Brown-Forman Corporation (BF.B - Free Report) has decided to invest $45 million in its cooperage located at MacLean Avenue in Louisville, KY, in order to manufacture high-quality barrels. In addition to giving the cooperage a facelift, the investment will help in lowering operating costs and enhancing efficiency.
As part of the modernization, the company plans to install new equipment that will ease the work of the Heading and Staving departments. This will attract elimination of 70 jobs after complete implementation in early 2019. Following the revamp, the facility will still hold 205 employees. The company plans to offer the affected employees transitional support.
Through this investment, the company will not only retain the competitive advantage producing its own barrels but also improve the long-term viability of the Louisville plant and minimize accidents.
Established in 1945, Brown-Forman’s cooperage crafts more than 2,500 barrels per day. In fact, the cooperage has been lending unique flavors to the company’s bourbon for more than 70 years now. It is used to age spirits like Jack Daniel’s, Woodford Reserve, Old Forester, Early Times, Canadian Mist, el Jimador and Herradura.
Apart from having a cooperage in Louisville, Brown-Forman also has a cooperage in Decatur, AL. Here, the company crafts barrels for its premium brand, Jack Daniel’s Tennessee Whiskey.
Brown-Forman looks appeasing backed by its sturdy portfolio, solid strategies and robust outlook for the year. This spirits maker is poised to gain from its industry growth trends as well.
Going forward, the company plans to expand Jack Daniel's market share in the developed markets as well as emerging markets, where the whiskey category is in the early stages of development. Additionally, it is on track to expand the sphere of other brands, alongside entering the fastest-growing spirit category, the Irish Whiskey.
Therefore, we believe Brown-Forman is well-positioned to gain from the ongoing industry trends driven by strength in its premium American whiskey and tequila brands, along with its Jack Daniel’s trademark.
Consequently, this Zacks Rank #2 (Buy) company’s shares have rallied 8.1% in the past month, outperforming the industry’s gain of 3.8%. Also, the stock boasts a Growth Score of B, which looks encouraging.
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Some other top-ranked stocks in the same industry include The Boston Beer Company, Inc. (SAM - Free Report) , Craft Brew Alliance, Inc. (BREW - Free Report) and Constellation Brands, Inc. (STZ - Free Report) .
Boston Beer has pulled off an average positive earnings surprise of 50% in the last four quarters. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Craft Brew, a Zacks Rank #1 stock, has delivered an impressive average positive earnings surprise of 222.7% in the trailing four quarters.
Constellation Brands has a long-term earnings growth rate of 18.2% and carries a Zacks Rank #2. Also, its earnings have outpaced the Zacks Consensus Estimate in each of the last four quarters by an average of 11.7%.
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