Fawn Weaver’s Entrepreneurial Journey as an Outsider in the Spirits Industry

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Brian Kenny:

What beverage created by monks, dates to 2000 BC, has been used as both a medicine and a party drink, lasts for up to 100 years, and was once the favorite currency in the state of Pennsylvania? Here’s a hint, it begins with a “W”. That’s right, it’s whiskey. With recipes passed on and perfected through the ages, this spirit has been adopted in markets around the world, spawning dozens of varieties, while generating around $60 billion in US sales over the past year. Whiskey has benefited from a recent surge in popularity, driven by craft distilleries and the emergence of premium brands, but in a segment that’s dominated by a small number of well-established heritage brands, new entrants’ only hope of breaking through is to capture lightning in a bottle. Today on Cold Call, we welcome Hise Gibson, to discuss the case, “Uncle Nearest: Creating a Legacy.” I’m your host, Brian Kenny, and you’re listening to Cold Call
on the HBR Podcast Network. Hise Gibson is a senior lecturer whose research focuses on topics related to innovation and technology, and operations management, human capital development, inclusive leadership, and leading organizations through crisis. You’re a first-time guest on Cold Call. Welcome, Hise.

Hise Gibson:

Thanks a lot, I really appreciate it.

Brian Kenny:

So, I’ve got to tell you, in preparation for this podcast, I went on the hunt for some Uncle Nearest whiskey because I thought it’s important for me to do some product research, to experiment with the product. I failed in that experiment; I couldn’t find it. So, one of the things we’ve got to do is make sure that it’s up here in the Northeast in stores, but have you tried it?

Hise Gibson:

Absolutely. I think it’s an amazing product and if you venture out about 15 miles from Cambridge, you can find it.

Brian Kenny:

Okay. All right, I’m going to ask you for the location after we’re done here today. It’s funny because I was thinking on Cold Call, we have covered the beer industry, we’ve covered, we just did an episode on natural wine making, and now we’re into the spirits. So, we’re just trying to make sure that we cover all the different possibilities there. I’m going to ask you to start by just telling us what the central issue is in the case and what your cold call is to start the discussion.

Hise Gibson:

I think the central issue in the case is, can what Fawn did before be replicated in a completely different industry again? Or was this just pure luck that she was able to stumble into the spirits industry and create basically what we know now as a unicorn.

Brian Kenny:

Fawn Weaver, by the way you mentioned her, she’s the protagonist in the case and we’re going to talk more about her. I’m wondering how did you hear about it and what inspired you to write about the case?

Hise Gibson:

Once I learned about the story of Uncle Nearest, and so the story around the formerly enslaved man who taught Jack Daniels how to make whiskey.

Brian Kenny:

Amazing.

Hise Gibson:

Not a myth, not folklore, not some kind of story, it actually happened, and then that’s the story that wraps around this brand. And so, if we think about just basic marketing, what pulls people in? A great story. When I learned that, I was like, this is great. I stumbled upon Uncle Nearest, drank it, great product. And I was at a gala and I met a buddy who was an investor who knew her, and I was able to get her on a call and after 10 minutes of talking to her, I’m like, oh, we got to share the story. There are so many points in just her spirit, how she engages, how thoughtful she was.

Brian Kenny:

Tell us a little bit about her journey before she found herself in the spirits industry.

Hise Gibson:

Well, her journey is very unique, primarily because she’s a high school dropout. She went, somehow found herself into marketing. She stumbled into being basically a writer, historian type, who’s known for that. So, and she stumbled upon Uncle Nearest through just reading an article in the New York Times in 2016, because Jack Daniels was starting to think about almost resurrecting its history around connection to underrepresented groups and how it came to be. And there’s struggles around that and a reporter wrote about it, she learned about it, and then as a historian decided, you know what? I should write a book on this guy. But once she arrived in Tennessee and did a lot of studying and research, thought, I got to do a little bit more. And she talked to the family and that’s what drove her to do something: put his name on a bottle, is what the family said.

