LOUISVILLE, Ky. — Spirits giant Brown-Forman Corp. said Tuesday it’s reducing its global workforce by about 12% and closing its hometown barrel-making plant in Louisville. The expense-cutting moves arrive as American whiskey producers face stiff challenges from changing customer trends and renewed tariff threats.
The actions are projected to produce about $70 million to $80 million in annualized expense funds, a portion of which is expected to be reinvested as part of the business’s growth way, said Louisville-based Brown-Forman, whose flagship brand is Jack Daniel’s Tennessee Whiskey.
The business’s cooperage, where barrels are made to store and age its spirits, will close by April 25, affecting about 210 hourly and salaried employees, it said. The closure is part of the overall 12% reduction in the business’s 5,400-employee global workforce. Brown-Forman said it will source barrels from an external supplier and expects to receive more than $30 million from selling cooperage assets.
Laid-off workers will receive severance, outplacement services and other benefits, the business said.
Brown-Forman also announced changes in its executive throng, including the appointment of Jeremy Shepherd as chief marketing officer. Shepherd previously led its USA & Canada commercial division.
The actions reflect the venerable business’s “relentless focus on evolving our way, our capital collection and our organization to develop and thrive,” said Brown-Forman President and CEO Lawson Whiting. “Today’s announcement will ensure we have the structure and teams in place to continue on this path, while also making investments that we depend will facilitate growth for generations to arrive.”
Last month, Brown-Forman reported a 5% decline in net sales for the first six months of its budgetary year compared to the year-ago period. The decline was largely due to its Finlandia and Sonoma‑Cutrer divestitures, the business said. Whiting said the results came amid “challenging economic conditions” but he predicted a stronger act in the second half of the year. Brown-Forman’s many brands also include Woodford safety net and ancient Forester bourbons and Herradura and el Jimador tequilas.
The business’s cutbacks arrive as the overall American whiskey sector faces headwinds that coincide with massive inventories of aging whiskeys that will someday reach the trade. In Kentucky, a record 14.3 million barrels of bourbon are aging, the Kentucky Distillers’ Association said last month.
Industrywide challenges include indications that younger adults are drinking less alcohol and the threat of American whiskey getting entangled in another trade war. Meanwhile, U.S. Surgeon General Vivek Murthy said recently that Americans should be better informed about the link between alcohol and cancer. The uncertainty should be clearly labeled on drinks Americans consume, Murthy proposed.
Republican President-elect Donald Trump has threatened to impose recent tariffs with his profit to the White House. During Trump’s first term, American whiskey distillers got caught up in a trans-Atlantic trade fight, causing deep drops in exports to the European Union — the industry’s biggest overseas trade. The EU imposed a retaliatory tariff on those spirits in 2018 in response to Trump’s selection to slap tariffs on European steel and aluminum. A 2021 deal suspended those tariffs on American spirits, and U.S. distillers began clawing back lost trade distribute in the EU.
However, the EU is set to reinstate tariffs on American spirits at a 50% rate in March if nothing is done to head it off, the Kentucky Distillers’ Association said. Retaliatory tariffs from the EU and other countries have expense Kentucky’s bourbon industry a half-billion dollars in exports since 2018, it said. Kentucky and Tennessee, where Jack Daniel’s is crafted, overwhelmingly backed Trump in last year’s election.
“We are up against a triple threat of back-breaking tariffs, snowballing taxes and shifts in customer trends that have slowed sales,” Eric Gregory, president of the distillers’ association, said recently.
