The whiskey producer Jack Daniel’s Tennessee Whiskey, Brown-Forman Corporation, has rolled out a strategic restructuring plan to enhance productivity and well positioning for growth. The aim is to prepare the company for expansion in the discovery spirits industry and has therefore initiated plans to close down its Louisville based cooperage in scope to reduce the global workforce by around 648 positions.
The reason for closing the cooperage extension plant is barrel production. It is projected to impact about 210 employees, however almost all of them will be equipped with comprehensive support and packages for benefits. Benefits will include severance packages, outplacement services, and aided transition services.
Brown-Forman seeks to enhance market effectiveness and growth through the executive restructuring of the leadership team. Appointments include: CMO Jeremy Shepherd, President of the Americas Michael Masick, President of Europe, Africa, and Asia Pacific Yiannis Pafilis. The executive team will also expand with the addition of Chief Strategy Officer Chris Graven.
Cost saving strategies are being put in place and these may potentially save up to 70 to 80 million dollars, however, the company expects to incur one time severance costs amounting to 60 to 70 million USD as well.
In the spirit market, as whiskey sales slump, customer alcohol consumption dips while economic inflation pushes brand switches, many businesses like Brown- Forman are attempting restructuring for survival.
The agencys long term growth strategy however is still firmly in place. Some of the funds saved here will be funnelled back into new technologies, brands and recruitment. Simplifying the company hierarchy will also increase the firm’s response to demand changes. These moves will allow Brown Forman to navigate these changes better.
In order to stay competitive in the global spirits market, it was crucial to make these strategic choices as Brown Forman celebrates 155 years. The firm is aware of how the restructuring will impact the employees and is working to ensure that there is minimal disruption for them.