Jack Daniel's International Appeal

By sticking to its homespun, down-home story, the Tennessee sour mash whiskey has increased sales at home and abroad

by David Kiley

Jack Daniel's ad from Bulgaria.

Jack Daniel's ad from China.

Jack Daniel's ad from Russia.

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For Pok Rui Bin, 29, drinking Jack Daniel's Old No. 7 after 12-hour workdays in Beijing means mixing it with green tea. The advertising copywriter's cocktail of choice is just one of many regional recipes that Global Managing Director Mike Keyes is getting used to now that his brand is available in 135 countries. What appeals to Pok about the Tennessee whiskey, he says, is the smooth smoky flavor, "and how it's hand-crafted and all comes from this one special place…I love that American West stuff."

Allowances can be made for Pok's poor sense of direction, and for the green tea mixer, since he's never been to the U.S. But he has been to the Jack Daniel's Web site, which is translated into 14 languages. The lifting of trade barriers in several countries, a weakening U.S. dollar, and the spread of cocktail culture to cities such as Beijing, Sofia, Moscow, and New Delhi have been pushing the whiskey brand's export sales by double digits. And though several brands closely identified with America—like Marlboro (MO), Starbucks (SBUX), McDonald's (MCD), and American Express (AXP)—have been lightning rods for anti-U.S. sentiment overseas, American whiskey has remained so immune that parent company Brown-Forman (BFB) expects to sell more than 4.8 million cases abroad next year, marking the first time since its founding in 1866 that more Old No. 7 will be poured abroad than in the U.S.

Overseas Whiskey Lovers

After losing favor and showing almost no growth in the 1980s and into the 90s, whiskey sales, especially of premium and superpremium whiskeys, have been steadily climbing in the U.S.—at the expense of cheaper brands and beer. The drinking tastes of Generations X and Y are proving to be different from those of baby boomers. And that trend is found abroad, too. In Moscow, for example, bar managers say that the younger nightclub set increasingly prefers American whiskey to vodka or the more familiar Scotch whisky.

Pavel Kamakin, bar manager of the Moscow nightclub 16 Tonn, hosted a Jack Daniel's birthday concert and party earlier this month as part of a promotion by the local distributor. Kamakin says Jack is a close second in popularity to Jameson Irish Whiskey. And, he adds, customers who plan to drink a lot like those brands for their smoothness over the "hotter" Scotch whisky and ubiquitous vodka. Jack Daniel's sales are up 41% from five years ago, to 45,000 cases.

In general, overseas markets have been good to all American whiskey. Fortune Brands' (FO) Jim Beam Kentucky Bourbon, Jack Daniel's nearest rival, saw global sales reach nearly 6 million cases, with 45% of that consumed abroad. Fortune's Maker's Mark premium bourbon has shown double-digit growth for 13 straight years, with a growing following outside the U.S. But Jack Daniel's is the first major brand to become a majority exporter.

A Strong Brand Story

While a weak dollar has helped, overseas pricing still makes Jack Daniel's a premium pour, especially compared with local brands. A key growth feeder is "the consistency of the brand's story," as reflected in Jack Daniel's marketing of its small-town roots, says Allyson Stewart-Allen, a director of International Marketing Partners, who studies international brand performance. That, says, Stewart-Allen, is also one of the reasons Jack Daniel's has ducked overseas backlash against brands that are overtly American: "Jack Daniel's is less likely to experience boycotting from overseas markets because of the way it has played on the values of craftsmanship and intimacy via its use of small-town America visuals, in other words, the heartland of the U.S."