The following article was originally sourced from the news piece “Family Spirits,” published on Kellogg’s News & Events page.
Board Chairman G. Garvin Brown IV and CEO Paul C. Varga of Brown-Forman, the family-first spirit and wine company best known for Jack Daniel’s Tennessee Whiskey accepted the Kellogg School of Management’s 2014 Family Enterprise Leadership Award in front of an audience of faculty, practitioners and students.
The Brown family originally brought in Varga as an intern at the company. He worked his way up the corporate ladder for 19 years before being named CEO of the previously family-led company in 2005.
“Typically that’s a situation that’s just ready for conflict of some kind,” said Professor Lloyd Shefsky, who founded and is co-director of the Center for Family Enterprises. “All of them were able to come together and say Paul’s the right guy.”
According to Shefsky, family-owned businesses represent a large part of the economy.
“They generate a majority of the GDP in the United States and 80 to 90 percent of the GDP in other countries,” Shefsky said. “They probably account for more jobs than any other sector other than government maybe.”
Longevity is something else that Brown-Forman’s exemplifies as one of the strengths family-owned businesses tend to possess, Shefsky said. The company has been in operation for 144 years.
“They tend to be long-lasting for a reason. They tend to be long-term thinkers — they’re not as concerned with the quarterly result as the quarter-century result,” Shefsky said.
The company does this by remaining fresh—not just by putting out refreshing beverages but also through the acquisition or creation of new product lines.
They add products that will preserve the core brand – like the new Jack Daniel’s Tennessee Honey in the American market or pre-mixed Jack Daniel’s and Cola popular in Australia – but avoid what they see as market blips like the flavored vodka trend of a few years back.
So next time you’re taking a sip from your Jack and Cola, know that it’s coming from a company that’s family first.
