our growth. And here's the story of France. Thank you, Marc. I've been with Broadcomann for 17 years, leading our growth from 2 people in 97 to 100 today. France is the world's 3rd whiskey market and the 1st scotch market. Curiously, the French people bring more scotch than the British, but the British bring more cognac than the French. It's a massive market with all categories represented, but Scotch is by far the number 1. American whiskey is growing quickly, led by our work around J. Daniels, the steel and tapered. We drive 75% of the category by value but our 600,000 cases represent only 4% share today. Given the investment we have been making including this year's route to market change, we are focused on driving growth through leading the development of the American whiskey category in France. Let's look at the market composition today. It's a massive market concentrates on 2 categories. The French spirit market is about 37,000 cases of made of 15,000,000 cases of whiskey and almost 10,000,000 cases of pastis. Over the last 10 years, whiskey grows by 2%, but pastis declined by 4%. This whiskey market is dominated by scotch with 13,000,000,000 cases. And while most of the other category exist and we have also some French whiskies, American whiskey has delivered the fastest growth over the last 10 years with a 5% CAG and close to 1,000,000 cases. Steck Daniels represents nearly 4 quarters of the North American whiskey market and has grown sales by 13% over the last decade, the best performance in the market. One characteristic by France is its retailer concentration with 8 accounts representing 90% of the business and the spirit is excuse me, and the spirit is very the spirit is very the English is difficult. And the spirit is very much squeezed to the off premise. Historically, the French retailer have created the hypermarket concept and a hypermarket concept is you buy everything in 1 store. Instead of having a mall, you have one thing so you can have clothes, food and everything. Bondformin needed to have the flexibility to allow us to build up an organization that best position us to work with a retail partner. This includes leveraging our growing size to stay front of mind of retailers and then build up a profitable partnership with them. St. Daniel's has been the backbone of our growth over the last 10 years. With consistent growth of the last 8 years, we doubled the growth of the last 5 years and we have now 16,000 cases that represent only 4% of the market share. Constant growth is based on leveraging and bringing to consumers the unique brand legacy duplicated by an emotional image that rings very well to the consumer aspiration. This is summarized by our advertising message: Jack is not a scotch. It's not a Bourbon. It's Jack. But you see that we are still in the universe of the whiskey, but nevertheless it's Jack. So we are unique. We are different. Finally, Chey Daniel is perceived in France as the original premium crafted American whiskey. It's also important to underline that the Jack Daniel's results and the core brand image has been did create this law is Mr. Eves, which means and the name of the minister that be created this law is Mr. Eves, which means which is curious because Eves in English means wine. So it's Mr. Wine that built up a regulation law. And this regulation law in fact say that you can talk about origin, tradition. You can. You can talk about origin, tradition, the way of doing the product, about the legacy. The only thing you cannot do is transmit emotion. So for instance, you cannot transmit emotion. So I am able to say, take Daniel's is made from Tennessee, but I am not able to show a nice person, top model or man, whatever we want, showing a glass of Saint Daniel's. The consumer focus and the consistency of our marketing plan explain the attraction of new consumers, getting share from the other category. This growth is also the result of an excellent commercial relationship with the trade based on creating value for them. Based on the Jacques Daniel success story and given our goal of leading the category growth in France, we decided to expand. But we believe the best way to drive the future growth was through owning our own distribution. In January 2012 14, sorry, so it's this year in fact, we hired almost 80 people coming from different origins of background, 1 third from the spirit industry, 1 third from FMCG and were some from the oil industry. Our strategy anchored of having the right people join Brown Forman and infused the Brown Forman culture through the organization. This has been done through a combination of people and training from Louisville. I don't know if I pronounce it, it's Louisville. As well as something we call Global Orientation. And this is a program that everybody loved in France, it's a Global Orientation because Bonn Pommel bring people from France and we send the people in the U. S. And then they go to visit the distillery, meet the leadership team, go to the Bougas corporation where we produce our barrels and they like also to go to see Woodford Reserve Distillery because what you don't know is the Woodford Reserve Distillery is in the county of Versailles which in English is Versailles. Yes, excuse me. I just was there tight. Cross selling brand including our desire to own our American whiskey outside of the U. S. Through prestigious brands such as Woodford Reserve to address the premiumization opportunity. So we have the right portfolio for the market and now we have the right to market to be enabled to gain to get further gain. So despite can you come back please? So despite an 11% CAG over the past decade, Montformin France still has only 3% of the spirit industry landscape. Over the medium term, we are targeting more than 1,000,000,000 cases. This is important. But even that number will only have brown form and a 5% share. Based on the development of our American whiskey portfolio, the expansion of the category and our investment in passionate people who are focused on our brand, we believe that France will continue to be a large growth Thanks, Michelle. And of course, Jill and I have been sort of walking the world overseeing and facilitating a lot of this change that is being described here. Just for a moment, we're just going to ask Jill to focus her attention on not all the world that she is stewarding, but this amazing market in the U. S, which I know you all have a high level of interest in. So Jill will tell you the U. S. Story. Thank you. So you've heard that the United States is a smaller portion of our overall earnings. And that's definitely true, but the United States is still the most valuable spirits market in the world. It has retail sales above $36,000,000,000 that's in the off premise and it's added 5,000,000,000 cases in each of the last 2 years. In this really important market in a very competitive environment, we're delivering top tier results. You can see on the left, we've gained market share in each of the last 3 fiscal years. And in F-fourteen, we outperformed these large suppliers you see on the screen. We've done that because our portfolio skews to American Whiskey. And in American Whiskey, we are the leader. You're going to see that our brands resonate with consumers. Jack Daniel's is the number one brand. And as we keep going closer and closer to 5,000,000 cases in the U. S, we're still growing impressively at 4.5 percent for the number one brand. John mentioned that we introduced Gentleman Jack in the late 80s. It was the first extension we had done in 100 years. And you would look now it is now the number one brand in the $25 to $30 price segment and it's growing nicely at 10%. This one I enjoy a lot. In the 1990s when whiskey was declining vodka was king. Everybody was talking vodka. People are entering vodka. Brown Forman made a different decision. We said we're going to go to Woodford County, Kentucky for sales and we're going to build a distillery with pot spills, unheard of. We did that in the late 90s and it is now the number one brand in the $30 to $40 price segment growing 26%. And when Mitch McConnell Senator Mitch McConnell and President Obama were talking about the Bourbon Summit, it's why Saturday Night Live chose Woodford Reserve, because it is iconically a Kentucky Bourbon and it took a chance when everybody else was playing in vodka. Then we introduced in the late 90s another extension of Jack Daniel's, a Jack Daniel's single barrel with higher proof, very robust. It's the number one product in the over 40 price segment. In 2011, we introduced Jack Daniel's Tennessee Honey. This is a way to attract new consumers to the franchise and to give existing consumers a different way to drink Jack Daniel's with a little bit of honey and a whole lot of Jack. And you can see in the $20 to $25 flavor whiskey category, again, we're number 1. But I just have to talk about Old Forester. Old Forester was the 1st bottled bourbon that came with a written product guarantee. It's the only bourbon that was around before, during and after prohibition. And it was around during because we got a medicinal license. And let me tell you in the years of prohibition there were a lot of sick people. We introduced a lot of people to Old Forester and it's really what established us as the American whiskey leader. So how do you say the leader of American whiskey? Well, you don't take it for granted. There are now a lot of people getting into American whiskey. You hear a lot of noise. And we have to make sure we're talking every bit as loud. So what we did this year is we mobilized our workforce, best in class workforce, asked our partners to help us. We invested incremental time and focus and money behind the brand. We put it in media. We put it in off premise and on premise. We ramped up our digital efforts and we focused on the multicultural markets. And it all paid dividends. As typically happens with Jack Daniels, the more you give Jack, the more it gives back. We're also engaging consumers because it's so important to tell our story. Everybody wants to come into this segment and they're creating brands, they're creating stories, but we have an authentic brand with an authentic story. There was actually a real Jack Daniel's that nurtured this brand. We have people, real people in a real town Lynchburg does exist that make the whiskey every day. We take ricks of sugar maple and we make our own charcoal. And then drop by drop every drop of whiskey goes through 10 feet of this charcoal mellow, which uniquely makes it a Tennessee Whiskey. And then we put it into a barrel that we craft for us and we create Jack Daniel's. Then of course, we introduce people to our master distillers that you're going to get to meet today and they learn the art of whiskey making. And then we invite people to our home places. We invite them in. They get to walk around, see how it's made. They get to see people, meet people, smell our product, taste our product. And when they leave, they're ambassadors of our brand. Now on screen you're going to see a lot of new brands. As consumers are there's more craft distillers and consumers are getting used to different products and wanting to experience new things. So we as well have started to introduce new expressions. So we have some that are more robust. There's an Old Forester 18 70. We call this our Whiskey Row series. There's a Woodford Reserve Doubled Oak doing a great job. Jack Daniel's Sinatra and Jack Daniel's Rye. And then in the flavor category, we