Brown-Forman ends deal with Wray & Nephew

[Edward Hamilton]

Brown-Forman Sales and Marketing Agreements with Wray & Nephew and Distell to End
Mon Jan 7, 2008
Source: Reuters
Brown-Forman Corporation (NYSE:BFB) (NYSE:BFA) announced today that its U.S. agreement with Wray & Nephew Group Limited of Jamaica and its agreement with Distell Group Limited of South Africa will be ending. The decisions are unrelated and conclude six-year marketing relationships between Brown-Forman and the two separate companies.
In the U.S. agreement with Wray & Nephew, Brown-Forman has marketed and sold Appleton, Wray & Nephew, and Coruba rums since October, 2001. Brown-Forman and Wray & Nephew have grown the total range of rums in the U.S. from annual sales of 96,500 nine-liter cases in 2001 to approximately 180,000 cases in 2007. The strategic marketing focus on the premium Appleton Estate range yielded growth from under 20,000 cases in 2001 to a current annual total of over 50,000 nine-liter cases.
Brown-Forman will represent Wray & Nephew brands through April, 2008 or until Wray & Nephew reaches agreement with a new importing partner.
Under the agreement with Distell, Brown-Forman has marketed and sold Amarula cream liqueur and Durbanville Hills wines in the U.S. and the Caribbean, and Durbanville Hills wines in the United Kingdom.
Distell and Brown-Forman introduced Amarula in the U.S. in October, 2001 and the brand has grown each fiscal year since then.
Beginning March 1, 2008 Amarula and Durbanville Hills wines will be distributed in the United States by A.V. Brands, based in Columbia, Maryland.
"We are proud of the growth of the Appleton rum brands under Brown-Forman's stewardship and of our accomplishments on Amarula cream liqueur over the last six years. We feel that each of the brands is stronger today then when we began our work, and also believe they are positioned well for further development," stated Paul Varga, Brown-Forman Chief Executive Officer. "We wish both Wray & Nephew and Distell well in their future efforts and thank our employees and distributor partners for their excellent work on behalf of these brands," added Varga.
Wray & Nephew is Jamaica's leading producer and marketer of premium rums.
Distell is South Africa's leading producer and marketer of fine wines, spirits, ciders and ready-to-drinks (RTDs).

[eas]

Curious that W&N doesn't have a replacement importer assigned.

[RumBarPhilly]

I had this bar guest who "banned" appleton rums. They were very upset with Jack Daniels marketing strategy in reducing strength from 90 proof, to 86 proof, to 80 proof without ever lowering prices. Their ban was Brown-Forman related, as they didnt drink woodford reserve, chambord, herradura, or any of the other products.

This made for interesting small talk months ago. They banned appleton back when they were bought. I guess the world now has two more Appleton drinkers again!

[Edward Hamilton]

My guess, and this is only a guess, that Appleton has more than a couple of suitors. Angostura wants Appleton, unfortunately, they have never been able to do much in the US with their rums, but maybe with Appleton, it will give them some traction.

[Edward Hamilton]

J. Wray & Nephew cutting ties with US company
Source: Radio Jamaica
Tuesday, 08 January 2008
J. Wray & Nephew Limited has announced that it will be ending its marketing agreement with Brown-Forman Corporation in the United States, (US). Under the agreement, Brown Forman marketed and sold J. Wray & Nephew's premium rums in the US.
Managing Director of Lascelles deMercado, Wray and Nephew's parent company, William McConnell says the conclusion of the agreement does not signal any intention to consolidate the company's arrangements in the US with those of Angostura Limited.
Angostura recently made an offer to purchase Lascelles' ordinary stocks.
Brown Forman will represent Wray and Nephew's brands, until April or until an agreement is reached with a new import partner.

[RumBarPhilly]

Looks like its time to stock up just in case

[Edward Hamilton]

I'd approach this by buying extra cases of some of your favorites, I doubt distribution will suffer in the long term, but there could be some shortages in the distribution pipeline in the short term. If a distributor thinks they're going to loose the brand they might be reluctant to take on enough stock to keep your customers happy.