Brian Kenny:

Yeah, which gets to the legacy mentioned in the title. Do you think that her background made her uniquely suited to be able to see these opportunities and take advantage of them, to be so entrepreneurial?

Hise Gibson:

I think her background is critical because like many unconventional leaders, they’re not constrained by the pathway. They are unmoved by the norms because she was never taught the norms. Everything she’s done, she’s done for the first time, which creates probably an ultra-entrepreneur, because of not being constrained by any of the status quo. It doesn’t affect her at all.

Brian Kenny:

Yeah, and not afraid to do things that she hasn’t done before, like write a book, like become a published author, all those sorts of entrepreneurial things that she pursued in her time, and then launching Uncle Nearest. In the intro, I mentioned that it’s such a tightly controlled industry. I mean, there’s regulations that control it, there’s existing players that control it, that make it very difficult for a new entrant to come in and be able to break through the way that she was able to. What are some of the things that she did to be able to have that kind of impact so quickly?

Hise Gibson:

Great question. I think what she did to have an impact so fast was she was able, because of her research, to recognize the industry is so fragmented, and a lot of that if we go back 100 years to Prohibition, there are a lot of rules and structures that we put in place post Prohibition that makes spirits a very state to state industry, with very large distributors in each state. Each state has different rules, and she leveraged that to her advantage. And also being able to communicate with Jack Daniels as not a direct competitor. She was very clear about that, she’s not going to be Jack Daniels No.7…Jack Daniels No.7 Seven is not a premium brand. She’s going to operate at a different level, which allows for coaxing and the ability to not compete, which meant Jack Daniels could support, which is what they’ve done the whole entire time.

Brian Kenny:

That’s kind of remarkable in and of itself though to me, because she comes up with this idea, we’re going to celebrate Uncle Nearest and the contribution that he made to creating one of the best American spirits. And the cynic in me would say that the people in charge of Jack Daniels would shut that right down and take that idea for themselves. How was she able to negotiate that?

Hise Gibson:

One thing that is interesting, that I think is interesting, and why I love sharing this case, is highlighting the leaders, do you want to be right, or do you want to be effective? Two different things. And in the run up to developing Uncle Nearest, she positioned herself as just the chief historian, just the researcher, just the young Black woman over here who is sitting in the meetings taking notes. And her husband, who’s an amazing, amazing man, Keith, who was a long-time entertainment executive, sat in the room as the guy because it’s a male-dominated industry. And because of so many entrants, what’s one more player? They’ll fizzle out in three to five years, which is the life cycle, almost like a National Football League athlete, three to four years. You’re not going to be able to make it, and so you’re not a threat. So you think. And there’s so many rules to enter into the industry, there’s no way you could be successful.

Brian Kenny:

Yeah, I think the case even mentions that she would try to get calls back, she would phone up the people at Jack Daniels that she needed to talk to and then she wouldn’t hear from them, but if her husband called, he would get a call, same day.

Hise Gibson:

And just that reality of having an unconventional upbringing, being a Black woman in America, recognizing and accepting the world as it is, not as she wished it would be, it should be fair, it shouldn’t be that way. Okay, it is that way. Now, how do I navigate it? And she never took anything personal, she focused on, what is the goal? And that I think that mindset of trying to be effective versus focusing on being right is what really helped her move quickly and then navigate challenges that she didn’t realize were about to come, like the world shutting down and having to still sell spirits.

Brian Kenny:

Right, right. You mentioned a little bit of the history of Uncle Nearest and the contribution that he made. How did she treat that? I would imagine it’s very delicate, right? You don’t want to look like you’re capitalizing on him, and that’s not what she was trying to do. She was trying to bring his story to the surface to create a legacy. How did she treat that?

