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Brown-Forman Corporation (BF.B) has been making strategic initiatives to aid growth. The company has revealed a line of strategic efforts to poise it for growth in the versatile global spirits industry.
The strategic initiatives comprise the restructuring of the executive leadership team, reducing its global workforce and shutting the Louisville-based Brown-Forman Cooperage.
BF.B’s Latest Initiatives
The company looks to lower its global workforce by nearly 12% of its 5,400 employees worldwide in a bid to drive operational efficiency. However, BF.B will continue supporting the departing employees with comprehensive transition agreements that will include severance, outplacement services and benefits aiding the career change.
The company has reorganized its executive leadership team to aid growth across its brands, business and workforce, thereby streamlining its commercial structure to deliver synergies and effectiveness.
Jeremy Shepherd, who earlier led BF.B’s USA & Canada commercial division, has been named chief marketing officer. Michael Masick has been named president, Americas, hence continuing commercial leadership for Mexico, South and Central America and the Caribbean. He will further add USA & Canada to his remit. Yiannis Pafilis, presently leading teams in Europe, will further add Africa, the Asia Pacific region and global travel retail in his expanded role.
Such changes will simplify and streamline the company’s structure, hence becoming a more agile and efficient organization and reinvest in the capabilities, technologies, brands and people that will drive future growth.
More on BF.B’s Cooperage Closure
The company looks forward to shutting down its Louisville-based barrel-making operation, Brown-Forman Cooperage, by April 25 this year. This closure is likely to affect nearly 210 hourly and salaried employees forming part of the 12% workforce reduction.
We note that Brown-Forman will source barrels from an external supplier to consistently supply the top-quality barrels at reasonable prices.
Cumulatively, such actions are likely to generate nearly $70-$80 million in annualized cost savings, a part of which is projected to be reinvested to aid growth. Brown-Forman will also receive above $30 million in proceeds with respect to the sale of the cooperage assets. Management anticipates incurring about $60-$70 million in aggregate charges for severance and associated costs with respect to the workforce reduction and cooperage closing.
What Else to Know About Brown-Forman?
Brown-Forman is benefiting from its successful premiumization strategy and strong brand investments. Its premium and super-premium brands have supported performance for some time.