Could two of the country’s largest spirit brands soon become one?
Brown-Forman, the parent company of iconic brands like Jack Daniel’s, Woodford Reserve, Chambord, Old Forester and more is reportedly exploring a merger with Sazerac Company, a spirits brand headquartered in New Orleans but with its principal offices in Louisville, Kentucky.
The news of the the potential merger comes two weeks after Brown-Forman confirmed that it was in talks with Pernod Ricard, a French spirits company that has a portfolio including Jefferson’s Bourbon and TX Whiskey, as well as Absolut vodka, Malibu rum, Seagram’s gin, Jameson Irish Whisky, Glenlivet scotch, and even Codigo 1530, the tequila brand co-owned by George Strait.
At the time, Brown-Forman said the talks with Pernod Ricard would be a “merger of equals,” but that there would be no further statement on the matter unless an agreement was reached:
“We note the recent market rumors regarding a potential business combination involving Brown-Forman and Pernod Ricard. Brown-Forman regularly explores and evaluates strategic opportunities, and can confirm it is engaged in discussions with Pernod Ricard.
If agreed and subject to customary approvals, this partnership would be akin to a merger of equals, drawing from the talent and expertise of both companies, and creating value for shareholders.”
While there hasn’t been any update on conversations with Pernod since then, the Wall Street Journal reported that a new player had entered the conversation, with Sazerac approaching the company to explore a potential merger.
Among its portfolio, Sazerac currently contains over 300 brands, including popular bourbon brands like Buffalo Trace, Eagle Rare, Weller and Pappy Van Winkle, as well as Chris Stapleton’s Traveller Whiskey, Peychaud’s bitters, Parrot Bay Rum, Southern Comfort, Goldschlager and Fireball.
The two companies are familiar with each other, having done business in the past when Sazerac acquired Southern Comfort and Tuaca brandy liqueur from Brown-Forman back in 2016 for $544 million. Both companies also have their main offices in Louisville, along with most of the bourbon industry.
It’s no secret that it’s been a tough couple years for the alcoholic beverage industry. Over the past couple years we’ve heard time and time again about how Americans are drinking less alcohol.
According to a recent Gallup poll, the percentage of Americans who drink has fallen to a record-low of 54%, down from 67% in 2022 and 62% in 2023. Among young adults, only 50% reported drinking alcohol, and for the first time a majority of all those surveyed reported their belief that even moderate drinking is bad for your health.
Even among those who still drink, the survey found that they were drinking less: The average number of drinks consumed in a week was 2.8, another record low and down nearly 50% from the 5.1 drinks per week reported in 2003.
Of course the trend also comes at a time when marijuana use has also been steadily increasing, with a 2024 study finding that 22.3% of Americans reported having used cannabis within the past year, up from around 11% in 2002.
The result of all this, as well as the tough economic conditions facing Americans these past couple years and decreased international demand due to the ongoing tariffs, has been that the booze industry has taken quite a hit.
Earlier this year, numbers from the Treasury Department showed that whiskey distillers had produced 28% less product than the same period last year, the lowest total since 2018. Brown-Forman reported sales were down 5% in the latest quarter and 4% for the year.
Last year, Brown-Forman closed its barrel-making operation in Louisville, a move that was expected to save between $70 and $80 million per year and resulted in the loss of 210 jobs. The company also underwent a corporate restructuring that would cut about 12% of its workforce, or about 5,400 jobs.
Now, as a longtime loyal Jack Daniel’s drinker myself, I think it’s safe to say I would much prefer Brown-Forman merge with Sazerac than Pernod Ricard. Sazerac is already headquartered in Louisville and has a deep portfolio of bourbons and whiskeys, and I would feel much more comfortable with my Old #7 being in their hands than to a French distiller.
Whatever happens, just maintain the quality and keep my glass full.
