“This continues what we have done in Argentina, Australia and Russia, which has significantly contributed to strengthening our brand-building activity and our growth over time.”
So while Diageo is on a path to decentralising (just last month Diageo Canada enlisted distributor Wirtz Beverage Group to broker its brands), Campari is looking to take things in-house.
Either way, Canada is a strong brown spirits market, with Canadian whisky representing about 3.5m cases, some 20% of total spirits consumption.
But it isn’t all good news. “Twenty-five years ago it was 35% of spirits,” says Bruce, whose employer Wiser’s is the category’s biggest brand. “The sector has declined because the likes of vodka has increased market share. The category is relatively flat at -1%, which is good news as it had been in [more serious] decline.”
Climbing the premium ladder
According to Bruce there are four segments in Canadian whisky: Economy CAN$23-CAN$25 (35% of the category). Premium $25-3$0 (47%), the very broad Super premium, $30-$100 (10%) and flavoured whisky (7%).
Premiumisation has yet to take off in the way it has with Japanese, bourbon and Irish. “Historically a large percentage of economy tends to be consumed by older people. [In terms of growth] the economy segment has held back the category,” says Bruce.
Canadian is traditionally drunk with a mixer – cola, lemon and lime soda, juice or even ginger ale – but there are signs of a more refined future. “We are seeing the growth from super-premium,” says Bruce. “We will see the economy brands slowly die off. Wiser’s is not recruiting people into economy.”
Probably Canadian’s total sales volumes will remain static until the category’s rookie segments grow up,
such is the effect of a waning economy sector.
The real news, though, is that Canadian whisky value sales are up 17.5% in the US, according to Diageo. With 5.5 million cases, the group’s Crown Royal represents 60% of the entire Canadian whisky market in the US and, with its entry level Deluxe starting at $25 a bottle, this is a whisky that knows a thing or two about the super-premium proposition.
Crown Royal is aimed at LDA-34 and is becoming more and more multicultural in its appeal, according to Yvonne Briese, VP of marketing, whiskey, Diageo USA. “Crown Royal is unlike the rest of the category. It is a nuanced brand. It has very strong roots in the southern part of the US. Texas is its largest state – they see Crown Royal as their whisky – Louisiana is a deep-rooted Crown Royal market, Mississippi too. But also in other states with large populations such as California and New York.”
Cocktails
Cocktails are also a driving force in North America. “Cocktail culture has played an important role in the growth of whisky culture,” says Briese. “Many of the 1920s classic cocktails were made out of whisky and many were made from Canadian whisky. Rye whisky was very hot and the core of many classic cocktails. Old Fashioneds are everywhere right now.”
Pedro Berrueco, senior brand manager of Brown-Forman’s Canadian Mist and Collingwood agrees: “The rise of mixology is an important factor in the category’s growth as bartenders continue building cocktail programmes using a greater variety of spirits.
“Consumers are seeing a variety of expressions of Canadian whisky at higher price points, just as they are with bourbon and Scotch, and these premium expressions are experiencing success. There are increasing numbers of handcrafted, smaller batch Canadian whiskies, and Collingwood fits into this segment of the category.”
