How a Spirited Jack Daniel’s is Looking at Future Growth
Jack Daniel’s combines its 154-year-old flavor legacy with the latest technology to increase production as it expands its product line.
Using a tried-and-true recipe that combines Tennessee spring water, corn, rye, barley and time that has been unaltered since its founding, the Jack Daniel Distillery relies on a unique flavor legacy that continues to keep its products popular. Since 1866, Jack Daniel’s has been a steadily growing brand among whiskey enthusiasts as well as casual tasters.
“It’s currently the best-selling whiskey in the world,” says Larry Combs, senior vice president and general manager of Jack Daniel’s global supply chain. “We distribute [our products] to more than 170 countries around the world.”
Although its distilling process is still strongly rooted in the past, the company is looking toward the future by investing heavily in improving its plant operations. Jack Daniel’s Lynchburg-Tenn.-based headquarters recently completed a $52 million expansion which doubled the size of its existing facility to 450,000 square feet. This most recent facility upgrade is the last phase of a $200 million project.
Looking to expand its product line, the company took a critical look at its plant operations to determine where processes could be improved and capacity increased. From enlisting the knowledge of Jack Daniel’s highly engaged workforce to utilizing the latest technology enhancements, everything from its cooperage operation to its bottling and logistics programs were revamped. “We’re taking an industry that was living in the past and leading the charge on cutting-edge technology,” Combs notes.
“Our distilling process starts with the wood barrels,” Combs says. “[We believe] that the wood component is most important to the character of our products.” Jack Daniel’s whiskey is matured in white oak barrels that deliver its signature flavor profile. Sourced from local suppliers, the white oak staves are delivered to Jack Daniel’s own cooperage operations where they are processed into pieces and assembled into barrels.
Partnering with woodworking machinery maker Weinig, Jack Daniels sought to speed up its barrel-making processes, create a safer work environment and reduce waste. Using vision system technology operating at 400 feet per second, the company was able program its computer system to locate defects, such as cracks and mineral streaks, and relay that information to the computer-operated saws. The saws could then maximize the amount of useable wood.
Automating the material handling process not only created a safer work environment, it sped the production process and reduced waste by 20 percent. Still continuously monitored by its workers, technicians are able to intervene and correct any anomalies as they occur.
“It’s also improved on the quality of our barrels,” Combs notes. “This has allowed our plant to retain more of the product that was lost through evaporation, which we call the ‘angel’s share’.”
Although technology upgrades are a critical part of its new processes, Jack Daniels still relies on its team members to assess and provide input at critical junctures of production. “There are computer input stations at key spots that enable workers to share data to be included in analysis,” Combs explains. “This sharing system allows our software to analyze our process in real time. This, in turn, delivers data more quickly to team members allowing them to determine ways to reduce downtime.”
“One process involved the application of glue to hold a label in place,” Combs says. “A technician observed that the glue was no longer needed for the application, which eliminated a source of operational downtime and saved $300,000.”
Aside from its flagship product, Jack Daniel’s Old No. 7 whiskey, the company has been able to provide additional flavor profiles to inspire new consumers to sample its brand. Including Jack Daniel’s Gentleman Jack, Tennessee Honey, Tennessee Fire (blended with cinnamon), and new Tennessee Apple, these production upgrades allow Jack Daniel’s operations to be more nimble.
“We’ve had six to 10 line extensions in the past five years,” Combs says. “We’ve accelerated our production dramatically to include 1500 SKUs.”
“Our new operations allow us to increase production flow along with the flexibility to put in smaller runs,” Combs notes. “Once a customer places an order, we can schedule those runs most efficiently.” As a result, almost 30 percent its production is produced to order and shipped directly to its customers.
High-speed bottling lines, improved factory layout and warehouse management systems have also been instrumental in Jack Daniel’s production efforts. Combs claims that these improvements have decreased new product introduction times from 24 months to 12 months.
“We’ve made the time lines shorter and more reliable using both technology and our workforce,” Combs says. “We’ve set the stage for the next generation of Jack Daniel’s growth.”