Good morning. My name is Dorothy and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter Fiscal 2017 Year-end Conference Call. [Operator Instructions]. I would now like to turn the conference over to Jay Koval, Director of Investor Relations. Please go ahead, sir.

Thanks, Dorothy and good morning, everyone. I want to thank you for joining us for Brown-Forman's Fourth Quarter 2017 Earnings Call. Joining me today are Paul Varga, our Chairman and Chief Executive Officer; Jane Morreau, Executive Vice President and Chief Financial Officer; and Brian Fitzgerald, Chief Accounting Officer. This morning's conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements and the company undertakes no obligation to update any of these statements, whether due to new information, future events or otherwise. This morning, we issued a press release containing our results for the fourth quarter of fiscal 2017 in addition to posting presentation materials that Jane will walk though momentarily. Both the release and the presentation can be found on our website under the section titled Investors, Events & Presentations. In the press release, we have listed a number of the risk factors that you should consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K, 8-K and 10-Q reports filed with the Securities and Exchange Commission. During this call, we will be discussing certain non-GAAP financial measures. These measures and the reasons management believes they provide useful information to investors regarding the company's financial conditions and results of operations are contained in the press release. And with that, I'll turn the call over to Jane for her prepared remarks.

Thanks, Jay and thanks for joining us for our fiscal 2017 year-end earnings call. As a reminder, we have posted slides to our website that I will reference throughout my comments today to help walk you through our 3 main topics which include, first, a review of our fiscal 2017 results; second, a deep dive into our initiatives to accelerate top line growth over the coming years through reallocating spend and continuing to provide leverage to the bottom line through substantial cost savings; and third, our outlook for fiscal 2018. Let me start with our overall highlights shown on Slide 3. First, as expected, our full year and fourth quarter reported results were heavily impacted by acquisition and divestiture activity as well as FX headwinds. Now that we have last year's sale of Southern Comfort and Tuaca and given the dollar's recent stabilization, we believe our reported results will more closely approximate our underlying growth as we look ahead to fiscal 2018. Second, in the fourth quarter, we experienced another modest sequential improvement in our underlying top line growth which drove second half trends that were almost as twice as strong as the first half. This was helped by the emerging markets which rebounded nicely off of last year's soft results. Third, in fiscal 2017, we delivered meaningful operating leverage through SG&A discipline, a theme that should continue over the coming years. And finally, we shared our outlook for fiscal 2018 in our earnings release earlier this morning. Given the solid top line trends we experienced in the back half of fiscal 2017 and our plans to further accelerate the business, we expect full year underlying net sales growth of 4% to 5% and underlying operating income growth of 6% to 8%. We also anticipate earnings per share in the…

Thank you, Jane and good morning, everyone. When we began the year, we knew that FY '17 would be, in some ways, a uniquely challenging year to communicate. Beyond the normal fluctuations associated with foreign exchange and inventories, some of the things we knew that would create that challenge were, first, the sale of our liqueur brands and the resulting gain on that sale, all of which occurred last spring; around the same time, the purchase of our Single Malt brands and their resulting integration throughout fiscal year '17. Both of these items, of course, were implemented with the aim of positioning the company for sustainable growth in the years ahead. Additionally, we had the reality which you're well aware of, of cycling against Jack Daniel's Tennessee Fire's large-scale intro in the United States, particularly in the first half. As part of this, we correctly, in my view, did not introduce another flavored whiskey, instead opting to continue expanding both Jack Daniel's Tennessee Honey and Jack Daniel's Tennessee Fire while readying the system for this year's forthcoming Jack Daniel's Tennessee Rye launch. And, of course, as you've heard throughout the year, the impact of the used barrel business cyclicality which, as you know, is not our primary core business, but important to understand nonetheless when digesting our earnings. Each of these impacted our reporting and underlying financials in various ways throughout the year and required a little extra attention on our annual report and understanding the overall results. When the year concluded, we had grown underlying operating income by a very nice 7%. And I believe we continue to position the company for growth in the years ahead. That continued growth expectation is reflected in the guidance that Jane shared with you just now which forecasts an acceleration in underlying…

[Operator Instructions]. The first question comes from the line of Vivien Azer from Cowen.

