Brown-Forman: Supply Chain Costs Pinch Margins, Demand Strength Leaves Investors in High Spirits

Brown-Forman has established itself as a stalwart in matured spirits, an enclave of the distillation industry that we view as particularly attractive. In addition to brand recognition and distribution, companies in this industry benefit from scarcity value, the result of the consumer perception surrounding the aging of this type of alcohol and the pricing power that this begets. Against this industry backdrop, we believe Brown-Forman’s portfolio, anchored by the Jack Daniel’s brand, boasts some of the highest cachet globally.