Hise Gibson:

So, she treated bringing the story to light based on those values and two of those, honor and respect. The core values of the organization—that’s how she thought about the story, and as I would just say, a master marketer. I don’t think she would say that about herself, but as a master marketer, if I can put the story out, the switching cost for whiskey is not high. If it’s a good product, I’m going to go to it, if it’s a great story, when I taste it it’s going to be fantastic. And so she treated it that way, and because of the fact-based way in which it exists, the story was actually in Jack Daniels Distillery up until 1979. It was part of their tour, “Jack Daniels, The Last Descendant,” and the autobiography that came out in 1967 on Jack Daniels mentions Uncle Nearest more than any other person.

Brian Kenny:

Interesting. So they didn’t shy away from it. They owned this.

Hise Gibson:

That was just part of who they were and there’s been three generations of Uncle Nearest descendants who have worked in Lynchburg in the distillery, for over 100 years.

Brian Kenny:

Yeah, so the relationship between Jack Daniels and the family is strong, which is also helpful here. Do you think that the introduction of the brand and the story itself was able to have some sort of an impact on recognition of African Americans more broadly?

Hise Gibson:

I think it did provide a push for recognition of African Americans’ contribution more broadly, but as we both know, if the product’s not good, it is not going to sell. And because of the reality of the spirit industry, she had to develop the appropriate strategy to pierce the industry, because as my doctoral advisor, Ananth Raman, who’s a retail inventory expert, would say basically, “where you place stuff matters.” And if it’s at eye level or somewhere within an eye shot, the probability of you picking up that bottle is higher than if you’re way up high or way down low. And placement inside of liquor stores is interesting and local. So having to understand that strategy and find people and position them and push was very important. And so even that push part, her strategy was important.

Brian Kenny:

So somebody’s buying it, great, because they’re interested in the story, they look at it and they bring it home. It’s got to taste good, right? We have established that. How do you make a new whiskey? How does that even work?

Hise Gibson:

I thought it was interesting because what Nearest Green is known for is the Tennessee method. The water matters, and then limestone and then using coal to sift it and to drip it through, filter it, that’s the Tennessee method. That way of lime and coal and creating filters through before putting it in the barrel to let it sit, is what makes it, Tennessee whiskey taste different than other whiskeys. And so, if we think broadly about one segment of the market, African Americans. African Americans, I grew up, I’m from Texas, I’m familiar with whiskey being Crown Royal, a Canadian whiskey. How did a Canadian whiskey become the thing that African Americans drink? I am unclear, but that’s what I knew. So, the switching cost is something that tastes better, isn’t high when okay, I can spend 30 bucks on a Crown Royal bottle or 40 bucks on this new thing that’s connected to a formerly enslaved man. Let me try that one and see how it is.

Brian Kenny:

And sometimes even that extra bump in the price gives it that sense of premium quality so you feel like you’re getting a better product anyway.

Hise Gibson:

Better product.

Brian Kenny:

Yeah, yeah. How did she find people to help her create the unique flavor that she was looking for? I know the answer, but I thought in the case it was really interesting because I don’t feel like I could just walk into a distillery and figure out what to do, but that’s essentially what happened here.

Hise Gibson:

And that’s exactly what happened here and one of the funny parts is, because when she went to Lynchburg, when she found the farm that Nearest Green taught Jack Daniels how to make the whiskey and bought it. And her realtor told her some stuff and she learned about her realtor who had been one of the distillers in Jack Daniels for years, and then stumbled upon Nearest’s daughter who worked in forensics for 20 years but had a great taste for whiskey.

Brian Kenny:

Amazing.

Hise Gibson:

It’s kind of bizarre that connection, but what you patent is the process for making whiskey, and that’s what they have, the process. So, in order to start a new spirit, it takes at least four years to create whiskey, at least four.

Brian Kenny:

Yeah, because it has to age.

Hise Gibson:

It has to age. So, what happens is normally when other distilleries have too much product, they have to get rid of it. Well, if you take that product through your method, well now it’s yours, at least as your product is aging. So, it’s very interesting. How can someone have something this fast? Well, that’s how you can do it, at least on the front end. And now if you were to go to the distillery and go into rickhouses, you will see, I know right now I can’t get 1820, which is a product out of Uncle Nearest, which is an amazing whiskey, until 2028.

