Jack Daniel’s maker Brown-Forman is slashing 12% of its workforce as more consumers cut back on their alcohol consumption, the company said Tuesday.
Louisville, Ky.-based Brown-Forman – a 155 year-old company which also makes Woodford Reserve, Old Forester and other spirits – is closing its barrel making operation by April 25.
The so-called Cooperage business employs 210 hourly and salaried employees, according to the company. Brown-Forman will now purchase its barrels from an outside supplier, the company said.
In all, the company said it is cutting 648 employees after the teetotaler trend caused the first drop in whisky sales – down 1.2% in 2023 – since 2002, according to a Wall Street Journal report.
“Todays announcement will ensure we have the structure and teams in place…while also making investments that we believe will facilitate growth for generations to come,” Brown Forman CEO Lawson Whiting said in a statement.
The layoffs are part of a restructuring, which elevated four key executives expanding their roles, including promoting Michael Masick to president of the Americas.
Masick had previously headed up the Mexico, South and Central America and Caribbean operations and now oversees the USA and Canada.
Brown-Forman’s shares ticked up less than 1%, to $35, on the news.
The cuts are projected to deliver approximately $70 to $80 million in annualized cost savings, a portion of which is expected to be reinvested to accelerate growth.
Brown-Forman also expects to sell its barrel business for $30 million and to spend between $60 and $70 million in aggregate charges for severance and related costs associated with the workforce reduction.
Overall alcohol consumption has been down since the pandemic, when sales soared as locked-down residents loaded up on spirits and wine.
Producers even introduced new larger bottles to meet the frothy demand.
But the tide has turned.
Alcohol stocks tumbled on Jan. 3 when the US surgeon general called for cancer warnings on the labels of alcoholic drinks.
Alcohol consumption increases the risk of developing breast, colon, liver and other cancers, US Surgeon General Vivek Murthy said in an advisory.
Murthy’s warning comes on the heels of another effort – a study ordered by Health and Human Services – that could revise the government’s dietary guidelines that have for decades recommended that adult males not consume more than two drinks a day and women no more than one drink a day.
The study was ordered after a WHO report concluded in 2023 that “no level of alcohol consumption is safe for our health” — the first such dire warning from the influential global nonprofit.
