How Jack Daniels took over the world.

Last week I had the wonderful experience of touring the Jack Daniels' distillery in the small town of Lynchburg, Tennessee.

One can take a virtual tour of the distillery here, but it's nowhere near as good as the real thing, primarily because you can't smell anything online. The distillery is one of the more odiferous places I've visited. The barrel houses, distilling stills and mellowing warehouses smell of whiskey and white oak, and the whole place is overlaid with the scent of sour, fermenting mash, a porridge-like stew made from corn, rye, malted barley, yeast and water out of which the whiskey is distilled. The mash sounds icky but smells wonderful, like very yeasty bread.

At the heart of the distillery is the icy cave spring, which provides the low-iron, limestone-filtered water that feeds the whole operation. Also on site is a rickyard, where employees burn sugar maples to make the charcoal through which the whiskey will be filtered, and a small bottling operation where the premium Single Barrel brand is bottled and packed. The whole operation is peopled with bearded, beer-bellied, middle-aged Southern men who talk with a drawl and tell amusing yarns; despite its status as global giant, Jack Daniels feels pretty much like a family business.

Wandering around Lynchburg is also fun, because it's so clear that Jack Daniels is the town's raison d'être. Every store sells Jack merch - coffee with Jack Daniels, pecans roasted in sugar and Jack Daniels, Jack Daniels T-shirts, Jack Daniels barbeque sauce, Jack Daniels shot glasses.

The only Jack Daniels merchandise you can't buy is Jack Daniels itself, because among the more fascinating quirks of this little village is the fact that, despite housing America's biggest whiskey maker, Lynchburg is in a dry county.

Moore County, which houses Lynchburg, is ‘dry', which means that it is illegal to buy or sell alcohol within the county limits, although a recent exception was granted that allows the distillery to sell special, over-priced commemorative bottles of whiskey to tourists. You cannot, however, buy a bottle of plain old Jack, or any other alcoholic beverage at any of the town's little cafes and restaurants, a rather mind-bending experience.

Like the town and county it operates from, Jack Daniels is interesting. The company makes about 10m cases of whiskey a year, exports to some 130 countries around the world, and generates half of the profits of parent liquor conglomerate Brown Forman (around $800m in 2009), yet it operates out of the same 9-acre distillery it's (more or less continuously) called home since the 1860s and directly employs only around 400 people. The company survived the Prohibition, the Great Depression, and the implementation of a federal liquor tax regime, which employees still seem to resent, to become America's number one whiskey maker and exporter, all this from the single distillery in Lynchburg.

Incidentally, according to my tour guide, South Africa is the company's seventh-largest export market, which made me proud, considering South Africa is only 26^th in the world by population - clearly South African drinkers are working hard to make up in per capita terms what we lack in absolute numbers.

So how does a small whiskey company, located in a county that prohibits the sale of alcohol, become such a dominant global player? My tour guide told me that the reason is the quality of the product, but of course it's more than that (although the quality, especially of the Single Barrel, isn't bad).

One of the main drivers of Jack Daniels' success is its powerful brand. Through many decades of advertising campaigns the company has fostered a brand image as an authentic, American product, with a long history and venerable tradition. A lot of the clothing associated with the brand, for example, is vintage-styled, tapping into people's nostalgia, and most Jack Daniels advertising focuses on telling the story of the company and emphasizing its traditional distilling process and old-fashioned values.

This brand is supported by sophisticated distribution networks and highly efficient production - for all its old-school styling, the Jack Daniels distillery has embraced modern efficiencies like computerized monitoring facilities, automated bottling and so on - but the heart of the company is definitely its very American brand.

This fact points to the key competitive advantage of contemporary American businesses: the sophistication of American marketing and brand-building. America literally invented modern advertising, public relations and branding, and it remains leaps and bounds ahead of everyone else in its ability to create powerful and well-loved global brands.

According to the 2009 Interbrand Best Global Brands survey, eight of the world's top ten brands, sixteen of its top twenty-five brands, and fifty-one of its top one hundred brands, are American. This dominance of the high-value business of branding is one of America's core advantages. Most of what GE, Intel, HP and Gillette make is produced outside America, but the real money still goes to the USA. A razor worth around 15USC in terms of its raw utility is worth $5 when it's a Gillette, and this alchemy is what has underpinned America's phenomenal economic success.

This alchemy turns sugar, caramel and CO₂ into valuable Coke, rye, barley and corn into valuable Jack Daniels and plastic, rubber and cotton into expensive Nike running shoes. It's the top of the value chain in modern business, and tellingly none of the emerging BRIC economies - Brazil, Russia, India and China - have brands in the top 100 yet.

If those economies are going to truly evolve into powerhouses, eventually they too will need to learn the magic of turning dross into gold, or at least mash into an American icon.

