Brown-Forman CEO Paul Varga said in an email message to employees Thursday morning that the company decided to sell the two brands because they are not expected to grow as quickly as its other brands, which include primarily whiskeys, such as Jack Daniel’s, and tequilas, such as Herradura.
Insider Louisville obtained the email to employees, in which Varga said the sale would cut 29 salaried positions in the United States, Europe and South Africa, and “some hourly positions” at the Louisville Bottling Operations.
Varga thanked those employees for their efforts and said the company would help them during the transition.
The company employs about 4,400 in 160 countries.
The sale, which is subject to regulatory approval, is expected to be completed by March 1. Brown-Forman had acquired the Southern Comfort brand in 1979 and Tuaca in 2002.
“Having presided over these, I can tell you with certainty that it’s more enjoyable to buy brands than it is to sell them, and I know that today’s announcement will be difficult for many across our company for a variety of understandable reasons,” Varga told employees.
Varga said the company would not completely replace the lost profits related to Southern Comfort and Tuaca brands by reducing operating expenses. Instead, the company will channel efforts behind those brands toward the products that are experiencing the best growth.
“In doing so, we will effectively be investing in our highest priority items at a time when opportunity, and the competition to seize it, abounds,” Varga wrote.
“We have enacted this same posture before, most notably in concert with the sale of our wine brands that allowed us to dedicate greater attention to brands like Jack Daniel’s Tennessee Honey and Woodford Reserve. The rewards from that reallocation have been evident in our results the last several years and this gives us confidence that a similar outcome can be achieved on this occasion.”
The American whiskey industry is seeing “excellent growth and strong consumer interest,” he added.
He described the recent investments of hundreds of millions of dollars to expand the company’s operations, especially in whiskey and barrel-making, as “once in a generation” and said that Brown-Forman would soon be able to enjoy the profits from those projects.
Officials for New Orleans-based Sazerac said they had nothing to add beyond what was in a news release, in which President and CEO Mark Brown said the company is “very excited about the opportunity to acquire such iconic brands” and is “looking forward to many more years of successful brand building.”