have Winter ready to drink, absolutely delicious, a bit punch like, great for the holidays. And we have Honey and we recently announced we're introducing Jack Fire. And then we have some seasonal offerings that our master distillers put together. So we have an Old Forester Birthday Bourbon that's created each year And we have a Woodford Reserve Masters collection. This year was the Woodford Reserve bourbon was finished in a Pinot Noir wine barrel, absolutely terrific. This is probably my favorite slide. So what have all these efforts done? They've helped us accelerate Jack Daniel's to generate these kind of results. We're very proud of being the leader in American whiskey and we're very proud of how we're doing in this country of origin. Thank you. So it's always exciting to hear about the brand building efforts that are going on in 3 of the world's top whiskey markets. But we're not ready to leave the stage just yet. We have a few more stories that we want to tell that speak to the themes that you should have heard in today's presentation. The themes of capability building, the themes of focus and the themes of consumer relevance. So before we leave, we got a few more stories to tell in each of these areas. And so I want to, Amador, return the stage to you for a minute to give us some more information about a focused approach. Why has this mattered so much in Brazil? And what have you done to take a focused approach to build Jack Daniels? Thank you, Kirsten. This is Jorge. Well, I said a bit about focus during my presentation, but it gets back again to the fact that in the case of Conforma starting from pretty much nowhere with very little scale and no structure. If you don't have focus maybe you can get anything done. Large market, large competitors as I said, very high cost of doing business. You really have to set up your priorities straight and just stick to them and make sure that we have the right capabilities and then get back to people. And the ability to execute them very well consistently over time to make sure you get results again against the brand, against the program, against the market until you learn more and then develop that. So if you don't have that, you scatter your resources, you're limited and you pretty much go nowhere and then frustration comes around and you know the story. So I think focus is absolutely key. In my case it was absolutely key and continues to be absolutely key. I mean as I said before the setting up or trying to decide with the team what are really the key priorities is Pareto 8020 and then setting the programs around that and focusing on those and consistently year for year don't reinvent the wheel just keep it going. If it's working, just don't reinvent it, just do it. So that will be my answer in a nutshell. How about you Michel in France? How is it similar and how is it different? For Clusid, it was a key word or is still a key word in France. As you heard previously, we set up our own organization in France this year. And when you weigh 3% of the spirit landscape compared to the big one and when you go to see the retailers and I said that the retailers are very much concentrated in France. We have only 8 major retailers covering 90% of the business. They thought that we will open our portfolio to all the products including vodka, including Chambord, the French Liqueurs, including the tequila. And in fact, strategically, we focus on the American whiskey, Saint Denis, but also Woodford Reserve. And they're surprised because this focus thing make us having the, I would say, the positive points or the positive arguments. And also it's the thing that make us very strong in France is the Americas business. So Focus was a key success of launching. And now I can tell you that after a year, we have a very consistent growth in France because we were focused on the American whiskey category. Thank you, Michelle. You all also spoke about consumers, whether they are multicultural consumers, the rise of the LDA to 29 population in Brazil. Jill, what else can you tell us about what's happening in the U. S. To resonate with consumers in terms of our brand building efforts? Yes. I'm ever amazed at whiskey's resurgence. So I think back to prohibition ended in 'thirty three. And when I was a little girl, I remember my parents drank whiskey. And that was really all that existed. Vodka was hardly anything. And suddenly it started declining. And about 2011, I guess, when we introduced Honey and Fireball started becoming notable and bigger and craft distilling started really coming about and people wanted flavors, you see consumers wanting that. So we're responding to that. But the new generation that it's their first time to really come to whiskey that wants a different experience. They want to taste something different, but they also want a true different experience. They want to go out and discover something and they want authenticity. And they get a lot of their stuff from digital and social. They want to interact. And so we've had to really ramp up our capabilities around digital. Of course, the face is changing in the U. S, a very different consumer, multicultural consumer. So we've had to get better at marketing to multicultural. And like Jack Daniel's Tennessee Honey resonates great with African Americans, Hispanics. So we see a lot of different things in consumers. We're trying to stay relevant. We've hired some new assistant brand managers that are younger millennial consumers to help us really tap in and understand and meet their expectations. Michel how about with you? What's making a difference with consumers in France? In fact, it would resonate to the French consumer regarding Jacques Daniel said that the opposition between Scotch and between American Whiskey and Jack's Scotch. And you heard that we are a strong consumer of Coach in France. And this is for fashion with rules with tradition. The way of consumption is very strict where with Jack Daniel's American whiskey, but mainly Jack Daniel's is resonant much more in a crude way. It's much more not liberal, but it's much more much more easy to drink. And I like very much when our master distiller for instance when he came last year in France he said people always ask to our master distiller how do we drink Jack Daniel? And they expect that they say straight or on highs. And the master distiller said, Chef Arnett said, drink the way you like it. And this is typically the kind of difference and the way it resonates in France. And then I would say that it's a bit like our American and French relationship like all couple. I mean that sometimes we like us, sometimes we do not like us. But nevertheless, with Jacques Daniels, we will be always together. I think that probably brings an excellent end to our discussion. Thank you very much, Michel. This is we are done now here on stage and I'd like to welcome Jane Roe, our Chief Financial Officer. Thanks, Kirsten, and thanks, everybody, for joining us here today. I've got one more thanks, and thanks for hanging in there. I'm the last presenter, I promise, before Paul comes up for some closing remarks and we open it up to some Q and A. And perhaps more importantly, before we invite you to join us for a cocktail reception, and you can enjoy and get a taste of some of our amazing products, including Jack Daniel's Tennessee Fire. But first, before we get before we do all that, I wanted to share some financial metrics with you to pull together and summarize what all my colleagues shared with you today. And so with that, let me start with a chart that many of you probably have seen before. But what it's doing is illustrating some of our key financial metrics that we look at in our P and L, our net sales, our operating income and our EPS growth. So I'll start off with our net sales. And when I look at this, the charts that you see up here, you see a very steady consistent growth in our net sales over 35 years, 25 years, 15 years and 10 years. And that's been driven by our consistent investment in both our people and our brands, our intense focus and our great brand building efforts that we do. Further, if I showed gross profit, you would see further leverage. In other words, you would see the bar on gross profit for each of these time periods above my net sales growth. And that's driven by our pricing power that's supported by our premium brands as well as some positive mix benefits that we've enjoyed from expanding Jack Daniel's around the world and just really becoming more global. So that leverage that we enjoyed through gross profit and some additional modest leverage from SG and A, you'll see that operating income growth over all the periods of time that I'm showing is growing faster. And one more bar, more leverage. So all the things I said about what drove our operating income growth is driving our EPS growth as well coupled with 2 things share repurchases as well as over time our tax rate has come down gradually. And so I think I wanted to pause here on this chart for just a minute because I wanted to point out a couple of time periods 35 years and 25 years included the Dark Ages that Lawson was referring to and American Whiskey in the U. S. And these are quite great growth I think over those periods of time despite the fact that the category was against us. So I think it's a testament of our ability to grow our brands in a period of time regardless of the category momentum. With that being said, now we've got the category momentum in the U. S, the wins at our back. We see that our brands are doing very well. Our premium American brands are doing very well around the world. And we think we're in a great position to seize opportunities for future growth. So now what I want to do is step back for just a moment and look over the past decade. And what I'm defining as the past decade here starts in 2004 through 2014. And I would say there was a substantial change over that period of time. It would be a decade of transformation and maybe another way to say in it Well, we went back to our roots or this company was built on and we're a pure spirits company. And so when I looked at when we look at the beginning of the decade in 2004, we would have been defined as a multi industry company, where 36% of our revenues would have come from popular priced wine brands as well as consumer durables. At that time, we owned Hartman Luggage and Lennox China, excuse me. And so over the last 10 years, what we've done is through active portfolio management, we actually disposed those low margins, low growth, highly cyclical businesses. And we also had some selected acquisitions over that period of time where we diversified our spirits portfolio a bit to where if you look at the 2014 year end, our sales from our business was 96% from spirits. Heartland referred to the last 10 years as a continuation of our globalization efforts. It really started in earnest in 1994 by our former Chairman and CEO, Alfie Brown II. He had the foresight to see the global opportunity for American whiskey to introduce American whiskey to consumers around the world. But still in 2004, we were very much a U. S.