So I wanted to start please on -- with the A&P commentary. Paul and Jane, I think it's quite encouraging to hear that it's going to track with sales, given that A&P on an underlying basis really had been lagging your top line over the last few years. So -- but as you think about kind of deploying that incremental investment, 2 parts please. Number one, how you're thinking about brand hierarchies and how you're going to prioritize around that? And number two, any geographic focus that you'll call out?

Sure. I mean, I think the brand hierarchy would not surprise you. I mean, it -- I mean, the focus would be along the lines of the Jack Daniel's family. I think certainly from year to year, you would see an increased emphasis on some of the innovation, the launching of brands like Jack Daniel's Tennessee Rye, certainly increased investment on the expansion of our single malts into FY '18, for sure is a contributing factor. Woodford Reserve has been receiving incremental investment steadily. So I think it would be along the lines of those premium whiskeys and premium brands that we've highlighted consistently.

And from a geographic basis, we're allocating a bit more to the United States, some of which is what Paul was alluding to as it relates to our innovation. That's where Jack Daniel's Rye is going to be launched initially in the seating of Slane. And then we're investing more behind Woodford Reserve, that came to our planning process this year, as well as other -- the Gentleman Jack, we're actually doubling our meaty investment there too. So really good creative. I did, Vivien, I just wanted pause for just a moment and something I was looking at recently with the Board of Directors, we looked back at our A&P spending over the last 6 years. And when we looked at it, stripped the Southern Comfort for those last 6 years, we actually spent more than our underlying net sales growth. And 2 of them, we spent at. So I think some of it is infusing those years that we didn't have -- we had Southern Comfort in there. It's probably something that we -- to share with you while at this point in time.

Yes, but it definitely distorts the figure.

It certainly distorts it, yes.

Following up on the shift in your A&P dollars, can you talk a little bit about the decision to move dollars out of market research into media? I mean, I certainly -- the incremental media makes a ton of sense to me. But given how dynamic and competitive the alcohol industry is right now, I'd just love to hear some incremental thoughts on reducing your investments in market research.

Yes, I wouldn't read too much into that one as -- but I think the -- those -- that is an example I think that Jane cited, is really more along the lines of given the competitiveness that exists in markets around the world today with so many new increased competitors, et cetera and their eminent realities that needing to get your dollars into whatever those programs are oftentimes described as media or efforts at retail, et cetera. But having what we call sort of working dollars against the consumer and I think some of what those reallocations that we reference are in some ways long overdue because the world of being able to observe consumer behavior or get consumer feedback has been changing so significantly in the last 5 to 10 years because of everything from social listening to the ability to get directly to your consumer because of a increased access to technology, that -- I mean, it's a natural consequence that you could move media dollars to where the consumer actually is today. And so actually find that particular example to be one, it's a pretty natural reallocation, doesn't mean that you don't need to be in touch with your consumer at all. I wouldn't want that misinterpretation. And frankly, what we know and have access to today is far greater than it would have been 10 years ago. And so we used those examples of just to highlighting that what we've communicated inside our company to our employees is the desire to really have FY '18, '19, '20, I mean really putting forward our best foot as it relates to active investment against the consumer. So we give examples inside like a little less planning and a little more execution or a little less background and a little more front line. And these are subtle examples, because you absolutely need all of this in order to run your business successfully. But in this subtle reallocations, we used those types of examples and we thought we'd share a few of them with you today.

Sure. And just one last housekeeping item. Jane, you called out the inventory destocking in the U.S. Was that just kind of normal course of business housekeeping? Or are you seeing your wholesaler and distributor network start getting a little bit leaner in terms of inventory on hand?

I mean, I think it was a bit more than expected and a bit more than we would expect if we look at next year. I think we'll have may be $0.01 giveback next year, but it was a little bit lower than we expected. Last year, it was slightly higher. So I think it was more -- we expect it to be about $0.01 coming back next year.

But not a fundamental shift related to tight finances or things like that. I mean, it really just a more timing related.

Yes, timing-related. Yes, thank you.