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Pride It's with great pride to see what we have achieved here!!!!! 7th largest market; fantastic stuff! What a product!! by Ben on March 11 2010, 22:03 Find this comment inappropriate? Report it

Good article Rock 'n Roll Juice! by DoorKnob on March 11 2010, 23:45 Find this comment inappropriate? Report it

Spell me right PLEASE! The name is Jack Daniel's ! Apostrophe 's' : had enough time to read many a label! by jack attack on March 12 2010, 00:08 Find this comment inappropriate? Report it

If SAB owned it, it would be mechanized and employ just 10 people!!!!!!! Old is good because it often has a social conscience... by GungetsTuft on March 12 2010, 00:15 Find this comment inappropriate? Report it

Something to be proud of???? South Africa's excessive comsumption of Jack Daniels is sad. Alcohol is a great social evil. I'm no prohibitionist (unlike the couintry of Lynchburg), but given the harm caused by drink, I think your joy is seriously misplaced. by Gf on March 12 2010, 00:19 Find this comment inappropriate? Report it

This side of the Atlantic. You think you know Jack? Eish.. You aint seen nothing yet! by Jack on March 12 2010, 00:21 Find this comment inappropriate? Report it

Useful info, good insights. More of these please. Write less often, but make it count. by Johannes Jordaan on March 12 2010, 00:24 Find this comment inappropriate? Report it

aka John to friends Col Slater from Scent of a Woman by John on March 12 2010, 00:24 Find this comment inappropriate? Report it

Thanks F thanks F for this article. You really put some warmth into the brand. Will look with different eyes at bottle Jack now. But to think about it, they are good brand builders. Here you have just added to the value of the brand without them needed to . .more pay for it :) . .less by Confucius on March 12 2010, 00:29 Find this comment inappropriate? Report it

Julius Malema drinks Jack Daniel's.... that explains why we are 7th export market by of all trades on March 12 2010, 00:57 Find this comment inappropriate? Report it

Jack Schitt :( More proof unfortunately of how great marketing and brand buidling gets millions of folks worldwide to buy a significantly inferior product (see also Microsoft!) - i'm guessing that even the cognoscenti drink it for effect, not taste!! by Dilligaff'd on March 12 2010, 01:04 Find this comment inappropriate? Report it

Photo Updated photo please by Piet Pimples on March 12 2010, 01:34 Find this comment inappropriate? Report it

Long live JD Hopefully SAB will never get their hands on the Jack brands. I know the word strike does not exist in their vocab of this tenessee factory. Therefore the successful product and culture. We'll see if some of the local brands survive the SA recession! by Father JACK on March 12 2010, 02:22 Find this comment inappropriate? Report it

Such a well known brand that the author gets the name wrong ... .... the man's name was Jack Daniel, hence the product is called Jack Daniel's. I suppose if you drink enough of that urine though, that's the sort of mistake you're bound to make. by Paddy on March 12 2010, 02:24 Find this comment inappropriate? Report it

Puke-o-rama Every time I have a suitcase I vomit. That Jacky D sure is some horrible booze! by donovan on March 12 2010, 03:00 Find this comment inappropriate? Report it

DIFFERENT Great to read something different for a change. Pitty our news headlines and front pages could not feature similar positive articles. Who wants to know the doings of jm anyway ? by Archibald on March 12 2010, 03:28 Find this comment inappropriate? Report it

Interesting article After this article perhaps we will go up to sixth, stop working and start drinking hard. heh heh by ea on March 12 2010, 05:05 Find this comment inappropriate? Report it

jack daniel's Thank you, Felicity, nice article. Just ignore the negative comments-they would be bitter at the Pearl Gates. by erewhon on March 12 2010, 05:38 Find this comment inappropriate? Report it

Wouldn't we all like to visit Felicity's "odiferous places"? Nice article F. Keep 'em coming. by Hmmm on March 12 2010, 05:49 Find this comment inappropriate? Report it

lekker articel klippies has a way to go, but rooibos on the other hand... by oznob on March 12 2010, 07:25 Find this comment inappropriate? Report it

@Hmmmm You're a foul person. by Renter on March 12 2010, 08:22 Find this comment inappropriate? Report it

And yet the US cannot do it in the auto industry today. Overtaken by the Japanese and Europeans This fact points to the key competitive advantage of contemporary American businesses: the sophistication of American marketing and brand-building. America literally invented modern advertising, public relations and branding, and it remains leaps . .more and bounds ahead of everyone else in its ability to create powerful and well-loved global brands. . .less by Henry Ford on March 12 2010, 08:56 Find this comment inappropriate? Report it

UNCLE JACK Uncle Jack has helped me in many a situation and was also the resolution in a tie breaker business deal. Uncle jack thanks fot the good times and thanks for helping me though the rough times. Excellent article how about some other breweries as well. . .more GF i think drink has helped more than done damage! . .less by BART on March 12 2010, 11:56 Find this comment inappropriate? Report it

You are right - you know Jack Any plans to visit brand Elvis? by Jim Beam on March 12 2010, 12:20 Find this comment inappropriate? Report it

Good Article Brings back memories of my visit to the distillery, nothing like the smell of the whiskey as it gets dripped through the sugar maple charcoal, the rich vanilla / caramel smell and not a drop to drink :( The plant itself is surprisingly . .more small considering the volume they produce. . .less by Justin on March 13 2010, 08:26 Find this comment inappropriate? Report it

Jack Daniels the next best thing to lighter fuel Did Felicity want an Oscar for going through that smelly distillery??? by rota roota on March 13 2010, 09:33 Find this comment inappropriate? Report it

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Bring this ancient business to SA Put in your BEEE cadres and see if it lasts 6 months. by Dave on March 15 2010, 12:40 Find this comment inappropriate? Report it

jack tastes like orange-peachy soap... by nic on March 16 2010, 03:40 Find this comment inappropriate? Report it

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