The trickle could become a stream

23 July, 2018

BUILT FOR VOLUME

One stumbling block is that Canadian whisky’s infrastructure is built for volume rather than finesse. It may have regulatory freedom to innovate, but that doesn’t mean that many of the bigger brands have the set-up for the sort of experimental, small-batch production that has become the norm among whiskies overseas.

“These are big factories so most of the Canadian whisky companies don’t want to sell a few hundred cases,” says De Kergommeaux. “It costs as much to sell a container load as a pallet and when you are turning over a lot, it’s hard to do one-offs. Crown Royal does its small batches but no one else. Producers don’t want to go into a market unless they are sure they can meet the expectations,” he adds. “Perhaps it’s also Canadian cautiousness because there are some brands that are ready.”

With a new, but small, micro-distilling industry (about 1% of category output says De Kergommeaux) coming on stream there is optimism, fresh thinking and a feeling that the big brands need to now think both boutique and high-street.

Forty Creek, owned by Campari since 2014, is one large enough to make an impact but small enough to be nimble – it was built that way. “We were craft before craft existed,” says Chris Staresinic, vice president of marketing for Gruppo Campari Canada. “It was the first new distillery in 50 years. We took a chance on a different style of liquid, a mixture of pot and column distilled. No one was telling the story of blending, but we are. Producers need to tell the story of how good the whisky is and about its wide range of taste profiles. There’s no reason Canadian can’t be another Irish whiskey – there are parallels.”

Crown Royal, which despite selling around 7m 9-litre cases, is sold only in the US and Canada. For this brand, its Deluxe is the core expression, but the brand is leading innovation. “Whisky consumers are on the hunt for something new,” says Sophie Kelly, vice president of North American whiskeys at Diageo. “We’re playing with barrel ageing, mash bills, unique grains and limited releases.” Kelly points to the launch of Cornerstone Blend and Norther Harvest Rye, which took top spot in Jim Murray’s Whisky Bible. Murray summed up the news himself: “The quality of Canadian has been disappointing me for some time. Then Crown Royal Northern Harvest pops up out of nowhere and changes the game.

“I think other distillers out there have to have a close look at this and see if they can at least have a go at reaching where this new bar has been set. Otherwise the name of Canadian whisky will continue to decline against the high standards being set in other countries.”

While Murray is yet to be convinced at category progress, Canadian whisky is starting to innovate – how much of that will be seen outside of North America is another thing entirely. “In Canada there has been a proliferation of small-batch brands, interesting new blends and limited releases,” says Rob Tucker, senior brand manager, Canadian Club. “Examples include Canadian Club 100% rye, Canadian Club 40-year old (which sold out in less than three months at rrp $250) and Alberta Premium Dark Horse. These new offerings are driving more value in the category, not only because of their unique bolder and richer taste profiles, but also because of the premium perceptions associated with their higher price points.

“Canadian distilleries continue to innovate and are certainly meeting and creating new trends, but there remains an opportunity to introduce Canadian whiskies to consumers in markets around the world.”

Canadian Club has long appreciated the opportunity, even if it hasn’t executed growth in recent years. So, will the other big players join the fold? “We don’t have a global strategy for Crown Royal at the moment but that’s not to say that won’t change in the future,” says Kelly. “In the next three to five years year we will look at expansion.”

Forty Creek, which is North America-focused with some sales in Australia, also has a long-term plan to expand. “We’ve undergone a packaging revamp that started last October. We didn’t feel confident taking the offering outside the core markets until we had a package to meet the quality of the whisky but we can be more aggressive now. We’ll seed it in duty free.”

So, while things are happening at home, Canadian whisky still seems hesitant to get out there and join the global market. Ready or not, it needs to get out the door – opportunity doesn’t knock forever.





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