Your next question comes from the line of Nik Modi with RBC Capital Markets

I was wondering if you can provide may be some more color commentary on the pricing discussion you were saying about the challenges you're seeing right now. Just if you could be more specific and just give us some examples. And then on a related note, as you think about the $100 million in cost savings, how much of that is pegged to some of the trade spending ROI that you referenced during the conference call?

Jane, you want to take the second one first and then I will address the pricing one?

Yes. So let me make sure I understand what you are asking on the second, on the $100 million and return on invested capital. Is that what you say?

No, no, no. I was asking, of the $100 million that you're talking about, how much of that is linked to getting savings out of your trade spending, as you referenced during the conference call?

Oh, I see what you're saying, okay. So how much is coming from our better analytics as it relates to depth and breadth of frequency of promotion and things like that? Yes, that's a great question.

Correct.

So just so you know, as we've discussed in the call, these initiatives are something that we have just started in earnest in F '17. So the split and how they may come about will likely change from where we see it today. And so I think more importantly, in the short term, we have already seen a lot it come from SG&A. And I think you're going to see a bit more from the SG&A as we look into F '18. Then when we look at our cost of goods that I was alluding to, those programs that take a bit to get into place and just how our inventory comes through because of the aged products. Those will be over the coming -- pursuing years. And then the depth and breadth of -- or the effectiveness of our discounting, if you will, the effectiveness of how much spending that we'll have there that will be as we -- we're actually in the early stages of that -- for that particular aspect will change over time.

And Jane, if I could just interject real quick, how much of percentage of sales is trade spend, the gross to net? Can we just get a rough parameter of how big it is?

I mean, our discounting dollars are some -- are around the $600 million, not all of that is trade spending. Some of it's just the future exit.

On a basis of gross basis $4 billion, $5 billion.

4 billion, yes.

So [indiscernible] a little more than 10%.

Yes.

Oh and on the pricing question, I mean, look, this is an obviously a regular question that we explore each year and we've talked about it in the past. I really -- this is something I think is really important for this year. And maybe that if you think about, there are various times where it's -- we feel you're more compelled to take prices up. And I would cite a couple of years ago when industry supplies were a little tighter. There weren't as many competitors, particularly the -- a lot of these new upstarts and allowed to developed markets. There are have been examples related to currency where we've taken prices up in some of the emerging markets around the world. But I think as a general sense, we're leaning little bit more on the volumetric portion this year than pricing as a conscious decision because of what we consider to be the importance of true consumption-based volume development of the brand. I mean, I know you understand there's volume and pricing, obviously. But in our business, I've just always felt that there are times where, particularly in a social business, where the brands interact into the public domain and people actually observe the consumption, I really do feel like that from time to time, you really want to make sure that your volumetric market share has the support and doesn't have the, in some cases, the challenge of rising prices. And I think one of those times is upon us right now. How long it will last is an open question. I would give the example of last year, Woodford Reserve took some nice pricing in FY '17. And then this year and it's -- will take a little bit of price but not near as much as it took last year. And part of the reason it is, that's a very competitive super-premium American whiskey and bourbon category. And Woodford Reserve needs to continue to retain its share of consumption in that and particularly with all the increasing competition. You will see us change prices where we feel like positioning is not appropriate. And we, in various countries, will do that from time to time. The one that has been most recently implemented was we really felt like down in Mexico with el Jimador, we had the opportunity for business model reasons, but also just to compete in the marketplace where we wanted to compete to fundamentally reposition the brand on price. We have some examples like that as well. But I do feel like FY '18, one of the themes is leaning a little more heavily on volume versus price to drive our net sales growth.

Great. And then if I could just ask 1 more and just address the elephant in the room and I'm sure most people are wondering. Usually in cases where M&A is being discussed in the media, most companies don't comment on any rumor. But in this case, Brown-Forman came out with an official release. And I just was wondering, Paul, what prompted that? Why take such a strong reaction to what was being said in the press?

I think there were a couple of things. And there's an art, of course, to saying something without saying anything. And we, of course, do not comment on any specific speculation. So we held and continue to hold to our -- I think the policy that served us well there. But I think because of the noise in the marketplace that I think the way that it was -- some of the trading volumes in our stock, the way it was affecting our stakeholders, our employees, et cetera. And the interesting thing is always said was something that we've said many, many many times before just against the backdrop where you had all that noise. And in my view, it was well timed and said enough.

