Whiskey distiller Brown-Forman said the rising cost of white oak for its whiskey barrels has cut into profits. With one of the most advanced barrel making plants in the world, the company is still running into a shortage of oak barrels as its Jack Daniel's and other whiskey and bourbon lines production rises.
During its first quarter earnings report this week, Jane Morreau, Brown-Forma Chief Financial Officer, said, "We had cost pressures from wood. I think I talked about this in the fourth quarter, just given the supply demand constraints there in the cost of wood. So, we expect that to abate over the balance of the year and our costs are coming down."
Cutting white oak staves consistently and automating the production of barrels is profiled in this slide show.
Instilling automation to a traditionally a handcrafted operation earned Jack Daniel’s Cooperage the 2014 Wooden Globe for Innovator of the Year by the Woodworking Machinery Industry Association. Brown-Forman is the only major distiller in the world that owns and manufactures its own barrels The Jack Daniel’s Cooperage makes white oak barrels for maturing Jack Daniel’s, Early Times, Old Forester and Woodford Reserve.
Larry Combs, senior vice president/general manager for the cooperage operation, says about half of the flavor and all of the color observed in a bourbon or Tennessee whiskey comes from the wood, making the control of that supply and quality critically important.
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