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Our Insights 19 Feb 2014

The Unusual Suspects: Rob Frederick, Brown-Forman

By Michael Sadowski

Rob Frederick is Vice President and Director of Corporate Responsibility at Brown-Forman, a global producer of spirits and wines including brands such as Jack Daniels, Finlandia, Herradura and Woodford Reserve. Prior to joining Brown-Forman, Rob helped define and implement sustainability strategy at Ford Motor Company.

Rob was a client of SustainAbility at Ford and continues to work with us at Brown-Forman. Michael Sadowski, VP at SustainAbility, leads this work and recently spoke with Rob to discuss his corporate experience to date and the most material issue for a spirits and wine company – responsible drinking.

Michael Sadowski: You were at Ford during the early days of its corporate responsibility (CR) efforts and helped start Brown-Forman’s CR program. How do you compare your experiences at Ford and Brown-Forman?

Rob Frederick: Both companies have a solid foundation of positive values—a history of doing the right thing. My role has been primarily architect and builder of CR strategy and initiatives, making the approach more deliberate and integrated. Both companies seek industry leadership; both are willing to experiment, even if new ideas don’t take. Each takes a comprehensive approach but focuses on its most significant societal impact – environment, in particular climate change, at Ford and alcohol responsibility at Brown-Forman.

Ford is much bigger and better known than Brown-Forman, particularly with consumers, so the motivation for change and leadership has been different at times. At Ford, we felt the external pressure, especially from environmental stakeholders—our early CR reports were front-page news and we regularly attracted the attention of activists. At Brown-Forman, we fly under the radar and have been more internally driven, although this is changing as we expand globally. We’re doing more to bring in outside perspectives through formal and informal stakeholder dialogues and forums such as ‘Our Thinking About Drinking’.

MS: It’s worth noting that both companies are publicly traded but family controlled. Do you think this form of ownership has mattered?

RF: Family-controlled, publicly traded companies of our size and longevity are relatively rare, and I’m convinced this ownership structure makes a difference. At the most basic level, company and family reputation are intertwined—their names are on the building. When Ford put it all on the line during their recent tough times, the family’s future was on the line as well. Bill Ford was instrumental in shifting the company toward sustainability leadership, as only the great-grandson of the founder could.

Similarly at Brown-Forman, the multi-generational perspective brought by the Brown family, six generations and counting, underpins the critical importance of being a highly engaged corporate citizen and community member. In addition to financial returns, the family is also interested in the company’s environmental, social and community dividends. To this end and as a complement to the company’s environmental efforts, we’ve recently created a foundation called DendriFund that is governed by family, company and independent directors with the purpose of advancing environmental sustainability. These are very different situations and intentions than you’ll find from Wall Street investors, and our CR efforts help strengthen the bond between family and company.

MS: Brown-Forman has rightfully emphasized alcohol responsibility in its CR efforts. How does Brown-Forman manage this issue across its brands and regions?

RF: All of the brands have had some level of involvement—from cause marketing campaigns to responsible drinking messages—but we really lead with Jack Daniels given its iconic status and influence. You’ll see many of our sales-led responsibility initiatives coming from Jack Daniels, but other brands like Southern Comfort, Korbel and Finlandia have delivered messages as well.

When I started with Brown-Forman in 2005, sales outside the US accounted for 40% of total revenue—today it’s 59%. In many countries, it’s still early days for the company, including our responsibility efforts. We’ve made our strongest strides in Europe, where we have a history of involvement in industry programs (e.g. Portman Group) and an active responsibility committee. We recently held a powerful Responsibility Live! Day for our employees in Poland. It included emotional moments around the issue of drunk driving, and reinforced excitement and energy around CR. We’ve also started to take a more global approach to our reporting by highlighting various activities and challenges in key markets. Drinking cultures and dynamics differ across countries so while we set an expectation and tone of responsibility from the corporate center, we also need to leave enough room for local adaptation and flexibility.

MS: Alcohol responsibility is a systemic challenge by nature. Brown-Forman might have the strongest responsible marketing practices, yet there are various reasons why people misuse alcohol. How are you working with others on alcohol responsibility?

RF: Much of the focus of alcohol industry critics is on marketing practices, and Brown-Forman has tight controls around content and placement of its advertising, but many other influences on irresponsible drinking exist. We’ve been on a steady path of building relationships with external individuals and organizations that know more about changing attitudes and behaviors or are closer to the point of purchase or consumption.

For example, we work closely with the TEAM Coalition – professional sports leagues, teams, media providers, beer companies and others—which aims to make sporting events safer and more responsible for fans. We have a deep partnership with The Ad Council who are experts in behavior change. We’ve been learning from their insights about drunk driving prevention and are helping to deliver the ‘Buzzed Driving is Drunk Driving’ message through our own communication channels. We’ve been having conversations with distributors and retailers looking for opportunities to join forces in bringing more effective messages to consumers like the largest US independent chain Total Wine & More. Together we’ve been able to raise awareness about drunk driving and educate customers about solutions such the designated driver service ‘BeMyDD’. Our data thus far tell us that consumers are receptive—these programs are good for addressing drunk driving and for our business.

MS: Where do you see the greatest challenge for the alcohol industry in the near future and where do you see opportunity and promise to have a positive impact as an industry?

RF: We face many challenges. The industry can either better self-regulate or face greater taxation and market restrictions. We need to get more of the industry aligned and moving in the right direction. That has begun to happen globally with the adoption of a set of commitments from the major spirits and beer producers. We need retailers to take a more active role since they interact directly with drinkers and local communities. We need to find more creative and meaningful ways to bring the concepts of responsible drinking to life with consumers. Heineken is doing a great job with this around their ‘Sunrise Belongs to the Moderate Drinker’ campaign.

We know intuitively that moderate drinking makes business sense: we’d rather have a responsible Jack Daniels drinker over the course of a lifetime than one who is irresponsible and has negative experiences with the brand over a much shorter timeframe.

The Unusual Suspects is a regular feature in our quarterly digital magazine Radar. It’s free to subscribe or you can download the latest issue.



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