Brian Kenny:

Really?

Hise Gibson:

It’s sitting in the rickhouse right now aging. I can’t wait.

Brian Kenny:

The tour is I think, interesting to talk about too, because Fawn wasn’t just creating a product here, she’s creating an experience. She has ambitions to have this be much more than just a spirit brand.

Hise Gibson:

Absolutely. Her idea is to create a place for people to come to and not only appreciate the product but appreciate the story and the region and the importance of the region to not only the state, but to this particular industry. If you go on the distillery tour, you’ll go into a place and learn about women’s suffrage. Well, what does this have to do with whiskey? Well, you would learn quickly that Tennessee was the state that flipped, was the last component to the puzzle for women to be able to vote. So that’s part of the story. And you also learn why this old horse farm is so important. Well, it’s next to water, fresh water where you can make better whiskey and the limestone in the ground makes the water better. And so, they were very strategic and are now the third-largest landowner in the state of Tennessee.

Brian Kenny:

Yeah, that’s amazing. How important was the culture that she was trying to create to the success of the brand?

Hise Gibson:

As we know, culture is everything and finding people who can do what I would call something that I learned in the military, there’s a principle that we leverage called “discipline initiative.” Quickly what discipline initiative is, is someone’s ability to react and make decisions and do things when the environment changes. When what you are ordered or told to do, you’re unable to do because the enemy forced you to do something different. In corporate settings, we want people to have discipline initiative. We want them to be able to operate and engage and be innovative. She was able to pick people and distribute them, who could operate as independent operators, and understand we’re trying to get the brand into different places. Go figure it out and do it, let me know what you need. And so, she became the ultimate resource manager, could provide enough guidance for people to operate, but then allow them to be awesome. But here’s a kicker: You have to be a contractor for a set amount of time before you can come on the team, which is a very different business model. And you would think it wouldn’t work. It works beautifully, and you have people trying to come and work for her because the culture is so good. A lot of businesses talk about being a family, but if you go and see and talk to anyone that’s part of that ecosystem, that’s what they exude, and she backs up how she operates through her actions and the support of each individual.

Brian Kenny:

It’s kind of genius because that’s sort of like an on-the-job audition, and you get to do it for a period of time and prove your worth, but at the same time you get to feel out if this is the right place for you. So it works for both.

Hise Gibson:

Oh, absolutely.

Brian Kenny: Yeah. The case talks about the fact that she’s thinking in her mind as the case opens up, she’s thinking about moving into cognac. So, I don’t know how different cognac is than whiskey. I mean, I’ve had both, but it sounded to me like a completely different set of challenges that she would encounter going down that path. I mean, beginning with finding a place to make the cognac outside of the United States because it has to be made in France, is that right?

Hise Gibson:

Absolutely. Kind of like champagne has to be made in the Champagne region, and scotch has to be made in Scotland. And we can’t call things bourbon if it’s not made in Kentucky. I mean, so same thing with cognac. In the Cognac region of France, there are families and houses that have been existing for centuries. And so for a new entrant to go into cognac is, not to say, maybe off the beaten path. Well, someone who has an unconventional background who is not constrained by mere things like geography. Will do the research, find the place, and buy 400 hectares of land in the Cognac region of France and get started.

Brian Kenny:

So she’s already done this?

Hise Gibson:

She’s already done this and is creating right now, because of the way that market is, is family owned, families feed into these large houses. But if we think about microbreweries, some of these families create their own kind of cognac because it can only be made there, they understand it, they’ve been doing it for hundreds of years. What if they could create their own as well, and feed into a larger brand? Well, the other brands don’t allow this. So she’s figuring out what drives the individuals and has pulled in a lot of those farmers who are on the land that she purchased and the most experienced master distiller of cognac in the region now works for her.

Brian Kenny:

So she’s at it again. And she’s been able to convince investors to sign onto this. How does she pitch an investor on that crazy idea?

