Simply put, everyone has a favorite drink. Combinations of tequila, whiskey, rum, gin, and bourbon make for fun and (un)forgettable nights. Whether you're a fan of cheap, fruit flavored vodka, or you prefer exquisitely aged cognac, few people actually know about the companies behind their favorite alcohol brands. In fact, many believe that most alcohols are owned by the brands they represent; or that different drinks comprise individual, private firms. Indeed, nothing could be further from the truth. In reality, only a few massive beverage conglomerates bottle and distribute your favorite spirits and liqueurs.
Similar to how PepsiCo (PEP) owns 7up, Mountain Dew, Sierra Mist, and many other sugary beverages, alcohol brands contain many subsidiary units. The only difference being they aren't traditional, household names. One such company goes by Brown-Forman (BF-B). Headquartered in Kentucky, Brown-Forman is the proud owner of spirits like Southern Comfort, Jack Daniels, and Woodford Reserve; it is also the proud distributor of America's cheapest champagne: Korbel. Brown-Forman's alcohol portfolio covers all types of drinkers: from casual to party animal, Brown-Forman has your back. Furthermore, the company also recently expanded its portfolio by purchasing Slane Castle Irish Whiskey for $50 million.
Another likable aspect of Brown-Forman, which might appeal to Millenials but not investors, is its green footprint. Brown-Forman is an incredibly environmentally friendly firm. In fact, in years prior, Newsweek has ranked Brown-Forman as one of America's greenest beverage companies. As such, it is amongst powerhouses like Coca-Cola Enterprises and The Coca-Cola Company (KO). In general, out of 500 companies, Newsweek ranked Brown-Forman the 63rd cleanest company of 2009.
Equally admirable is Brown-Forman's pursuit for perfection. We all know one must spend money to make money, and Brown-Forman doesn't shy away from expenses. In addition to its Irish whiskey acquisition, Brown-Forman also recently spent $12 million on a whiskey barrel facility in Indiana. With Jack Daniels being one of its most popular products, Brown-Forman has increased its operational capacity by purchasing additional manufacturing space. The company also received $350,000 in conditional tax credits from Indiana as an incentive to add local jobs.
With these many factors in play, and given alcohol's popularity, Brown-Forman could prove a lucrative investment for young traders. Warren Buffet favors simple investing strategies, like investing in things you understand and appreciate. As a college student I can say that, while many young adults may not know they're consuming Brown-Forman products, they sure as heck love, and keep buying, them.