Canadian whisky continues to perform well in the control states overall, and is particularly strong in several regions. In fact, the category represents 11.8% of all spirits consumed in the control states, versus 9.0% in the open states. Moreover, the control states boast three Canadians — Black Velvet, Crown Royal and Canadian Mist — among their top-selling spirits brands. This compares to just one, Crown Royal, for the U.S. overall.

The Royal Gingersnap

Canadian whiskies are smooth spirits that can be readily blended with a number of mixers, flavors and cordials. This cocktail was created by master mixologist Dale DeGroff for Crown Royal. To prepare it, start by frosting the rim of a rocks glass with powdered cinnamon and sugar. Muddle 1 slice orange and 1 maraschino cherry together with 1 bar spoon orange marmalade and 2 dashes ginger syrup in a mixing glass. Add 1 1/2 oz. Crown Royal and ice. Shake well and strain into the rocks glass over ice. Garnish with flamed orange zest. PHOTO COURTESY OF DIAGEO

In 2003, Michigan, Washington and Ohio were among the top 10 state markets nationwide in terms of Canadian whisky consumption. Pennsylvania has been ranked 12th and North Carolina came in 13th, on a national level. Also, five control states have placed among the top 10 in Canadian per capita consumption, nationwide: Wyoming ranks fourth, New Hampshire fifth, Montana has sixth place, Washington came in ninth and Idaho took 10th place.

The Canadian category overall continued its comeback from a slump that ended in 2002, with sales gains of 0.4% in 2003 to 15.4 million 9-liter cases, on top of 0.5% the previous year. In the control states, total category sales were upped by 1.2% in a rolling 12-month period (Sept. 2003 to Sept. 2004), compared to the previous 12-month period. Foreign-bottled sales in the control states were also up, by 3.6%. However, U.S.-bottled Canadians in the control states did not fare as well, and saw a 0.2% decline during the same period.

Allied Domecq’s Canadian Club family saw sales rise in 2004. The brand recently completed a “Find the Case” promotion in 22 markets.

Industry experts attributed a good part of category growth to superpremium line extensions, such as Crown Royal Special Reserve (up a whooping 18.2% in 2003) and Black Velvet Reserve.

Although brand results varied for 2003, Crown Royal, the market leader, continued to outperform nationally and in the control states. Nationally, the brand in the purple pouch realized gains of 4.8% to 3.1 million 9-liter cases in 2003. It also moved ahead in total distilled spirits as well, from eighth to seventh place in the rankings. In the control states, Crown Royal achieved a substantial 6.9% gain (for rolling 12 months, Sept. 2003 to Sept. 2004).

Nationally, Black Velvet increased sales by 3.5% in 2003, and by 2.0% in the control states (same rolling period as above). Indeed, Black Velvet is now the top-selling Canadian whisky in the control states. Canadian Club added 1.9% to its sales nationally, but declined by 1.6% in the control states.

Advertising expenditures for the category overall, after surging by 28% in 2002, fell by 9.6% in 2003 to $29.7 million. But even so, in 2003, the category made gains in spending in the increasingly popular broadcast arena. Four Canadians advertised in broadcast, and two, Crown Royal and Canadian Club, spent more there than the year before. Suppliers are keeping up the momentum they’ve gained with increased consumer visibility, sponsorships and a spate of innovative off-premise promotions for the first quarter of 2005.

Progress Made in 2004

Category brand managers said progress was made in their sales goals last year. Jim Lorenz, U.S. brand manager for Crown Royal and Crown Royal Special Reserve, said the “total category has shown growth” in 2004.

Crown Royal, from Diageo, is featuring this Super Bowl-themed promotion, among other merchandising materials.

Lorenz also said that while he is “encouraged” by this growth trend for Crown Royal and “expects it to continue,” the brand is challenged by competition from outside the category. The brand “competes with all premium spirits and that is where we focus our attention. We know the discerning consumer will appreciate our fine product and we want them. This is where we see our growth,” he stressed.

At Canadian Club, “sales grew in our fiscal year 2004 for the first time in many years,” said Suzy Kilgore, brand manager for Canadian Club, Allied Domecq Spirits North America.

Kilgore agreed that overall category growth is coming from the premium, rather than value brands. “This has been evidenced by the growth in some of Canadian Club’s higher marques, such as Reserve and Classic 12,” she noted.

Black Velvet also increased sales in 2004, said Jack Kavanagh, vice president, marketing services at Barton Inc., which markets Black Velvet, Black Velvet Reserve and Canadian LTD. Black Velvet Reserve “grew exceptionally” in 2004, by roughly 40%, he said. “The distribution of our Reserve has become a focal point for us. And of course we re-packaged it a year ago.”

And Introducing….

Black Velvet has some exciting new promotional plans of its own. The brand is introducing a new face to represent it, fitness model Rachel Moore, who will appear in all of its advertising and marketing materials in 2005. Rachel, also a blonde, takes over from Carol, who appeared in Black Velvet ads for three years. “Carol was great for us. But we needed to do something different to take advantage of the fact that we’re putting the brand out there.”


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