SOMEHOW a whisky speaks of the country from which it came. Scotch can be rugged, hard to get to know, but ultimately deep in personality. Irish whiskey, perhaps like the Irish, is approachable and mostly light-hearted. Japanese is complex and bourbon is big and youthfully exuberant. Canadian whisky’s mildness is surely no accident either. Certainly its mother country’s propensity for understatement goes some way to explaining the spirit’s near anonymity outside of North America.
“As a category and a country we have been apologetic about our whisky instead of saying we really make good whisky,” says Laura Bruce, senior brand manager Canadian Whisky at Pernod Ricard’s Wiser’s.
Davin de Kergommeaux, author of Canadian Whisky: the Portable Expert, agrees. “Canadians by their nature do not spend a lot of time patting themselves on the back. We know we have great whisky. We just do not talk about it. I hope that will change.”
Likely it will. The category’s owners are no shrinking violets – they are, in fact, the spirits industry’s über-groups. There’s Diageo with category leader Crown Royal and Seagrams VO, Pernod Ricard with Wiser’s, Beam with Canadian Club, Brown-Forman with Canadian Mist and Collingwood. William Grant has Gibson’s Finest and Constellation owns volume brand Black Velvet. Yet, for all this international wherewithal this 20 million 9-litre case category is very much a regional force.
But for the first time in a long while the weather vane has stirred, catching on the winds of change. Gruppo Campari’s Ä125m purchase of Forty Creek Distillery last month was not a surprise, given the group’s brown-spirit strategy, and underlined Canadian whisky’s unexplored potential. “It’s been one of if not the fastest-growing spirits companies in Canada,” Gruppo Campari CEO Bob Kunze-Concewitz says of Forty Creek. “Its major business – roughly 62% – is Forty Creek whisky, a high-end, handcrafted brand, which for six years in a row was the fastest-growing Canadian whisky in Canada. This deal is accretive from year one. It’s a very profitable brand with high margins.”
There are two parts to the Campari plan. Part one is the US, where brown spirits are hotter than the stills that produce them, and whisky has gone nuclear. “Forty Creek is extremely well positioned in the high-potential US market,” says Kunze-Concewitz. “Currently the Canadian business is four times bigger than the US business on this brand but the industry norm is the other way round – the US being eight times bigger than Canada. So in the mid to long-term there is significant up-size potential.”
According to Euromonitor International, more than three-quarters of the Canadian whisky action happens south of the Canadian border in the US, about 15% to its north, while the rest of the world makes do with a measly 7% of volume.
Surprisingly, Canadian is so big in the US, it rivals bourbon in size. “Until 2010, Canadian whisky was the best-selling whisky style in North America and had been since 1865,” says Kergommeaux. “It’s about 16.5 million 9-litre cases – it’s huge – 8% of the overall US spirits market, adds Kunze-Concewitz. Part two of Campari’s plan is about Canada. “By combining our existing portfolio in Canada as well as Forty Creek we’re going to be able to create our own distribution platform, our own in-market company, which is slated to become operational at the beginning of 2015,” says Kunze-Concewitz.