-centric company still with over about 2 thirds of our revenues coming from the U. S. At that time. If fast forward to the year end that we just completed, we're getting close to 2 thirds of our revenue is now coming from outside the U. S. That growth has been built on the backbone of Jack Daniel's, the expansion of Jack Daniel's and some route to consumer investments that we made to further build Jack Daniel's around the world. And my what a decade makes for us, if we look at the beginning of the decade, the American whiskey category was still declining. And then over the last 4, 4.5 years, there's been a rapid increase in the U. S. In American Whiskey. And that's what resulted in what we believe is the wind is at our back and opportunities line ahead for us. So all this put together, we believe has really positioned us quite well as we look ahead for further growth. You see all the different things that we're saying over here. The one I'm going to focus on beyond the wonderful margins that now have come and the capital efficiencies is really the cash generation business model and what's driving that superior cash generation business model. Paul actually shared a couple of slides with you about our business model and I'm going to go a couple of little different directions for him. It's really building on what he did. So I want to start with what makes an excellent business model. And I think it starts even further up the P and L. You got to have great gross margin. And you see in this chart here, we have excellent great margins, almost 70%. Improved over the last decade. You see the margins up here. And that we believe has been afforded by 3 primary factors. First, our pricing power that Alex referred to throughout his presentation, the barriers to entry that exist to get into the whiskey, an intense amount of investment both in working capital as well as capital spending to get into the whiskey business provides pricing power to our brands. Cost efficiencies that Alex also referred to have come through our margins over this period of time being source production and then the vertical integration that results. And both John and Lawson talked about our skew of our portfolio to American Whiskey and primarily Jack Daniel's. And with that comes terrific margins. In fact, our margins are industry leading. They're nearly 9 points better than our competitive set. So this chart looks at our 10 year average net income margin compared to the S and P 500, the consumer staples as well as our peers. And despite us being burdened with a higher tax rate because we're a U. S.-based company and the consistent investments that we've made behind our people and our brands including one we talked about here today, our France RTC that happened over this past year. We have the best net income margins you can see compared to all of our industry as well as above significantly higher than the S and P 500. We really believe that the quality of our earnings is very high. And I'd like to use this little ratio here. Ratio of free cash flow to net income at 90%. If you were to compare that to the S and P 500, this is over a 10 year period compared to the S and P 500 conversion ratio of 67% and we're further ahead of the consumer staples at 38%. So I like this margin, this net income margin. It's a good proxy for the efficiency in which we turn ourselves into profits. And it's also one of the factors that are driving these top tier returns on invested capital. Again, Alex talked about all the things that we have to do, planning ahead, seeing the growth several years down road to lay whiskey down that's inherent in our business, making the investments that we have been and are continuing to make so that we can make the products at our production facilities. And despite all that, we still generated a 22% return on invested capital this past year. So in addition to our return on invested capital, this has come in part to our focus and our superior efficiency. The way we target our opportunities is we target them very by looking at and balancing our risk and reward. Paul talked about this a bit earlier too. And so as you heard from our geographies today, we don't put all of our eggs in one basket. We've really diversified our business geographically. And we think that's one of the reasons why we have had performed so well over the long periods of time. So we take a long term approach to our balance sheet and we have low levels of debt that have are required to generate our EBITDA. So when I pull this all together and look at the model that we have, the industry leading gross profit margin, the exceptional net income, the top tier return on invested capital and the low debt that's required to generate our EBITDA multiple, it turns into quite a cash generating machine. And so that's a good segue into this next chart. And we'll look at our 10 year cash. And today, depends on the stock market I realize, but we're somewhere around a $20,000,000,000 company in market cap. I'm starting off with this first chart here because 10 years ago we would have been $5,700,000,000 company in market cash. Over the 10 year period, we essentially generated this much cash from our business after funding our P and L items to grow it, which is pretty amazing. So what did we do with that cash over the past decade? About a third of it was invested back in our business in the form of capital spending both in working capital terms and CapEx as well as acquisitions. And a third of it was returned to our shareholders in the form of ordinary dividends. And the remaining third went to our shareholders in the form of special dividends and share repurchases. So the combined return to our shareholders was about 66%, so about 2 thirds of it went back to our shareholders. And so when I look at our philosophy or our prioritization of our capital and how we allocate it, we first and foremost prioritize it to fund our business, to fund the organic growth of our business. And so again, we have to invest ahead of the game in working capital and primarily barrel whiskey. That's the biggest piece that we are investing in. And the second thing that we have to invest in is our capital spending, which you heard from Alex this morning. Historically, we've spent around 2% to 3% of our revenues back in CapEx. We are, over the last couple of years, spent a couple of $100,000,000 collectively between 2013 2014, projected to spend somewhere around $120,000,000 to $140,000,000 this year. We expect that level of investments to remain high for the next couple of fiscal years before we return back to more than 2% to 3% of revenues thereafter. But again, we're making these investments for the growth that we see and the potential we see in the business. 2nd area we look at is dividends. We want our dividends. We want to grow dividends and we want to grow dividends as our earnings grow and maintain a payout ratio somewhere in the 35% to 40% range. So if you look over the last 69 years, we've paid dividends. We've increased our dividends over the last 31 years, making us a member of the dividend aristocrats. After the dividends, then we look at acquisitions and we look at those opportunistically. The company has been built on a combination of acquisitions, innovation and organic growth. I'm going to come back to acquisitions in a moment. Okay. Assuming that we don't find suitable acquisitions, then we're going to look at how do we return our excess cash to our shareholders. And we generally look at either a combination of share repurchases or special dividends. So if I were to show this chart over the last 5 years, what you would see missing from this chart is acquisitions. We haven't made any acquisitions over the last 5 years. I thought it might be worth taking a few minutes just to talk about our philosophy and our approach to acquisitions. And with that, Lawson had shown earlier, our focus on being the leader in American whiskey. But he also mentioned that we would be interested in attractive categories in whiskey. And we publicly have noted Scotch and Irish. That's easier said than done. You've got to find those brands that meet the criteria that we're looking for. We're very disciplined. We have a high bar that we've set for what we're looking for in terms of what we use a term as it's attractive. So what's attractive business if you will? We're looking for a good business, something that has characteristics of nice margins, good returns on invested capital, has growth, sustainable, not just over the last couple of years, so something that has nice growth with it, can be meaningful in size to us. Quite frankly, we're looking for something that has characteristics such as Brand Forman. In fact, we find if we don't find brands that are suitable for that meet our criteria, if you will, we're better off investing in ourselves with that great model I just shared and Paul shared with you earlier today through share repurchases or innovating much like we did with Woodifield Reserve back in 1994. So the one other thing I wanted to mention about this chart is that if I then looked at over the last 5 years and took out the acquisitions, I 75% over the last 5 years. So I'll spend just a minute just looking at how we've returned cash and capital to our shareholders over the last 3 decades. This chart illustrates rates that we have consistently returned or consistently increased our dividend over a long period of time. In fact over the last 20 years, we've increased our dividend at a compound annual growth rate of about 8%, which is consistent with the growth rate that we just announced a couple of weeks ago in line 8.6% was our increase for next year's dividend. We bought it back over the last decade a substantial number of shares of our stock and thereby reducing our total share count by about a third from where it was some 30 years ago. And more recently, we've sent some special event driven dividends, some special dividends totaling 1,200,000,000 dollars since 2,008. So in aggregate, the return of our capital to our shareholders has been one of the reasons and one of the factors that has driven our total shareholder return. And so I talked about all the refocusing of the company over the last decade that we've done to set us up and better position us for growth as we look ahead. But we've also simultaneously delivered industry leading total shareholder return. You can see all the benchmarks behind me. We actually outpaced the competitive set and the S and P 500 and the S and P 500 by a factor of 2 plus. So all this has been propelled by our high industry leading top tier operating income growth over that period of term as well as our return of capital to our shareholders. So we like many family owned companies publicly traded want to deliver the greatest shareholder return we can, but we also want to do it with a balance of risk. And so I think I'll share this next slide with you. And what it does is it looks at the S and P 500, so the 500 companies in the S and P 500 and then it slices them by total shareholder return as well as beta, beta being a proxy for volatility. And so this first slice is how many companies delivered above the 200 above the S and P 500 total shareholder return. There were 276 of them. Well, when you put another factor on there beta, that number goes down to 133 companies, of which Brown Forman is one of them. When you put Brown Forman's metrics on there and you say how many companies actually delivered a higher total shareholder return than Brown Forman with a low to low beta and there's only 5 companies that did so. And this is over a 10 year period of time. And so you can see that we are in the 99th percentile of companies delivering top tier total shareholder return with the least amount of risk employed. Okay. So I got one more chart and then we've I got 2 more things. Then I got one more chart