On The Horizon

Stale? Outdated? Washed up? Not Canadian whisky.

The spirit may have deep roots, dating back to the 18th century and gaining prominence during the Prohibition era, but it’s far from riding off into the sunset. Instead, Canadian whiskies are finding themselves in a sort of mild renaissance. Until recently, they had a diminishing shelf presence as the category’s demographic aged and consumer tastes among whiskies shifted more to bourbon and Scotch.

But that’s all history. “Consumers are starting to become interested again in the Canadian whisky segment,” says Kevin Richards, Canadian whisky brand manager at Sazerac. The segment once topped the distilled spirits industry, but it still holds strong with 33.6% of total whiskey sales and 60.6% of imported whiskey sales, according to the 2011 Beverage Information Group Liquor Handbook.

Manufacturers, in turn, have responded to this increased consumer interest. What started with new product launches – Caribou Crossing, Royal Canadian, Crown Royal Black, Canadian Mist Black Diamond and Revel Stoke to name some – in 2010, only continued with refreshed packages, more market availability, and experimentation with flavors and premium offerings in 2011. And moving into 2012, more of the same is to be expected. “We are very much looking for ways to bring some new things to the marketplace, to bring some younger consumers into the franchise, and start to turn around what is about flat growth and start that off on a positive note,” said Chris Huels, marketing director for specialty wine and spirits at Constellation Brands.

Initiating Innovation

The category that once lacked unique expressions and innovations now embraces them, aiming to use them to attract new consumers. “Canadian whisky is an exciting category with a number of key trends driving awareness, trial and growth,” said Yvonne Briese, VP of marketing, Diageo North American Whisky. 

Joe Murray, senior brand manager for Brown-Forman Canadian Whiskies, describes the category as in transition. “There was the Crown Royal Black launch, which opened the door for other premium-plus Canadians,” he explained. “This leads to an exciting, growing segment of Canadians, and the introduction and growth of new premium-plus brands.” Besides Crown Royal Black, there are Collingwood, which both debuted last year from Brown-Forman, plus Pendleton, Forty Creek, and several others that have been on the market a few years. In addition, other venerable brands like Canadian Club have for years presented a portfolio that includes superpremium expressions. Now, there are lots of others to choose from.

The category may have been slow boarding the innovation bus, a reason behind its stagnant results of late, but that’s not to say that change isn’t coming. Or more of it, considering 2011 saw several initiatives. “Whether aging established brands for longer or rebranding packaging, Canadian whisky is evolving and becoming a ‘cooler’ spirit which competes with top U.S. brands,” says Bob Gorman, director of brand marketing for Canadian Club.

Take Constellation Brands’ Black Velvet. In terms of sales volume, the brand is second to Crown Royal and ranks as the 22nd best-selling spirit in the U.S. Whether it’s the new packaging or revamped label, two improvements the brand took in 2011 to stay with the times, the success is showing. “It’s just a little more simple, a little more upscale look, a little more modern look,” marketing director Huels said. “It’s very core to the Black Velvet brand, black and gold, and we’re still talking about being an imported product from Canada.”

According to Kevin Richards at Sazerac, the value-priced brands in Sazerac’s portfolio, Canadian Hunter, Rich and Rare, Northern Light, and Canadian LTD, are outpacing what they believe the category trends to be and have seen a good year volume-wise. The success of Rich and Rare led Sazerac to introduce Rich and Rare Reserve into 15-20 markets last year. “On the strength of the brand we decided to come out, within the last six months, with a line extension called Rich and Rare Reserve,” Richards said. “It’s a bit more of a premium version of Rich and Rare. We’ve dolled up the packaging quite a bit. It is different whisky, it’s a little bit older….It’s just a more complex whisky product.”

But the brand didn’t stop there. In spring 2012, Sazerac plans to refresh Canadian LTD’s label. “It’s not a major change but just something to do to update the look of the brand,” Richards said. The company is currently working on a creative platform for Canadian Hunter to create more awareness among consumers.

And they recently updated the label for Northern Light. “Again, it has more of an updated 2011 kind of a look,” he continued. “So we’re expecting really good things from those four stable Canadian whisky brands of ours.”

Onward and Upward

“As brands look to grow their customer bases, we’ve seen a few key trends emerge -the biggest being the shift to higher-quality, premium products,” noted Gorman of Beam Global. “Over the last year, we’ve seen the Canadian whisky category undergo a shift to premiumization.” Canadian Mist offers Canadian Mist Black Diamond, which was introduced in 2010, and retails slightly above its originator ($15.99 versus $11.50). Blended at 86 proof, Black Diamond’s flavor is enhanced by its higher sherry and rye content. Then there’s the February 2011 introduction of Collingwood, Brown-Forman’s mellowed-with-maplewood superpremium offering. It features a unique flavor and smoothness from the maplewood, the only Canadian whisky with that distinction, the company says. There’s also the unique, upscale packaging with an over-cap, flask shaped bottle with a sleek label. Blended at 80 proof, the 750 ml bottle retails for $26.99.

