Analysis of Brown-Forman's Cycle-Resilient Model and Its Implications for Chinese Baijiu Enterprises

As a century-old American spirits enterprise, Brown-Forman has successfully navigated multiple cycles including Prohibition, the Great Depression, and financial crises. Its core competitiveness stems from the ‘brand moat + pricing power’ model and the dynamic ‘crisis defense + upward offense’ strategy [4]. The acquisition of Jack Daniel’s in 1956 was a key turning point, transforming the company from a single-brand to a multi-brand matrix and laying the foundation for long-term stable development [2]. In terms of financial performance, Brown-Forman’s gross margin has remained stable at 58.94%-69.66% over the past 20 years, with net sales of approximately $4.26 billion in fiscal year 2024 [3], reflecting the robustness of its business model.

Through financial comparison with Kweichow Moutai [5], Brown-Forman excels in price-to-earnings ratio (27.1x) and return on equity (39.2%), while Kweichow Moutai has advantages in operating margin (74.6%) and net margin (50.0%). This difference reflects the distinct competitive landscapes of the Chinese and U.S. spirits markets, but Brown-Forman’s brand management and cycle response strategies are still worthy of reference for Chinese baijiu enterprises.

1. Brand Matrix and Acquisition Integration
   : Brown-Forman built a diversified brand portfolio by acquiring core brands like Jack Daniel’s, diversifying the risk of reliance on a single brand. Chinese baijiu enterprises can learn from this model by strategically acquiring or nurturing sub-brands to cover different price points and consumer groups, thereby enhancing risk resistance.

2. Crisis Defense and Offense Dynamic Strategy
   : Brown-Forman maintains financial stability during economic downturns and achieves growth through innovation and expansion during upturns. Chinese baijiu enterprises need to establish similar cycle management mechanisms to balance short-term performance pressure and long-term brand value accumulation.

3. Global Layout and Channel Diversification
   : Brown-Forman derives 45% of its sales from the domestic market, with international markets covering Europe, Australia, and Latin America [2]. In their globalization process, Chinese baijiu enterprises can learn from its channel expansion experience and promote their brands in combination with the consumption habits of target markets.

: Chinese baijiu enterprises can learn from Brown-Forman’s brand building and pricing power maintenance experience to enhance high-end brand influence; cover a wider market through multi-brand strategies; and expand growth space through global layout.

: There are significant differences between the Chinese and U.S. market environments, so Brown-Forman’s strategies need to be localized according to the characteristics of the Chinese baijiu industry; brand acquisition and integration carry integration risks, so the fit of target brands needs to be carefully evaluated; global market expansion faces cultural differences and policy risks.

Brown-Forman’s ‘brand moat + pricing power’ model and ‘crisis defense + upward offense’ strategy have provided guarantees for it to navigate multiple cycles. Chinese baijiu enterprises can learn from its experience in brand matrix construction, cycle management, and global layout, but need to adjust according to their own market environment and industry characteristics. Financial comparison shows that Chinese baijiu enterprises have advantages in profitability, but still have room for improvement in brand diversification and global layout.