on market share, as it would be in similar format that you saw earlier from some of the folks that just came up on the country. Now I'm going to focus on value. More numbers, right? And we're talking about dollars here. So I think this chart is a really good example of the great success of our strategy over the past decade. So let's start off with IWSR on a value basis. And the total global spirits on a value basis was over 300,000,000,000 dollars for 2013, of which whispeas represented 20% of the total, growing at a very healthy clip over the 10 year period from 2,003 to 2013 of 7%. Jack Daniel's in 2,003 represented 6% of the total whiskey pie and it represented 39% of American Whiskey. If you fast forward it to today, you've heard a lot of the investments we've made over the past decade, the development of our brand, geographic diversification, the investments in our people. What you'll see is in 2013, we gained a whopping 1% market share. We went from 6% to 7.4%. And while I say that is you saw the great numbers, the industry leading total shareholder returns, the great growth rates that we experienced and yet we only have increased market share 1%, which makes us very optimistic as we look ahead at the opportunities that lie out there. If you look at that market share and say where is it coming from, you can see we only have 6% outside the U. S. On a value basis, 14% in the U. S. Thereabouts, again illustrating the opportunities that lie ahead for us. And perhaps even more impressive is while we've grown the category, our market share of the American whiskey category from 39 percent to 46% over the past 10 years. In the outside the U. S, we would have grown it even more from 50% to 62%. And so I think this illustrates we believe this illustrates that we are clearly the leader in the American whiskey category. And we've got a lot of untapped potential to get to, so we see a lot of growth ahead for us. And so in summary, I want to leave you with why we believe Brampton is a great long term investment. I want to start off with reason 1. We really do believe that we've got one of the best premium portfolio of brands in the world focused on the fast growing American whiskey category. And with that, we don't have a local low price brand in our portfolio. 2nd, we own Jack Daniel's. It's an iconic brand. It's one of the true global brands of all brands, all kinds of categories in the world. It's very special. It's very powerful. It lives, as John described, in a rarefied air, both in terms of scale, price point, efficiencies. And we believe, as you saw from that chart and what we showed earlier, that we have tremendous opportunities to grow both in the U. S. And outside the U. S. And with our singular focus on this brand that Paul and Kirsten referred to, we believe that the development and we can continue to develop this brand is a true competitive advantage for us. 3rd, this really has to do with production that Alex was talking about earlier. We've been in this business since the beginning of time, 144 years. We know the whiskey making business. We know the quality. We know it counts. We know how to plan for it. We know what to do, the various levers. We know it takes investments. But we know from this, we understand the full supply chain. We've got single point production efficiencies as well as vertical integration that we think are competitive advantages to us. And then I spent a few minutes ago just talking about we are the leader in the global growth of American whiskey. We have been over the past decade. We have built it outside the U. S. And we will continue to do that through our focused investments in people and brands. And we know in the U. S. We're well positioned. We've got the premiumization trend. We've got innovation and of course organic growth behind us. But outside the U. S. It's untapped with such a small market share that exists. 5th, we've had an incredibly long track record, we believe, of being strong stewards of capital, investing behind our business, making acquisition opportunistically and returning cash to our shareholders, all shareholders. And 6th, we have a very committed, passionate, engaged family, Brown family behind the company, which we believe is an extremely competitive advantage. And the family, much like all of you in this room today, wants less and more than to see earnings growth sustained over long periods of time, growth in dividends as well as capital appreciation. And we believe Brown Forman is very well positioned to do just that and to take care and to thrive and endure for generations. And so I've got one more thing we're going to share with you before Paul comes up here with closing remarks and it's a short video. With that? I think the characteristics that unite a lot of us Browns include a desire to connect with other people. And I think that relates to the company directly in as much as most all the people I've ever talked to love working at Brown Forman. They really love working there. And I think there is a sense of responsibility to take seriously all that's been given to us. But somehow it goes beyond that. Gran Forman is just constantly creating new interesting things. It's still a very creative and dynamic place. It's one of America's few companies that has gone 5 to 6 generations owned by 1 family. When my father started, it was one product from Square and A Little Forrester. Can you imagine going from 100,000 cases to 2,000,000 and then it was 4,000,000 and now it's 12. The family brings in a continuity that you don't see in other companies. And thanks to all that. I just don't think we've lost our way and God willing I don't think we ever will. We're making a transition to the Q and A now. Thanks for hanging in there to what I hope you all consider to be a much deeper look at Brown Forman Corporation today through the leadership that we've had with you in the room today. And so now I think is an excellent opportunity as you've heard from us for us to hear from you as it relates to any questions that today's presentation has brought up. And I'm going to ask my colleagues who've been with us today to I'll try to MC a bit and direct questions. So you all feel free to direct them yourself, but I'll play the role of sort of MC up here to help us through the Q and A. So why don't I have everybody come on up? Great. Okay. Anyway, I think we've got roving mics just so everybody can hear you and we'll try if we can't we'll try to repeat the question. Can you hear me now? Yes. I guess two questions. 1 maybe on the operational side. Are there with all the CapEx, with all the expansion going, I guess, how far does this get you? And are there any areas where you could run into capacity constraints the next 2, 3 years from the super premium side to certain parts of the business. And what will this do? Will we see the next kind of build 20 years from now, 30 years from now? I mean, how far does it get you out? And then one on the cash question, if and this is a big if, there is a tax reform in the U. S. And there's maybe an repatriation holiday. Is that a possibility? Can you maybe talk about what kind of cash you have perhaps overseas? And would that be a possibility for a special dividend if that's? I'll maybe let Alex address the first question that you asked about how far a run do these recent capital investments we're making? I mean, what sort of horizon did we have when we entered into them? So when we're looking at capital investment, we're looking at a 10 to 20 year horizon. So today, we're looking at, okay, so what do we need to do in order for us to ensure that we have supply until 2025 and what flexibility we have to build in order for us to ensure that we can continue to grow growth until 2,035. So all of that to say is that based on our outstanding planning process, we believe that we are in a good position to supply premium and super premium products. And one thing just to add. Throughout even in that base of our historical CapEx, we were always doing a form of what we would today define as expansion. And the premier way we did that was through warehousing. We were always adding warehousing. And so some of those are in there. What's in this more exceptional level over the last couple of years is actually expanding distilling and then expanding cooperage. And so those we think will be in some ways more significant during a short amount of time will set us up for sure. And Alex referenced the modular nature of what we're doing, particularly at Jack Daniel's distillery. There could be additional CapEx down the road as we continue to expand as needed. But the most significant amount of it is going on right now. And then, Jane, did you want to handle the question on trapped cash and the big hit? Yes, trapped cash, yes. So when we look at the cash we have overseas, we've grown bigger overseas. So clearly, having cash overseas is more important and needed than we have historically have had. I think your question really was directed towards would we bring cash back or special dividend. And I think we generate enough cash in the U. S. But that wouldn't be why we would bring it back. Would approach our capital allocation much like I described here today. We would go through the process in terms of what makes sense, where do we need to fund the business, dividends, ordinary dividend and its growth, acquisitions and then the other portions of it. But we wouldn't do it just to bring it back for a special dividend. Can you just talk about if you think industry consolidation helps or hurts your business and then maybe the relative merits of scale versus focus in the industry globally? Sure. I mean, it depends on who's being consolidated and who the consolidator is in every instance, I think. Over longer periods of time, hinting at the second question, we feel that particularly in this industry that and you saw from some of the relatively meager share numbers that while of course scale like the major decision in going forward in terms of integration toward owned RTC is coverage, fixed overhead. So you need to have a business that's scalable enough to support the investments you make in an RTC. But as it relates to getting shut out at retail by more larger portfolios and that kind of scale, I think that we would opt for the more focused model that has served us so well. And I'll just pass maybe Michelle and Amador. I mean, Michelle for sure, who has a very concentrated retail environment to comment on the difficulties that you might experience by being smaller than some of the larger players and the trade off between sort of scale and focus in that case? Absolutely. For us, yes. Absolutely. So the fact that in fact we were not even facing the trade because we were working with a distributor partner in France. So we have first built up what we call the key accounts and then we face the trade. And obviously in France as I said earlier the concentration of the trade may impact the relationship and the negotiation with the trade are extremely tough I will say. But nevertheless due to the fact that we have the co brand it works very well. Yes. And maybe Jill, I'll just say as the example from the world's largest distilled spirit market. If you looked at the relevant performance of larger versus more midsized versus smaller companies in the U. S. Distilled spirits market, I think you'd find over the last for sure, the last 5 years, and I think it would hold up even over 10 because of the performance in the last 5, The