Hise Gibson:

There’s something about, and I think we share this with our MBAs at the Harvard Business School, that business is still a human endeavor. It is still a people business, and if you talk to any of our amazing alums who are phenomenal investors and you ask them hard questions like, why do you invest in something? They will always go to a person, not the idea, the person. And they believe that person is going to create a lot of value and make them a lot of money.

Brian Kenny:

She’s got some cred because of what she’s been able to do with Uncle Nearest.

Hise Gibson:

Exactly.

Brian Kenny:

Yeah, yeah. How do you think this case contributes to the broader understanding of entrepreneurship and innovation? I mean, you’ve talked about a lot of her qualities and her unconventional background. What can listeners think about as they hear Fawn’s story? How do they relate to that?

Hise Gibson:

I think one way in which they relate to that is just thinking about the ways in which we describe leadership broadly. And so, we talk about awesome things like adaptive leadership, there’s a whole stream of research about it. We talk about things like resilient leadership. We talk about ideas like, say like strategic leadership. The kicker is that this case allows us to really think about a person who’s going through all of those evolutions at the same time and how they’re able to comport themselves in a way to adapt and be resilient, while at the same time implementing strategy, which is the hard part. When we think about leaders, there are big idea people, and people who get things done. The sweet spot are those who can make the connection between the two. I would argue that very few leaders are able to be strategically sound and operationally effective. She’s able to do both, and so the case allows for us to really understand, how does one create a playbook for whiskey that she’s about to possibly use in a similar way, in a very different environment, and still also win? We’ll see, yet to be seen, but if her past were an indication of her future.

Brian Kenny:

Yeah, I’d bet on her.

Hise Gibson:

I would bet on her as well.

Brian Kenny:

I mean, the third dimension that she operates on here is this whole aspect of purpose driven, being purpose driven. I mean, what can listeners take away from the way that she thought about bringing recognition to underrepresented people?

Hise Gibson:

I think what people can understand is that when you’re able to really do the research and connect the story to the product, you’re able to pull in people in ways you wouldn’t otherwise. And I’ll use an example when I’ve talked to friends who’ve never heard of Uncle Nearest, but like whiskey, once I tell them the story, they run to go find the product and then come back and tell me, “Oh, that was great.” And then they tell a friend. And so, as we move to the cognac, there’s got to be a story there.

Brian Kenny:

Yeah, I was thinking the same thing.

Hise Gibson:

As yet to be told, that I know exists that will come out over the next few months around the connection between African American soldiers and cognac that exists going back to World War I.

Brian Kenny:

Yeah and it has to be genuine, and I’m sure it will be, just like the Uncle Nearest story. Hise, has been a great conversation as I knew it would be. Let me just ask you to end by telling our listeners if there’s one thing you want them to remember about the Uncle Nearest case, what would it be?

Hise Gibson:

I think the one thing I’d really want listeners to remember is to think to themselves about, how do they operate? Are they focused as individual leaders, informal or formal, on always trying to be right in every way, or are they trying to be effective to meet the goals, to create more value? There are times and moments when being right is really important. I have found over my time of leading large teams in crisis situations, that the most important thing that I’ve found having operated in combat more than a couple of times, is being effective is what is required to create the most value in any situation. And so really thinking to themselves, where am I based on the decision I’m dealing with? Am I trying to be right or am I trying to be effective? And if you just break it down to that very simplistic element, you’ll probably figure out which way you need to go. And I would argue most times it’s going to be on the effectiveness track, the more senior you become.

Brian Kenny:

Yeah, I love that. Hise, thanks for joining me.

Hise Gibson:

Absolutely.

Brian Kenny:

If you enjoy Cold Call, you might like our other podcasts, After Hours, Climate Rising, Deep Purpose, IdeaCast, Managing the Future of Work, Skydeck, Think Big, Buy Small, and Women at Work, find them on Apple, Spotify, or wherever you listen. And if you could take a minute to rate and review us, we’d be grateful. If you have any suggestions or just want to say hello, we want to hear from you, email us at coldcall@hbs.edu. Thanks again for joining us, I’m your host Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School and part of the HBR Podcast Network.

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