Your next question comes from the line of Judy Hong with Goldman Sachs.

So I guess I wanted to get a little better understanding of how you're seeing the U.S. market right now. I mean, if I kind of look at the fourth quarter, underlying sales growth up 1%, I know the market was kind of slower in the beginning part of the year, but just seems like it was weaker than what's certainly been trending in the first part of the year. So what do you think has sort of caused the slowdown in the fourth quarter? And then within kind of that 4% to 5% underlying sales growth outlook for fiscal '18, what do you think, kind of, U.S. backs up there? And then any kind of color around the Rye opportunity and how much incremental growth that you think that, that can provide?

Yes. So let me start and I'm sure Paul will chime in here. First of all, Judy, as you can imagine, we don't focus heavily on any given quarter. And so there were some noises within the quarter. I think it's better to pull ourselves back and look more at the syndicated data and look at the -- our Brown-Forman value growth in the U.S. And it's been running in the 3.5% to 4% range on a blended basis, on a value growth basis. And I think some more recent trends also show some improvement there. So that's something to keep in mind because you're going to have noise in any given quarter results. So I do acknowledge and we all acknowledge that the U.S. market in the competitive nature is very intense and we had things that slowed down in TDF and our own trends, again, just noting again that the syndicated -- more recent syndicated data is showing some improvements which is encouraging. Now as we look ahead to fiscal '18, there's -- I would like to think about this in the couple of buckets, I'll like talk about innovation and then we'll talk about our core business that we have today, from tequilas to premium bourbon to the Jack family. So as we look to -- further to '18, a lot of the innovation, I said earlier, was going to be focused in the U.S. So Rye will be coming through in the U.S., that's where we're primarily -- primary launch is. We're going to be introducing Slane this summer in the U.S. We're going to further see the free scotch -- the scotch single-malt Scotch brands in the U.S as well. So we're going to get a lift from that innovation, if you will, from these…

Yes, the other part [indiscernible] I think last part of your question was about just discuss the Rye opportunity in a little more detail. So I just thought I'd, I mean, just add a few points on that. I mean, one thing you'll hear us regularly, we said it several times today about this leveraging existing assets. And one thing you have to remember, of course, that you'll notice that we've -- it's so easy to forget, is that you would've had to have made these products so many years ago to have the assets called supply today. And we're entering a period just now and really the last year looking back and into this year and in the last couple of years where we're going to have really ample of rye supply. And this category is not a huge category across the United States right now. And one of the challenges is that can people get their hands on high-quality rye. Maybe this might have escaped you in the past, but Woodford Reserve introduced a rye a while back. Jack Daniel's single barrel at the very super-premium has arrived, both those are doing very well in the marketplace, are getting nice critical acclaim and now here comes Jack Daniel's Tennessee Whiskey rye at a premium price point to regular Black Label. And the thing that gives me so awe in this example really utilizing the assets that we have of ample supply now. And I take heart from the fact that in previous instances, at least in my career, where Jack Daniel's entered the super-premium whiskey category with Gentleman Jack, when Jack Daniel's has entered the RTD segment so successfully and here most recently as you all will have observed, its entry into the flavored whiskey business, Jack Daniel's…

I thought I might build on one more thing that Paul said, just it's given perspective, I think you were trying to get to some volumetric things and I will tell you when we did rye and when we did Fire and when we did Honey, they were 400,000, 500,000 cases under year 1. And what we -- this is much smaller than that.

That is supply constraint.

Exactly. Supply constraints. But again, as you mentioned, it's going to be premium priced to Jack, proof -- higher proof as well. So...

Yes. And I will say one of the interesting things we'll be see -- interesting to see how it plays out in the trade. But we have waited to enter this market because we wanted to make our own rye whiskey. And it strikes me that all of the rye whiskey that particularly presented that the premium leaders in that category today, the products they're selling for the most part are not made by them from their own distilleries. And so that I really do believe there is a credibility factor related to Jack Daniel's producing its own ryes, Woodford Reserves similarly. And so it would be interesting to see how this plays out over the next couple of years.