smaller, less scaled companies, those that would profess to not being in the scale game, have had far greater success in this market than the larger players. So I mean that holds up to almost any data. Yes. You saw it on the data that was on the screen. And I would say that we aspire to be big, but nimble like we're little. So I mean I think we like where we are. We like focus and the ability to try to move things more quickly and not get stuck in bureaucracy. Of course, there's always trade offs, but focus has served us very well. And if you look at the folks on the screen, you can see that we are outperforming them. Just on the fire launch, do you ever consider using old Forrester in the Jack Daniel sort of launch just given the price point of the incumbent there? And also like maybe the risks of the brand equity in case it doesn't go as planned? Yes. Well, when we look at the opportunity for all the trademarks, but we certainly wouldn't put Old Forester in a Jack Daniel's bottle or anything like that. But as the main asset going forward for our company, we just and that's why we went and tested it. And I'll just I mean, as an example of what you're talking about, we've had in the U. S. Marketplace and I think in maybe 1 or 2 international markets an early time sentiment expression that has been out there and done okay. But you all just need to understand that the power of the Jack Daniel's trademark, I mean, it significantly scales up the opportunity for our company when we consider it that way. And but we don't enter in it lightly. I mean, I think a lot of companies might have entered that business a couple of years ago. And we're been a little bit more measured than many because of what I think you're referencing here, which is just to be careful and cautious enough to make sure we know what we're doing and what the impact might be to longer term brand equity. Yes, Ian? Oh, you got one over here and we'll come back. Hey, Paul, nice to see you and thanks for bringing the team up to make the presentation. I guess a question two questions just related to growth potential in emerging markets. And I guess if we kind of look forward over the next 5 years or 10 years, Could you talk a little bit about first, how that might affect leverage in the company? You've had really good operating leverage, gross margin leverage. Is there something that we would give up in terms of expanding into emerging markets? And then second, if you step back and you look at how you're allocating your spending and investment across the entire portfolio, so outside of American Whiskey, would you will you be taking resources away or allocating more resources towards that development and maybe away from some of the other businesses or brands in the portfolio? Anybody want to talk about maybe Lawson? Or I mean, I'll just say and just while they pass the microphone that yes, I think that on this question of resource allocation, I mean, we would say we've been in investment spending mode, for example, in our tequilas since we bought them. So I mean we feel that within the portfolio, I feel like those things that offer the most attractive returns, regardless of whether the category has momentum or not, we're going to try to do what we think is a proper job of brand building. On the emerging markets, I don't know, I mean, we'd have to go look at it by individual market versus as a whole. But in general, I mean, I would anticipate that we would continue to get the same sorts of leverage as you went down the P and L in those emerging markets that we've seen over the last 10 years. And I mean, I personally I mean, I was every time I see the presentations that are made by my colleagues here. I mean, in each of the markets, I mean, I would I know over the I don't know if I'll still be around Brown Form, but over the course of, say, a generation, I would be really disappointed if those weren't, when that one chart we showed, minimum level of volumes, if all those markets didn't have, I mean, the potential to go past 1,000,000 cases over the passage of time. Always the question is how fast and what level of investment is required. But they certainly have the population and the pill of whiskey in those markets. And if Jack Daniel's continues to do what it does as the leader, I can't imagine that we wouldn't be making whiskey and anticipating and investing that they would be much more largely scaled. I mean, Amador's example, I thought it was a great one today of virtually 20,000 case market now to forecasting going over for the family 200,000 cases. So in that kind of example, you just start to extrapolate that over the next sort of 10 years and then take it into markets of equal population size with growing middle classes that have whiskey as a core category. I mean, I think we would remain very optimistic about it. Yes. We've spent in the last even year, we spent a lot of time looking farther and farther out on Jack Daniels and where is the volume going to come from over 5, 10, 20 year time periods. And very much true that emerging markets are going to be increasing important. They've already doubled and tripled in size for us in the last 10 years. So true, we are going to be investing more in that, but how you do it has a huge impact on the margins. And for the most part, our margins don't really vary that much around the world. Brazil is sort of the exception to the rule. And when you get into some of these very much larger markets like the China's and India's and Africa and things like that, whether or not we would go in and go higher and I'll make it up in China, go hire 1,000 people and go develop the market that way is probably not the way that we're going to do it. So different markets have different methods for it. But generally, I don't think we're going to we would not go into it thinking that we're going to take a lower margin to be able to make it happen. 2nd please. Yes. So two questions. I mean Paul you made the point early on, but quite rightly that you've been quite careful of rolling out the flavors. You have pushed the book now in another one. I just wonder whether you've got a better road map now thinking forward about how many flavors, how fast and whether you can talk a bit about that. And the second question was more around acquisitions. Just to be actually clear what you're saying because you have talked about Scotch and Irish before. You have also mentioned previously the categories like vodka. Is there a narrowing down of the focus here? Yes. I mean, I think the thing is, I mean, if you saw, we've seen some of the themes today from just being at the premium end. And the premium end of just to answer the second question, the premium end of the global whiskey opportunity, I mean, it's so attractive. I mean, the things that we would find to be attractive and maybe advisable for us aren't this other A word available. And so you can go through the mental math of how do we get there? What is it that would attract somebody to wanting to sell us their attractive brand in either the malted whiskey business or Scotch or Irish? And realistic thinking about innovation. And I think we gained inspiration a bit from the story we showed on Woodford Reserve that you can't control your own destiny more. So if you found the right spot for investing and you have a long view of it, it has to be meaningful. I mean, as you see the size of our company, they can't be these little bets. So nonetheless, we're going to look at both alternatives and see what the wisest way to enter the most attractive markets without taking our focus off our primary theme of today, which is American Whiskey and the continued development of the Jack trademark. On flavors, I mean, what I'd say is for as it relates to Jack Daniel's, I would say 2 is where we are. We know that the honey and cinnamon, at least in these early days of flavored whiskey, because people were not in a cold format already asking for American Whiskey or Jack Daniel's with honey or cinnamon. They were asking for it largely on ice with water, with citrus and primarily with Coca Cola. These open up new markets and new consuming occasions for the brand and I think have actually been very important to the low levels and almost absence in many instances of cannibalization because they became new ways, not convenient ways to consume existing drinks that were already offered by Jack Daniel's or by the category. So I think that was really important to it. Who knows where this thing might go? I do like I don't mean to imply either that every single possible way that a consumer might choose to drink our whiskeys, we would eventually go into some flavored version of it. I think that's where the vodka companies in some way got ahead of themselves. So for us, I mean, we still want Jack Daniel's to be diluted and mixed at times in cocktails and mixed drinks in the way that it historically has. And that is a far larger business than even our flavored whiskey businesses today. So I mean, I just I would say expect us to be conservative and thoughtful about it. Also, you should expect us to be articulate about it. So thank you for asking the question. Just make sure the microphone somebody have a mic? Yes, you have it on. There you are. Sorry, I lost you. You. So thank you for the data and the slides you shared. It's quite evident that you have a terrific business model and this management team has a great track record of execution. So Paul, as you're thinking about the long term strategy and growth, what are some of your key worries? What are some of the key risks you think about? Well, the ones that I think I mean, I'll let anybody up here talk about that age old question of if you're doing a SWOT, what are the threats that you would foresee? The 2 would show up for me that are more contemporary, one would be beyond the global macroeconomic stuff that all of us would deal with, That are unique are excise taxes. I mean, I just would say models that we see in particularly some of the larger countries, Australia comes to mind. These things can be really detrimental to companies and brands that have premium priced positions in the marketplace or in the category. So that's something I worry about. I wouldn't say I'm losing sleep over the legalization of marijuana, but I'm paying attention to it. I'll just say it that way. Others may have their own form of marketing. You do a lot of swatting around the world. So what are some of the things that have come up as worries or concerns that would be unique to either the company or the industry? Well, I think I would say that a very disruptive threat, I'll leave that alone, outside what we would be able to control as a corporation. But up in the sort of the weaknesses quadrant of our SWOT, we've had things Paul mentioned a couple. We'd be concerned if pricing wasn't available to us for the long term. This balance of volume and price that you hear a lot of us talk about And excise tax has an influence on that. Also as we we're only really 5 years into fixing infrastructure cost in key markets. And so this learning, we're cautious about the efficiency of fixed cost investment in markets and what you do when the growth curve slows. So in the sort of not very disruptive outside our control area, we're just paying attention to the fact that this is not a scale business, but yet we need to invest in infrastructure at a pace and with a potential flexibility that enables us to be reactive. John mentioned the South Africa story. What happens if we were invested in a market like South Africa and we were facing a slowdown and what would we do with our investment posture then? Lastly? Matt, I think, Stu, this is a business that has gone through cycles before and particularly those of you that followed Scotch business, I mean, they've had booms and busts many times over a 100 year period. So we're very sensitive to it. We look at it. We're actually pretty comfortable that supply and demand is in a pretty good place. But we know there's a lot of people building a lot of distilleries right now. And so what happens with that and what happens to pricing would be a real risk to our business. Now as I say, I think it's years before we really would see any there's so much supply coming on that's still got years before it's actually going to hit the market. And so it's not really a short term risk, but I think it's fair to say that we need to be conscious of keeping supply and demand in balance. Our risk registers organized around 2 primary buckets of the company. 