Black Velvet introduced its Reserve line more than 20 years ago, seeing growing amounts popularity as favor shifts toward the more premium products. As previously noted, the superpremium line extension, Crown Royal Black, has shown great promise in its second year on the market. “One trend, the emerging popularity of bourbon, was part of the inspiration that led to the launch of Crown Royal Black,” Briese explained. “It embodies the signature smoothness of Crown Royal, but it is darker and more robust because of the bourbons in the blend.”

Diageo took another trend, flavored whisky, into the fold with Seagram’s 7 Crown Dark Honey and Stone Cherry. “Flavored whisky is also a dynamic trend, which we have ventured into as well,” Briese said.

Sazerac’s recent brand introductions, namely Caribou Crossing and Royal Canadian Small Batch in spring 2010, speak to the premium market with hand-selected barrels and their higher price points, $49.99 for a 750 ml bottle of Caribou Crossing and $24.99 for a 750 ml bottle of Royal Canadian.

Not to exclude Canadian Club, but the brand already has six expressions and looks to add one more to the fold in 2012. “Touting its high quality flavor and unique blending processes, we will look to grow our whisky fan base in 2012 through strategic marketing campaigns and the launch of a new product-tactics we hope will intrigue consumers and encourage them to try Canadian Club,” Gorman explained.

More to the Mix

In September, Sazerac announced that it was purchasing 17 Corby-owned brands from the Canada-based Corby Distilleries Limited. For Sazerac, the transaction added another whisky to its portfolio, Silk Tassel Canadian Whisky, and for Corby, it offered the opportunity to target and focus more on the brands it still owned like Wiser’s Canadian Whisky. “We had some brand overlap in certain spirit categories and this transaction helps us streamline our portfolio with a more focused and targeted collection of brands, as part of our brand prioritization strategy,” said Patrick O’Driscoll, Corby president and chief executive officer.

Sazerac’s not the only company looking to build its Canadian whisky portfolio. “While we are looking at several different directions, for the short term we are focused on building our overall Canadian portfolio,” Brown-Forman’s Murray said. “Part of that is getting Collingwood and Canadian Mist Black Diamond up and running while stabilizing the Canadian Mist franchise.” Collingwood was first introduced in Florida, Kentucky, Louisiana and Texas, and is starting to add more market availability now.

Regionalized Success

What has always been an interesting dimension to the Canadian whisky category has been the strength some brands show in specific markets. For example, Black Velvet is a top-selling spirit in Iowa, and Sazerac’s Rich and Rare is the leading spirit in Washington and Alaska.

For Beam Global, Windsor Supreme is ranked sixth in sales volume among all Canadians, according to the Beverage Information Group, partly due to its popularity in Minnesota and Pennsylvania. Similarly, Lord Calvert posted a strong showing in Florida to rank ninth among all Canadians. “Windsor and Lord Calvert continue to be local jewels with strong regional strength in several markets across the U.S.,” Gorman said. “Just like Canadian Club we will continue to provide high-quality products and innovate to stay ahead of a competitive marketplace.” 

The Social Network

Whether it’s through education, promotions or social media, Canadian whiskies are making connections to consumers and influencers. “Beam has embraced the social media channels as a way to connect with a variety of audiences-consumers, influencers, media alike,” Gorman said. “Leveraging Facebook and Twitter as our major communication tools, we can share various information with our fan bases, including brand news, interesting industry happenings and recipes.” Crown Royal concentrates on markets where the brand has strong consumer affinity. Briese said they also give back to the communities there. “To that end, we have just recently launched an extended program focused at supporting military and other everyday heroes,” she said. The Crown Royal Heroes Project honors and recognizes the nation’s heroes, raising money for various deserving charities, sending care packages to troops stationed overseas. It culminates at the Indianapolis Brickyard NASCAR race where the brand will put a hero’s name on the race. Jermaine Dupri, the record producer, song writer and rap artist, recently became a spokesperson for Crown Royal and toured the country on the 14-event The Crown Life program, which encouraged consumers to celebrate life their own way.

At Brown-Forman, social media use is still growing for Canadian whisky. “We are very early in our use, and plan to expand,” Murray said. “We are looking at these new places to reach, reinforce and begin to maintain ongoing dialogue with our consumers.”

Black Velvet created that dialogue with its touring recreational vehicle, an experiential consumer outreach campaign that ran for four months in 2011. “The Black Velvet RV has been driving around the country to various markets, attending events at retailers, big consumer events, on-premise events, bars, restaurants,” Huels said.

What’s Next?

“Consumers are becoming curious about rediscovering this once very popular segment of the beverage alcohol store,” stated Drew Mayville, Sazerac’s master blender.

And that curiosity only spells future announcements by the brands as a way to keep that interest, acquire new fans, and enhance that discovery. “Canadian Club is constantly listening to customers and looking to answer their demands,” Gorman explained. “There will be some big announcements in 2012 that we hope will please our drinkers and encourage new consumers to try the expressions.” Likely, that’s also true for other Canadian producers, hoping to gain momentum in the ever-competitive whisky market.       


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