Got it. That's very helpful. If I could just follow up on the cost-savings program. I mean, I guess I don't recall in recent years where you came out with actually like a multiyear $100 million type of program. So I was just curious, sort of, what was the kind of the premise in terms of coming up with sort of a hard target number. Perhaps it's maybe in response to some of the rising competitive pressure and the need to kind of find resources to invest in the marketplace. Or if you're looking at benchmarking against the -- some of your peers and sort of finding opportunities and, kind of, is there more to go after 3-year period.

I mean, you outlined it, I thought, very well there. I think it's really the latter 2 points you made, that wanting to remain competitive, finding opportunity. Over the years, we've been less overt, I agree with you. At times, we definitely did some of this, I forget how we actually phrased it back in the '09, '10, maybe even into '11 period a little bit. We certainly were talking about this one concept that we regularly explore. I mean, if you just think about Brown-Forman's, what exists between our gross sales and our net income. I mean, there is in the range of $3.8 billion of available resources there. Everything from discounts to costs to investments you make, to taxes. And I really do think it's smart from time to time for companies to regularly be looking at those resources and seeing if just -- even if you don't change the aggregate amount, even if just subtle shifts or seen sometimes important shifts, can make an impact on the sales growth rate and make their way down to the bottom line more efficiently. And I remember there was a little period back in that time when we really were working packaging an RTDs. And so the investment actually showed up in some interesting ways. I mean, it showed up in your cost of sales and not in your A&P line. And we've got a few examples of that this year, Jane referenced like the Woodford Reserve repackaging, the Old Forester. So there are examples of it. But nonetheless, the way you actually stated the last 2 elements of that which were to remain competitive and make sure you're putting your resources forward to maximum impact, is the real reason.

Your next question comes from the line of Robert Ottenstein with Evercore.

Two questions, the first one, Paul, I understand how you want to invest more behind the brands. My question is more about brand positioning. And the thought is, one of your major European competitors recently had a Capital Markets Day and talked about how the consumer is redefining status, redefining premium. There's a democratization of status. People are going from being self-centered to be more generous, a whole range of things like that. And that -- what counted as status in the past isn't necessarily that today. And given Brown-Forman's focus on the premium segment, do you agree with that, that status and premium is being defined today differently than it was 20 years ago? And how do you see yourself evolving along those lines?

That's a really interesting question. Yes, of course. I think we could look to the world and see examples of how luxury is suddenly being redefined or I mean one of the -- and some of the comments you were referring to there actually are -- hit the sweet spot I feel of why bourbon and American whiskey are doing so well. We've talked about that at times. I mean I'd be glad -- would be fun to go back and read our annual report letters from last year, where we took that topic on quite directly related to why, why is American whiskey and why are they growing in the way that they are? And, of course, one of the questions that arises with us, I'm sure you all think about it, is all this rise of, say, authenticity and people seeking authentic products and all this. And, of course, I just referenced one of the great ironies. While they're seeking authenticity, underneath some of these products, actually is not very authentic products. And so it is a great irony. And so against this backdrop, I'll give you the one example here over the last 18 months that would be emblematic of what you're talking about at our company. We have always had the asset of Lynchburg, Tennessee and not only our wonderful products and the manufacturing operations, the quality that comes, I mean, it's underestimated piece that the whiskey-making credentials and high quality of Jack Daniel's whiskey and liquid. And over the years, as you flex your marketing muscle in certain ways or -- and make investments in certain areas of the P&L or behind elements of the marketing mix, most notably digital, things like that, we would take steps and move away a little bit from our home place. And what you would have seen in -- I mean, you have to be watching it relatively close in compared to prior years, but our creative output is grounded far more today in what makes Jack Daniel's so real, so authentic and so valuable. And it's the story of the brand as grounded from where it began, where its heartbeat is today. And so if you even look at the first creative effort from Gentleman Jack that even references Lynchburg, Tennessee, really is out right now. The Jack Daniel's Tennessee Honey creative takes us back there. So there's an example of how we're attempting to -- and these are subtle things, I'll admit. But put forward, the best effort against the backdrop we see right now which -- I mean, there's just no reason for Jack Daniel's, because of its large size, to not be viewed as inherently one of the most authentic brands that ever existed. So we want to make sure we reinforce that with -- more and more with our marketing.