1 is those things that would potentially threaten Jack Daniel's or our American Whiskey supply and those things that would threaten the demand. And so you can imagine that we would have risk mitigation efforts, everything from on the supply side, fire protection and things like that, that we've invested in over the years. And then demand, I just think it comes down to doing the jobs that we're paid to do, which is to run this business and these brands exceptionally well. And so we're trying to show to you today a lot of the ways we try to do that. Competition is always one of the potential derailers that occur for any company and any industry. But I don't know that we can and we would worry about smaller, I mean, literally some of these upstarts, particularly in the U. S. Today, but also larger companies, so our perspective will be broad there on competition. But I think competition keeps all of us on our toes. I mean, it really does. So we have to think anew and not misdiagnose or create ideas that we shouldn't create or make investments that we shouldn't make while making the right choices on that side. I mean, I think that's what we're tasked to do as managers and leaders, and so you should expect us to do that. You're welcome. Thanks for the question. Great. Thank you. Two questions. First, kind of big picture kind of theoretically, if a property in vodka like Tito's came on the market, is that something that you would seriously consider? Or would you just not even consider it very much given the category it's in, in a sense that vodka would dilute the overall quality of the business? And second question, can you give us a little bit more color on your business in China and India? Roughly how many cases you sell, how happy you are with your route to market and whether you're looking for other perhaps other avenues to increase your penetration and your potential in those markets. Maybe Jill, you want to hit on the opportunity, say, of a large at this stage, very U. S.-oriented vodka like Tito's. And Jane, you might supplement that as it relates to acquisition. And then Mark, you might hit on the trying to think of Boston, several of us could hit on the China, India thing. So I don't know that we would carte blanche just disregard a whole category. The interesting thing about Tito's for me is Tito's actually is resonating with consumers. The handcrafted message is bucking the trends of the rest of vodka. And so a brand that resonates with consumers that we think can do well in our hands we would look at it. But it would have to meet our typical criteria. And I think we're a bit more discerning because there's all kinds of case studies of where companies have gone out and made acquisitions and it's actually taken them backwards. So that would be the type of brand one that resonates with consumers that has a proposition that's premium priced that can grow well that I would be interested in the management team looking at and considering. Yes. And so just building on what she said, we would look at our criteria. It's not so much about the category. It's about the business and the brand. And so we would apply, get in there, look at it. Is it a good business? What kind of margins does it have? Kind of growth potential, what kind of returns we would apply those filter to it. And then can we create shareholder value in the end, is it advisable to us. And so I'd say and then one of the lead people that we're not looking at stuff, we do, but it's all about having a good business. It's a lot of things. Yes. I will say this. One of the difficulties today versus say 5 or 10 years ago for a company like Brown Forman looking at, in this case, an emerging brand and a very brand that's doing very well in this country, is whether or not we never would have thought that ourselves as being a big player in the spirits company. And it's part of the appeal of actually Tito's or any of these other sort of locally developed and growing brands is that they're not owned by companies like Brown Forman. And so we're seeing this in a number of other industries. And so you have to wonder and you want to be realistic about it when you go to being a perceived big corporate entity in American Spirits or whatever and going in and buying something small, do you actually diminish the value of it in the eyes of some consumers? And we're actually seeing some of that, it would be pretty big beer because they were ahead of spirits on this front. And then China and India? Well, let me say this that from a China and India point of view, we definitely see them as you would expect us to see them as significant long term opportunities for us. Today, the opportunity for our business in those markets is certainly not at the level of the opportunity that it might be in a number of other emerging markets that we're investing in. But specifically for China, both those countries exist on that green chart, the markets with more than 100,000 cases in them. But would we direct significant resource to accelerating that in any way? I would say no. We are growing in China. That's sort of unique at the moment. But And in India. And in India. Very much. And so we have certainly we have a number of ground foreman employees on the ground, local employees as well as other folk moving the business forward. But I think you know enough about China from everything else you've read about the category that it's a really slow build market. It's off on premise sorry. It's an on premise market for premium global spirits and it's bar by bar, nightclub by nightclub, very inefficient in terms of investment as opposed to other greater opportunities that we've got elsewhere in the emerging world that we've been able to show some examples of today. But their time will come for whiskey and brown formant in here and China will be significant businesses for us in generations to come without any question. I mean I'll just add. I think China is its own business strategy. I think what I find for virtually all the companies in our industry and certainly is for us, you see how we like to disproportionately derive rewards from lower outputs of risk. We have not yet found in China, not yet, that model that works. And it doesn't mean that we're going to be totally risk averse. Anytime you walk into these emerging markets today, you're going to carry a little bit more risk. But I also feel like that we're going to continue to be really thoughtful. It just doesn't mean throw caution to the wind. The big difference for us that I see maybe over the next 20 years is that the local market that will likely trade up, so that if you think about their palates, is great in India because it's a local brown spirits market. It's a very sizable local brown spirits market. Whereas in China, I mean, it's undeniable the opportunity and the size. Not only do they have to trade to Western spirits, but they also have to make a shift from their local spirit, which is a clear white spirit over to whiskey. We think both will happen. And frankly, you see these share numbers. In China, you do not need that much to have a just wonderful business. So we feel like we can play in both, but it won't be to the exclusion of this thing, it wouldn't even it never showed up on a slide today called Rest of World. When you are doing business in 170 countries like Jack Daniels is, I mean those smaller countries that are I love the slide that had all the 4,151,000 case markets, those add up to something and also spread the risk around. So we like that model, but we still have work to do to crack both of those countries at the level that we would like to crack them. Yes, Vivien? You got a little that is just next Vivien. Still here? On your acquisition strategy, you mentioned availability. In the Scotch and the Irish industries, they are incredibly concentrated. So the sort of brands that could be potentially out there are going to be relatively small. Would you ever consider taking your production expertise and building a distillery in Scotland and or Ireland and building your own because there are lots of start ups? Well, sure. You see a lot of people are actually love that's going on particularly and we've seen a number announced just in the last year in Ireland. And as we highlighted the Woodford model, in fact, that's what we did in Bourbon 20 years ago. So yes, that is absolutely an avenue. If you don't have availability through acquisition, that is an obvious arena for investment for the company. And it fits pretty nicely, quite honestly, with Brown Forman, who's going to have a longer horizon. And the multiples in this industry, you wonder sometimes, you won't know for a better part of a generation whether 20 times multiple or 20 years to build a Woodford reserve which was better and which carried more risk with it. So I will tell you that any of those that we do, they have to I think for our shareholders, all of you and the family, they need to have the prospect of being reasonably meaningful with the passage of time. We want something that's not just a toy, I mean, something that would really be a meaningful business operation. And I think this company's brand building and manufacturing capabilities really fit better with those categories than they might some others. And a follow-up on the chart you've looked up about the dark ages of whiskey in the United States. What do you learn from that and the rise of vodka when you look at other world markets where whiskey is pretty well established and there's an under established vodka market? Are there some key learnings from that some warning signs you need to keep your eyes out for? Want to hit on that? And some of these, how about those of you who've been spending time in markets that were heavily like Poland or a market like Mexico, anybody want to talk about those categories? They're actually shifting over from those large local markets to whiskey. So some of the fastest growing sub segments of their distilled spirits markets are the premium priced points premium price points in whiskey. I mean as it relates to American whiskey, I mean Jack Daniel's has largely developed it and it's still at such an early age. Could that occur as people move away from whiskey? I mean, you saw these share levels. I mean, the penetration is something like 2%. So it's hardly such a dominant share that I think that it would have enough consumerism to qualify, say, a fad that people might move away from. Anybody else? And John or