Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
Don’t doubt the boom: The numbers are in, and bourbon is BIG
Two reports came out this week touting the bourbon industry — one local, one national — that prove bourbon is here to stay for a long while. It’s especially great news for Kentucky; the bourbon industry adds $8.5 billion to the state economy each year and generates nearly 17,500 jobs.
Those numbers were released Tuesday, Feb. 7, at a press conference in Frankfort led by Gov. Matt Bevin. They come from a biennial study that was conducted by University of Louisville’s Urban Studies Institute in conjunction with the Kentucky Distillers’ Association.
The big news is the signature spirit increased its economic output by $1 billion in the last two years and added an additional 2,000 distillery-related jobs to its workforce. The number of distilleries in the state is now 52, and the number of aging barrels is 6.7 million.
“The powerful growth of Kentucky’s bourbon industry is a testament to our proud history of innovation, engineering and manufacturing,” said Gov. Bevin at the press conference. “It is a genuine, homegrown, only in Kentucky success story.”
Bevin vowed to help cut the bureaucratic red tape and outdated alcohol laws across the state. Some of those laws were loosened last year with Senate Bill 11, which, among other things, allowed distilleries to sell cocktails at their establishments.
And since the study came out Tuesday, the Kentucky Distillers’ Association has filed House Bill 100 that aims to remove the prohibition on distillers participating in fairs and festivals, allows the sale of “vintage spirits,” and several other items.
Insiders say one of the most important things holding the industry back, however, is the state’s tax rate. According to the report, Kentucky taxes distilleries more than all the other 536 industries found in the state, at 34.4 cents per $1 of output. That makes our state the fifth highest in spirit taxes among all open-market states.
In comparison, as KDA president Eric Gregory points out to Insider, California has one of the lowest taxes on its wine industry, and beer states like Colorado, Missouri and Wisconsin also are much lower than Kentucky.
“We were pleased yesterday to hear the governor and state leaders commit to working with our industry to reduce our tax burden,” says Gregory.
Another report released Tuesday, courtesy of the Distilled Spirits Council of the United States, confirmed American whiskey is on the rise. Volumes are up 6.8 percent, to 21.8 million cases sold a year, and revenue is up 7.7 percent, to $3.1 billion. The sharp growth, the report deduces, was helped by millennials’ interest in the brown stuff.
Bourbon and whiskey, however, still have a ways to go to catch up to vodka, which sells 69.8 million cases a year with revenue at $6 billion.
Papa John’s officially names new executive following lawsuit
Louisville-based Papa John’s International formally announced the hiring of Michael Nettles as its chief information and digital officer.
Nettles started working for Papa John’s last year, but a federal judge ordered him to take a leave of absence after his former employer St. Louis-based Panera Bread Co. filed a lawsuit claiming that he violated a noncompete clause in his employment contract by taking a job at Papa John’s. The lawsuit, which was settled out of court, also accused Nettles of sharing trade secrets and confidential information with Papa John’s.
He most recently served as Panera’s vice president of enterprise architecture and IT strategy and has 27 years of experience in business and information technology.
“Not only is Mike a great cultural fit for our company, but he is also a proven leader in the digital and retail sectors that will help us deliver a better customer experience and elevate our digital platforms,” Papa John’s president and chief operating officer, Steve Ritchie, said in a news release.
NuLu business relocating next month
Home renovation store Honest Home is moving out of its NuLu storefront at 804 E. Market St.
Owner Sandra Perry said the business will move to a new spot in Louisville but declined to say where. She is hoping to sign a lease on the new, larger space next week, she added.
To mark the move, Honest Home is currently hosting a sale, but it will kick into high gear Feb. 20 through March 4. Paint will be sold at cost and other items will be deeply discounted, Perry said.
The company sells cabinets, tile, reclaimed wood flooring, paint and cleaning products, among other items. All the products are green conscience and responsibly sourced.
When Honest Home moves, Perry said, the store will ditch the tchotchkes that it currently sells and add more products related to home remodeling. Being located in NuLu, the store gets many out-of-town visitors. Offering the knickknacks was necessary, she added, because visitors aren’t likely to buy new cabinets or a large area rug.
The new store will allow Honest Home to “start afresh,” Perry said. “It’s really something we needed to do.”