And are you seeing the benefits of that in the brand equity among millennials?

Absolutely. I mean, it's a regular chance -- a challenge, as you know. I mean, one of the hard bits of this is to the extent that they are using the word authenticity to describe that they really just want what -- sometimes you hear is the word discovery, something that is totally unknown or new. It's very hard and say the American marketplace for Jack Daniel's to be seen as brand-new and unheard of. I mean, it's virtually impossible. But you can utilize the assets you have to emphasize the point that you think might be most important and relevant to millennials. And I think there are a fair amount of millennials who, as they discover products and categories and particularly in these whiskey categories like rye and American whiskey bourbon, that they'll be interested in more information about the brand. They won't just look at them for the name on the label or the latest tagline. And so from our vantage point, I think it comes down to telling the story as prominently and compellingly as we can so that they can learn more about it. And I do think it is a much more difficult exercise today with the array of competitive products out there. But in some ways, they will help position us as authentic as well by their own existence and behavior.

Terrific. And then my follow-up question is on kind of the global route to market, if you could kind of give us an update of where you are. You're always kind of, every other year, going into another country more independently. Maybe kind of where things stand with Spain and any other areas that you're thinking of in terms of significant route-to-market enhancement?

Sure. I mean, Spain, obviously, it's the latest example. And the one of the reasons we're so excited there is we've long thought that was a possibility because of the size and potential we think for Jack Daniel's trademark and other trademarks again set huge whiskey business there. And, of course, even the Spanish market had been so difficult for a lot of consumer products. So now we felt was the time as we started to see a little bit of a recovery. And it just seemed for us to be the right time to make that investment. We actually just launched I think last week to real great enthusiasm and excitement, kicking it off internally for our own people. And so -- but there will always be, Robert, I mean, I think examples. If you -- I mean, like even in an owned place like Brazil from time to time, we think about how do we add investment to or geographically expand within that large country. So oftentimes when we go in and say we're taking a step forward in terms of forwardly integrating with route to market, it doesn't mean we're full scale in every aspect of the country all at once. So there'll be examples like that. I continue to think that the U.S. market is evolving right in front of us as it relates to route to market, of course there's that 3-tier network and the evolving wholesale community and all kinds of changes that are regularly occurring there. But all of the things that you have to stay alert to, the emergence of the direct-to-consumer aspect that's going on and so all of the -- and each state, of course, is regularly considering changes to its route to market in terms of availability of our core products in expanded ways. So I think in order to service that, we have to regularly tweak it. But one of the reasons we're seeing more SG&A efficiency today than, say, for those of you that followed us 10 years ago, is because that was a period where we were making those initial investments in developed markets to build out what [indiscernible] might have referred to as distribution independence or route to consumer. And once you've done that in a number of places and we've -- even along the lines of the last 10 years, there were periods where we paused. But I do feel like now you make the use of those investments by -- we're hitting this example, a perfect example would be utilizing Jack Daniel's presence in a lot of these developed markets, not only for the benefit of focus for Jack Daniel's, but to sell more Woodford Reserve, Old Forester, GlenDronach, et cetera. And so you should expect us to pursue more revenue synergies within the existing RTC assets we have.

And I guess you had closed -- you had finished France a year ago. And I think -- is that roughly, right? And you had obviously very strong growth in France, 10% underlying growth. I mean, can you see that direct relationship between those investments and the growth and maybe half of that growth came from the enhanced route to market?

Yes, in the first year that it occurs, you have it distorted because you pick up some margin, that you have pick up costs, et cetera. But after the first year, it really is down to the efforts of that investment -- related to that investment. It's about focusing on your brands. And so yes, I would say that a good -- I mean -- and by the way, we've been, I think, in France for 3 years now.

Yes, so it's 3 years. So the first year was distortion in the metrics because of the change. But then in years 2 and 3, that's been attributable to continued focus on those. And actually in that particular country, it's just now that we're starting to show some excitement behind brands like Woodford Reserve.

Your next question comes from the line of Laurence Whyatt with Crédit Suisse.