anybody? The question is, can we switch the vodka markets over into some big vodka? No, we're worried about the whiskey market shifting over to vodka or cognac or gin or some of these other? No. We didn't go into a category review today. It's really interesting. I think the largest global category, most globally present is whiskey followed pretty far behind it is vodka. That's if you exclude the and I'm saying categories that exist in multitude of countries. Baijiu is very large, but is largely just in China. So GSM, you look like you were going to say? Yes. I think back to even when whiskey wasn't growing recall Jack was. So a brand like Jack was able to transcend. And one of our slogans is, we're not whiskey, we're Jack. We're not scotch, we're Jack. We're not scotch, we're Jack. And I mean it kind of cuts through. And so I think it's the strength of the brand that really matters. Good fair question. Put it on our risk register. Thank you. Two questions, please. The first on Woodford Reserve. Given the robust growth that you continue to put up in the United States, how much capacity do you really have to expand that brand geographically outside of the U. S? Because I think it's still like 85% in the U. S. We can run pretty hard. We were planning on this. So I think you were showing 30% -plus growth rates something like that right now. And so those are in our plans. It's about 80% U. S. 20 percent international right now. But yes, we I mean it's one of the benefits of having a long term view back when a lot of other companies were really cutting, we were really juicing up our distilleries 4, 5, 6 years ago. And so at Woodford at least. So we've added a lot of capacity in the last in the middle of it right now actually. And so yes, there's we've still got a pretty good runway ahead of us and a pretty we have plans for the kind of growth rates that we're seeing right now. I'll say this one thing, Jimmy, it's just really important. I mean, to play at the premium end and to be sourcing like if you just think of your whiskey market is not just American whiskey, but scotch. At the very high price levels, we have shorter aging horizons than our key competition. So and that we use with our whiskey manufacturers. The other one is our climate. But and that we use with our whiskey manufacturers. The other one is our climate. But we and we never used age as the defining metric for quality in American Whiskey. And I think we are benefiting from that hugely today because we can adjust on cycles of aging that are more like 4 to 7 and 8, whereas the people that are playing at our price point in scotch oftentimes built their brand on the basis of 12 years of age and higher. So they have less agility. You're starting to notice a lot of age statements coming off of super premium brands as a result. So they're moving a little bit more toward the American style of maturation and marketing. And my second question has to do with Southern Comfort. I mean, clearly, you guys have a very robust portfolio of American whiskeys and you're tapping new brands to help, capitalize on that growth. But where does Southern Comfort kind of fit into your longer term strategy in terms of driving American whiskey growth? Well, Lawson, you want to hit that? Yes. I mean, look, it's been tough. It is a very tough brand and we have put a lot of effort. We've changed up our mix many, many times in trying to find the right combination. It's actually in a better place today than it was. And with these it's just it's in under competitive siege and sort of being the original flavored whiskey and so many other brands are coming in to take its place. Having said all that, it still has a very strong franchise. It's still a very strong brand name. And one of the ideas is to take it more international and make it part of your flavored whiskey strategy. Is there a way to play that? It's tough. It's a very tough one to figure out how to do right now when we've got the Jack Daniel's flavors that we know and we have very high confidence in. Any kind of fixed decline. And so we feel a little bit better today than we did, say, 2, 3 years ago. We don't have a lot of we observe 1,000,000 case plus brown flavored brown spirit or flavored whiskey brands that exist. That brand continues to be one of them. And I would I think in my comments earlier, I talked about you can have a great business, which Southern Comfort, by the way, is an excellent business. It just it misses that second component, which is it hasn't been growing. And so if you're declining 3% per year, which it has been with all this flavored whiskey competition, much of which is coming from us. So this is part of the way we're thinking about it from a category. 97% each year are voting to stay with it. So we're losing 3% of it. It's still a good business. We wish we could get it growing. But I'll tell you, the company produces far greater results and returns from the growth of a drink of Tennessee Honey than it does Southern Comfort today. And that was in fact the beginnings of Tennessee Honey emerged as a defensive reflex to watching Southern Comfort being exposed to what was happening. So I'll get the microphone to you in just a minute. Thank you. So two questions. One is just around your pricing strategy. So this year, I think you decided to take a little bit more modest pricing. It looks like sales momentum has improved as a result. So when you think about the next couple of years, does it give you just more comfort around taking more pricing? And then the second question is in one of the white space opportunity that you alluded to was the high end flavor side. So is there actually a need or market or demand for that segment? Is this more of a long term opportunity? Or could we really see innovation in the high end flavor side? I'll share the stage. I mean, I think Lawson, it was you who referred to the sort of the flavor and price. And on the pricing, those of you who are closer to it, I mean, Michel or Jill, you for sure, I think your question may relate a little bit to the U. S. Momentum we've seen. So Jill, you might talk a bit about that. So we do a lot of extensive modeling that kind of helps us understand where we are positioned. The first thing I would say is with Jack, we want to stay premium. And we don't want to get to the point that we aren't taking price and we lose relevance. So we're always looking to maximize value. But of course, it's in the competitive context. And honestly, we had just outpaced our competition for a couple of years in a row and it was starting to show. So we looked around made some predictions on what competition would do knowing we are always going to go towards the direction of being premium and we increased our price. We'll always look to that balance. So if you think about the recession, when the great recession happened, we did pull back price. So we're going to do what we need to in the environment to maximize value to continue to grow. Thermal pricing? Yes. Anything on price? Yes. Anything on price? In France, we were able to we increased price every year. But of course, we negotiate some trade with the trade. So that means that we'll reinvest a little bit of a price increase the commercial terms. Nevertheless, the fact that one more time and going back to the same subject, it's a coal brand. So that mean that we don't have to invest or reinvest on top of the price increase too much in France. And in fact, right now we have the lowest level of promotion compared to the other competitors. So that means that we're able to increase price. We'll reinvest a little bit, but for the time being we're still in good condition. I got your question right. Your question around sort of higher priced labor extensions might play in that. I mean, to be honest, I'm a little hesitant to say too much because some of these things that are sort of in the works right now we're planning. But I'll give you an example of one right now that I think maybe something we can do with and it's the Jack Daniel's Gold 27. It's something that sort of sits in the middle between it is it's a double mellowed, double barreled product that has a slight tiny bit of flavor in it that we're charging $100 a bottle for something like that. So in that space, there is it likely wouldn't be cinnamon honey types of things. It might be something different, but there are other ways that we can play that game. And I'd even add on that is, flavor is a very broad category here. So you can talk about the grain flavor. So Woodford Reserve of course is playing in all kinds of that. We've announced we're making a Jack Daniel's rye whiskey that we will be bringing out in more volume in the next year or so, which is a different flavor of Jack Daniel's. And it will be at a higher price point than what Tennessee Honey is. So that would be an example that I would use. And when just not I work on Woodford, but just the Woodford Reserve Sonoma Cutere pinot noir finish, which if you get a chance to taste is brilliant. Okay, Matt. Has this little bit of sort of very subtle pinot noir wine note to it that we sell for, I don't know, dollars 75, dollars 80 a bottle or something like that. So $100 a bottle. So that's So to clarify, we're unlikely to lead the $50 a bottle, I'll call it, apple whiskey market. I mean, when we're talking here, we're talking more accents in the that you would see the super premium. And oftentimes, you've seen our expressions in this from many scotch companies who have cast finishes and things like that. So yes. Well, a follow-up to this question on Southern Comfort. I almost forgot you had this great portfolio of other brands. I guess maybe you're getting closer to changing the name of the company, maybe to Jack Daniels. But seriously, I just I was wondering, I was thinking putting my hat trying to put my hat on as another brand manager within the company trying to figure out what I have to do to and I see a within the organization do to try to compete for capital and attention? Within the organization do to try to compete for capital and attention with Jack at this point? And just to follow-up on that, some of these countries like France even where you have low single digit penetration rates in JAK, are people being incentivized to use JAK as a way to grow the rest of the portfolio? And to why is the Southern Comfort, for example, a big international brand at this point? Very good question. Thank you. I think maybe on the Southern Comfort one, there was maybe 2 angles. They're a little bit of an employee. Kirsten, you might touch on about just how we manage internally because it comes up like what do people want to work on? How do you motivate them? How do you incentivize them? So I mean, it's a very natural question when you own Jack Daniel's. So it's one thing. But also any of us could talk about what I'll call the other brands in our portfolio in some ways that we haven't talked about today, just to give you a little insight. Today, just so you'll know, it's not that we don't love those brands. We really we get so many questions, particularly the last 24 months, about the American Whiskey opportunity just because it's so hot. So we focus today. We love all our brands and we'll find opportunities to talk about them in a little more length at another time. But yes, go ahead. Okay. In the case of Brazil, we are definitely using Jack. We spoke about Jack quite a lot today because this was an American whiskey forum, so we didn't touch base on different things. But