Vegan business adds grab-and-go meals
Vegan food company V-Grits has added a new aspect to its business.
Owner Kristina Addington announced in a news release that she has created a line of grab-and-go meals.
“With our new line of products, called Elevate, we can show the healthiest side of a plant-based lifestyle and the endless benefits that come along with it,” Addington said in the release.
The meals feature only organic produce, and in addition of omitting meat and dairy, they exclude oil, gluten, soy and peanuts. Dishes include a quinoa salad, with an orange SunButter dressing, pad Thai, with ginger almond dressing, and zucchini lasagna, with cashew ricotta and sun-dried tomato marinara.
Elevate grab-and-go meals are available at all The Weekly Juicery locations.
V-Grits started with a food truck and subsequently added meal delivery service, a recipe card club and a line of cashew cheese sauces and spreads. V-Grits also is opening a restaurant in Portland. —Caitlin Bowling
Yum Brands net income up double-digit in 2016
Earnings per share also rose in 2016 to $2.45, a 18 percent increase, the company reported.
Two of its subsidiaries, KFC and Taco Bell, reported positive sales, both notching low single-digit same-store sales increases in 2016. KFC’s operating profit rose 5 percent, to $874 million. Taco Bell’s operating profit increased 11 percent, to $593 million.
“As a testament to the power of our brands, KFC and Taco Bell had relatively strong performance in December, despite difficult U.S. industry conditions,” Yum Brands president and CFO David Gibbs said in a release. “This momentum has continued into the New Year.”
Yum Brands executives are expecting even bigger things from the two brands as they expand deliver to more KFC and Taco Bell stores.
Despite reporting a 7 percent increase in operating profit, Pizza Hut continues to disappoint in comparison. Its operating profit came in at $370 million, and the pizza chain’s same-store sales declined 1 percent.
Ford unveils new Expedition
Ford Motor Co. this week unveiled an all-new version of its big SUV, the Expedition, which is made at Kentucky Truck Plant.
The company told IL that it had nothing to announce yet on whether the vehicle upgrade would result in investments or more jobs at KTP. The Dearborn, Mich.-based automaker last year invested about $1.3 billion into the plant to prepare for production of the all-new 2017 Super Duty.
Ford sold just under 60,000 Expeditions last year, accounting for less than 8 percent of the company’s SUV sales, which are driven by smaller SUVs, including the Louisville-made Escape, of which Ford last year sold more than 300,000.
An Expedition costs at least $47,000, or about twice as much as an Escape.
Sales for the Expedition last year improved 44 percent, by far the largest increase among Ford SUVs. The company’s SUV sales overall rose 4.3 percent.
The Motley Fool explained that Ford is investing in its big SUV because the more expensive vehicle generates greater per-unit profit and because Ford has lots of room to gain market share in the large SUV market.
“Right now, that market mostly belongs to GM’s big SUVs: the Chevrolet Tahoe and Suburban, GMC Yukon, and Cadillac SUV,” the Fool said. “Together, they have about three-quarters of the U.S. market for big body-on-frame SUVs — and GM sold a little over 270,000 of them in the U.S. last year.”
“Simply put, these are immensely profitable products, and Ford would like a bigger slice of the pie,” the Fool said.
Ford said the new Expedition, which seats up to eight, will weigh 300 pounds less than the prior model, thanks in part to an aluminum-alloy body. Ford said the new Expedition will add more than 40 features and driver-assist technologies not previously available on its big SUV. New features include wireless charging, a Wi-Fi hotspot, a 360-degree camera, adaptive cruise control, park assist and a lane keeping system.
The new Expedition will be powered by a 3.5-liter Ecoboost engine. Auto Start-Stop comes standard, as does a 10-speed automatic transmission.
North Carolina burger chain opens first regional location
Louisville native Eddie Miller signed a development deal with Hwy 55, a North Carolina-based burger and frozen custard eatery, to open four locations in Southern Indiana and 45 in Kentucky during the next decade. The first store opened earlier this week in Jeffersonville, Ind., at 5420 E. 10th St.
The menu includes classics such as wings, burgers, fried chicken tenders, french fries, milkshakes and sundaes.