On the other hand, I'm confident Appleton rums aren't going to disappear entirely.

[RumBarPhilly]

Capital Wine and Spirits of Pennsylvania is cutting all ties with Appleton. Its bizarre, as that was their number one rum that they pushed through me (even with Bacardi, Mt Gay, and GOslings in their portfolio). Ive been "asked" to change off some appleton cocktails on my menu, as they did pay for the printing.

Its sad too, because the area manager was selling me 6 bottles of Appleton 21 at cost (Approx. $75/each) and now I doubt thatll happen.

I feel Brown-Forman did a wonderful job promoting the Appleton line of rums and I can only hope that whoever steps in will continue, which Im sure they will.

Is it possible for a giant like Bacardi to buy Appleton only to dismantle it as they could pose a threat? I know its not ethical, but it could happen, right?

[Dood]

Is it possible for a giant like Bacardi to buy Appleton only to dismantle it as they could pose a threat? I know its not ethical, but it could happen, right?

I don't see why not. It's happened before in other markets, and I'm sure it's happened with spirits as well.

[Edward Hamilton]

Printing menus to complement product placements from a distributor's portfolio is a common perk for bar managers/owners which is illegal, but impossible to prove, in several US states. It's always interesting when the portfolio changes, then the distributor wants to print new menus featuring other products.

Product loyalty, without regard to quality, is a fickle business.

[Edward Hamilton]

Brown-Forman details Distell, Wray & Nephew wrap-ups
9 January 2008
Source: just-drinks
Brown-Forman has moved to clarify the recent announcement that it is terminating two marketing agreements in the US.

The company confirmed yesterday (8 January) that its collaborations with Wray & Nephew and Distell Group in the country are both set to end in the first half of this year.
Speaking to just-drinks today, a spokesperson for Brown-Forman detailed what had prompted the moves.

"The decision to terminate the Distell agreement was ours," the spokesperson said. "We began distributing (Distell's liqueur brand) Amarula in the US in 2001. Since then, we have acquired two brands - Tuaca and Chambord - which compete directly with Distell in the premium liqueur category. It made sense for us to focus on these brands, allowing Distell the opportunity to find a partner that can give Amarula clearer focus."

Regarding the closure of the Wray & Nephew deal, however, the spokesperson conceded that this had not been Brown-Forman's decision. "Late last year, Angostura said that they were in talks to buy (Wray & Nephew's parent company) Lascelles deMercado and Co.," the spokesperson said. "When we heard about this, we saw the handwriting on the wall. They (Wray & Nephew) told us that they wanted to terminate our agreement, which is in keeping when a company gets bought by someone like Angostura."

Yesterday, Wray & Nephew was at pains to point out that the move away from Brown-Forman did not indicate an immediate tie-up with Angostura in the US. Brown-Forman's move "does not signal any intention to consolidate J. Wray & Nephew's arrangements in the US with those of Angostura", Lascelles said.
The marketing relationships, both of which had run for six years, will end in March for Distell, and in April for Wray & Nephew.

[eas]

sounds like smoke and mirrors, or just a failure to communicate. either way a sub-optimal outcome (if for the moment).

[RumBarPhilly]

Its hard work to balance integrity and pride with money and greed.

I try my best, ive refused many offers by distributors to push products that went against my will. Of course, when I needed somebody to pay for some new menu books, I decided to have the company that had the best and most rums available, so my menu is still diverse with rums. (Theyve got Bacardi, Mt Gay, Goslings, Rhum Clement, Leblon, and had Appleton)

Believe it or not, I had one rep try to cooerce me to add on all the Malibu Flavors and list them all on our bottle service list.

The drinks Im most proud of that I created are the ones that I wasnt forced into putting on, like our Oronoco Mojito, Painkillers, and my own Mai Tai recipe (which is much improved after a few words of wisdom from some)