we're building a company that has a portfolio. We definitely invest in Jimador quite a bit. We have a great opportunity for tequilas there and we are growing substantially. We have propositions for Woodford Reserve. The rest of the portfolio has been really attended. And Jack is of course the one driving this whole thing and supporting and open doors etcetera. So in the case of Brazilians, I think we're working as much as possible whatever the portfolio that is of course geared to the market there. Michel, you're doing some of the same thing too, right? On that same front with your portfolio, how you just the last year, you've started to utilize the Jack Daniel's brand strength to introduce Woodford Reserve, etcetera? Absolutely. So obviously, we have 1 year life, yes? So that means that in pro form a. So that means that we were very much focused on Chey Daniel. But as you said, this year we launched the Vuforo Idave in France and the double expressions and extremely successful. And of course, we have the line the family of brand of OPTIX ENHEL. So Cinq Valloure for instance has been launched in France since 1999 in the 1st year. And it's a 2nd market after the U. S. Single barrel and we're also a gentleman jack. But on Woodford Reserve, it's amazing and interesting how this new American taste is taking over also in France. It's not only Jack. It's also this kind of new expression. And Kirsten on the internal side? In terms of how employees feel about working on other brands, if Jack Daniels was the only brand employees cared about at the company, anytime we had an opening on any other brand, we either would get no applicants from the outside and nobody on the inside would apply for those jobs either. And I can tell you that that is not true. That when we have openings on a number of brands, people want to come work either in the industry or for Brown Forman. In fact, a person who used to be working on the Jack Daniel's brand in the U. S. Is now leading our Herradura and El Jimador brands for the globe. And she doesn't feel like she got punished in moving from Jack to the Aquila's brand. So we all understand at Brown Forman, the power and importance of JAK, but have an incredible amount of pride for everything that is in our portfolio. We don't treat people who work on other brands or those other brands themselves with any less passion than we do our Jack Daniel's trademark. But it's a very I mean, it's an insightful question. I'll just say that because we wrestle with it all the time. And we will joke with each other that since the mid-50s, they'll say that the Jack Daniel's trademark, in some ways, staged a very friendly takeover of the Brown Forman Corporation from the inside. I guess because it just captures the hearts and minds of our global employee population so easily just as it does consuming. But it also sets a wonderfully high bar for investments, for incremental activities. That's why you see us very highly focused because we need things to be reasonably successful to be meaningful to Brown Forman Corporation because of the half bar that's defi jacked Amos. Well, I mean, we're trying to build incremental value. I mean, the thing that would have come into focus for us the last several years is that it needs to be of a larger size because when you're fortunate enough to own Jack Daniels, it is just a very large and profitable business. So you want other things. And I would give the example of Woodford Reserve today. When we break out the increments of our annualized growth, you'll start to see brands like Woodford Reserve jump up and be pretty meaningful. And we want other brands. We have what we call these processes where we're building what we call $1,000,000,000 businesses. And so we've asked ourselves and that's pretty exciting for an internal group of people to go work on to build a $1,000,000,000 valuation. And so on brands ranging from Woodford Reserve to Herradura, we've done it. We've actually started to think more about that possibility even on brands like Old Forester, maybe starting it a little lower than that. But just how it just stimulates the imagination to think bigger as it relates to the impact of the work and the ideas. So yes. For the record, I love all your brands too. You did good. I'll love them a lot in about 10 minutes. Yes. In the same glass. How about now? So just a quick question. Obviously, with Suntory buying Beam, I'm just curious from your perspective how that's changed the competitive environment or if it has at all what you've noticed in the marketplace with a foreign player owning Beam? Anybody? I mean it would be relevant where SunTour where Beam would be relevant in your market and a couple of the markets here, they're pretty small. John, you may have seen some of it lost and then Mark, you would have seen some of it. Well, if I may just jump in and then pass it over to you. In the case of Brazil, Bean could be relevant. They have a stronghold there with teachers moving 800,000 cases so they could have. But there's no movement so far. As far as American whiskey goes, I mean, we drive the whole thing. We have more than 90%. We are the category by definition. We want to keep it that way and keep it there on size. So we have seen no movement whatsoever. They have more people on the ground. Yes, they're establishing something there. But I don't see anything major happening in the near future. The only one I'd say is that and because we know Suntory pretty well, they were our partner in Japan for many, many years is they really weren't a big player outside of Japan. So where we would see it mostly is in Japan where they're a big player. And the Jim Beam business there. They have put a lot of time and energy and discounting behind that Jim Beam brand to grow share in Japan. So that would be the one area of their home market where they've really Volumetrically. Volumetrically gone after it with some, I'd say questionable things within that. And then even things like just announced a couple of weeks ago, bottling Jim Beam in India then, which because they have a little bit of a presence there. So those will be 2 countries I'd point out. But from the rest of it, Suntory as an entity outside of that really hasn't been they really just weren't a big factor. John, it's true that Jack Daniel's business, since the transition of Beam into Suntory and the announcement, we actually had a distribution change that occurred in advance of it. So we switched partners there. And our business from that point in time today is larger. So even though they've added to their business significantly through the model they're using, it has not come at our expense. Maybe I have time maybe just for one more question because everybody I'm getting thirsty. So as you look at the change with the RTC, clearly, it's giving you great benefits. Do you see that sustainable? That's the first question. And the second is, where do you see opportunities to get better control of that in other geographies throughout the world? I'll leave it to my regional colleagues here. I mean, I might have a couple, but I can think that you guys would probably have better insight into that. Michel, you just recently did one. Is there any other places around Europe or other things? And we've done it Germany and France over the last couple of years. I'm going to ask you, we are sustainable? Sustainable. Sustainable, yes. Yes, yes, yes. Yes, we are sustainable, yes, fortunately. Yes. So it's I would say it's a long journey. It was a long journey. And all these gentlemen and ladies on the stage of course were totally supportive and also gives the agreement. So now we are set and we say we are in good shape after 1 year. So we just finished 1 cycle because growth was January 9 last year. It's amazing how so it's very long, it's very complex, it's demanding a lot of energy, it's demanding a lot of everything. But nevertheless, we already get after a couple of months the benefit of having our own distribution And the leverage is there. The leverage is clearly there. And we were in France with a previous partner that was a good partner. So it's not changing for somebody bad to some from another organization. We were already with a partner that was good. But the leverage is there. We feel it already. It's not a screw because it's Nielsen. We can give these numbers. We can say Nielsen numbers. I mean Yeah sure. Yeah. For instance I got the last Nielsen yesterday and we are plus 14% this year. So that means that leverage is there for sure. And of course, it's opening more opportunity. And it's why we work now on 2 years, 3 years plan to be sure that we will get the benefits of this new organization. Yes. Mark? I would also I think the last the modern era, the last 10 years from a global point of view, we've really pushed that forward to the point where I think we said that about 80% of our net sales is now under what we would call reasonable influence or control. I think we're in a now a capabilities growth period in a number of these markets. You heard evidence that we've bought talent from some from the industry, some from competitors in the industry. But many of the new folk we've added to the Brown Forman world outside the U. S. Don't come from either our company or the industry. And so we're on this wonderful observing it is just so much fun watching us get better and better. So we've got Germany and Turkey 4 years in Brazil 4 or 5 years in France 1 year in and you can see the difference of 4 years of doing what we do versus 1 year of doing what we do. And plus 14 is great and it'll get even better as the experiences develop. Even though Mount MerxTrak, I mean, I think it was now 78, 22 was the split. So 22 doesn't leave that much. It depends upon I can't imagine though that in the next 10 years in some of these major markets that we just because the markets themselves change, I would even use the United States where privatization has occurred. So Brown Forman wasn't at the forefront of that, but we have to adjust our models for how we sell and market in those states when those occur. So themes that we might not when we think of RTC, we always think global RTC for Brown Forman. But I can't imagine that there won't be changing dynamics in some of these emerging markets around the world that have us think differently. Sometimes they'll have different partnerships. They won't always be about owning. I mean, I think it's a really important message. It's just maybe that it's just the best way for us to exert the right influence, particularly at the right cost and level of risk we like. But I do think, I mean, there I mean, each state is a significant business for Brown Forman in the United States when it adds up to 40% of Brown Forman. And so you have to think through if there's a lot of initiatives where these states change the way do business, we'll have to adjust ourselves. So those could be things that influence our route to market in the most established market for Brown Pharma. I think you all have concluded. I hope look, you'll have an opportunity. All this group and plus some others are going to be at the reception. So I take the opportunity to visit and ask questions that we didn't get to. I really appreciate you all sticking with us for the full afternoon. I mean, I don't have a lot of closing. This group did, I thought, a super job of explaining the Brown Forman opportunity and putting it on show for you here today.

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