Prior to becoming a franchisee, Miller worked as CFO of a privately owned information technology company in Louisville and is a CPA.
Hwy 55 has 135 locations in North Carolina, South Carolina, Alabama, Tennessee, Virginia, Arkansas, Florida, Georgia, Texas, Ohio, West Virginia, Denmark and the United Arab Emirates. It has sold the franchise rights to more than 1,000 franchise locations. —Caitlin Bowling
Fifth Third Bank and the city to bring mobile financial planning eBus to neighborhoods next week
Fifth Third Bank has teamed up with the city to bring its mobile financial planning assistance and financial literacy mobile classrooms to five neighborhoods next week.
The eBus is a refurbished city bus retrofitted with onboard computer workstations and internet connectivity. It is staffed by professionals who provide free one-on-one personalized counseling, credit scores, financial coaching, budgeting, job search and other services.
- Mon., Feb. 13, NorthWest Neighborhood Place, 4018 W. Market St., 9 a.m. – 1 p.m.
- Tue., Feb. 14, Nia Center, 2900 W. Broadway, 12:30 – 4:30 p.m.
- Wed., Feb. 15, Baxter Community Center, 1125 Cedar St., 10 a.m. – 4 p.m.
- Thu., Feb. 16, Charmoli Center Neighborhood Place, 200 Juneau Dr., Suite 200, 9 a.m. – 3 p.m.
- Fri., Feb. 17, Edison Center, 701 W. Ormsby Ave., 10 a.m. – 3 p.m.
“We are excited to be partnering with Fifth Third Bank to provide residents with this easy and accessible way to gather the tools and information they need to make informed financial decisions,” stated Tina Lentz, who leads several financial empowerment initiatives for Louisville Metro Community Services, in a news release. Once onboard the eBus, visitors will be able to:
- Request a credit report and review it with a professional
- Receive personalized evaluation of finances
- Gain information about fraud awareness and prevention
- Receive internet banking and bill payment demonstrations
- Participate in home ownership seminars and foreclosure prevention sessions
- Conduct online job searches and learn how to create an effective resume
UofL: Cardinal Stadium expansion fundraising ahead of schedule
Fundraising for the $63 million Cardinal Stadium expansion is ahead of schedule, thanks in part to major gifts from Pepsi, the Klueber family and a recent $5 million pledge from Norton Healthcare, the university said this week.
In addition, fans and supporters have donated about $47 million toward the project in the last year, UofL said.
Construction on the upgrades, which will add 10,000 seats to the north zone and boost capacity to 65,000, began in November.
Originally slated to open for the 2019 season, the university had said in October that better-than-expected sales for 1,000 club seats, 70 premium boxes and 12 suites would allow the upgrades to be completed for the 2018 season.
“The project is moving along steadily, and I’m very grateful for everyone who has contributed to the future of this program,” UofL Vice President and Director of Athletics Tom Jurich said in a press release this week.
The university said that the Cardinals football team will open its 2017 season against Purdue University at a neutral site in Indianapolis. The team will begin its 2018 season at the upgraded Cardinal Stadium. —Boris Ladwig
Former chief digital officer at Doe-Anderson joins Vibrant Nation as president
Doe Anderson’s former chief digital officer, Joe Pierce, has joined Vibrant Nation as president. Vibrant Nation is an influencer marketing agency and network for women 35+, founded by Stephen Reily (an investor in IL) and a division of IMC.
Pierce founded Emazing, an email newsletter company that he later sold to Sony. He then joined Sony as senior vice president at Sony Music, and deployed Emazing’s technology to deliver email newsletters for hundreds of Sony recording artists including Ozzy Osbourne and Jennifer Lopez.
Pierce worked at Doe-Anderson for seven years, with a wide range of clients, including Carrier Home Comfort, Kynect (Obamacare in Kentucky), Maker’s Mark, Jim Beam, Knob Creek, Louisville Slugger, Mighty Dog and Triumph Motorcycles.
“Vibrant Nation is a national leader in influencer marketing, and I’m excited to join the team,” Pierce said in a news release. “It’s a unique opportunity that will allow me to leverage almost everything I’ve worked on over the years, including email marketing, content marketing, lead generation, social media and digital advertising for world-class brands.” —Melissa Chipman