You mentioned, I mean, an improved contribution from innovation next year. You just highlighted Tennessee Rye would be a big part of it. But could you please elaborate especially, I mean, how we could think about BenRiach, Slane, Coopers' Craft? Basically, I'd like to better understand in the U.S. specifically, could that be a regional launch, national launch? When and how big we should think about it? And if you can share a bit more about the premium price you are thinking for Jack Daniel's rye, that would be great.

Well, I'll answer the last question first. We see Jack Daniel's Tennessee Rye operating at a modest premium to Jack Daniel's Tennessee Whiskey and in the sort of sweet space that we're in the U.S. rye segment a lot of the volume is. So just around or below $30 a bottle $7.50 is the way to think about that. And so -- and we think -- and look, there's a lot of activity in that particular price point, obviously, between $20 and $30, but even between $25 and $30 in the U.S. across a lot of categories. And so we think that is right. And then within a rye whiskey lader at Brown-Forman, you will then have present examples from both Jack Daniel's Woodford Reserve and Jack Daniel's Single Barrel going straight up a rye lader of price premium pricing. So...

Yes, on your Slane aspect of the question, recall that we're building our own distillery in home place which we hope to open -- have opened this summer. And as a result, the whiskey that we have, whiskey that we bought from a third party which we didn't turn -- in turn finished ourselves. So we've just launched in travel retail in Ireland in April. And we're going to be very selective in our future launches of this because of this limitation on liquids. We have a number of states that we're going to in the U.S. It will be on-premise-focused. And the same thing in the U.K., on-premise focused further out in Ireland. I mean, the price point on that's going to be I think EUR 30 is what is what is target to be in Europe.

Yes. And one thing about the Slane product, I mean one thing that has been so nice for us for the last year is, particularly in these last, say, 3 months has been some of the nice critical acclaim that our premium whiskeys are receiving across, I mean, really Woodford Reserve in certain aspects, but all -- very much the single malts. I mean, the product is clearly in the bottle there. And so that is a huge asset as we go out and expand distribution and introduce the brand names to people. It's already -- each of those 3 brands are getting very nice reception in a number of the competitions that exists as people go and evaluate and rate the high-end single malts. And then similarly with Slane. It tastes -- one of the things that's making Irish whiskey so attractive to consumers increasingly around the world today is its drinkability. It's light. It's excellent-tasting category. But one of the attributes we're bringing, as Jane said, when we finish this, we're bringing a little bit of our Kentucky bourbon influence to that and the way we're finishing it. And so people are actually taking note of the fact that it's still very much in the Irish family but has elements of -- and influences from some of the more robust bourbon flavors. So, so far so good on the reception to that.

And if you -- I can [indiscernible] just on the U.S., I mean clearly, Judy pointed out, there was deceleration over the year, in 2017. So increased competition, more crafts rates coming in. So how you plan to maintain share of space and also introduce new innovation in that context? Because I believe it's either more expensive or more challenging for you guys, I mean, to gain space.

Yes, well, certainly more competition means more competition for everything, consumer palates then retail shelf space and back bars. I mean, this is where we have to depend on the strength of our distribution network and our experience there. I mean, if there is a single call we hear from a lot of the craft brands and remember, we have some. I mean, Coopers' is in our view a craft band, Woodford Reserve in my view was the original -- one of the original brands that began this movement toward more boutique bourbons. And -- but one of the challenges they all have is they have difficulty getting into distribution. I mean, many of these are starting in small neighborhoods, et cetera. And as they build out, one of the challenges they have is finding access to the marketplace. And that is certainly something that Brown-Forman would not share. I mean, we have quite an investment, quite a history of having a dedicated effort against our portfolio and great partners in the U.S. who prioritize the development of Brown-Forman's brands. So we periodically even get calls from people who will want to have us represent their brands and the like. So I do feel like on that particular front, we will be more than competitive and hold our own.

Thanks, Laurent. And thank you, Paul and Jane and to all of you for joining us today for Brown-Formans' year-end earnings call. And please feel free to reach out to us if you have any additional questions. Have a good week.

Thanks, everyone.

Thank you, ladies and gentlemen. That concludes today's conference call. You may now disconnect.