Northern Exposure




While sales of Canadian whisky have been trending down for at least a decade, that decline was surprisingly ended in 2002, when the category showed a 0.5% gain nationally to 15.4 million 9-liter cases. Canadian whiskies bottled in Canada — “imports” like Canadian Clubw and Crown Royal — gained 2.9%, while products shipped in bulk and bottled in the U.S. fell 1.0%. However, ad expenditures rose for the entire category by a healthy 28.7%, to $32.9 million, which may help explain where some of the positive momentum is coming from. Now, marketers are looking to advertising, promotions and relationship building to keep that momentum going. And, it appears that the arrow continues to point up throughout most of 2003.

Crown Royal, of course, has been leading the way with sales of more than 3 million 9-liter cases nationally in 2002 (up 7.6% over 2001), more than double that of its nearest competitors, Allied Domecq Spirits USA’s Canadian Club, at nearly 1.4 million (up 1.5%). Seagram’s VO, from Diageo, was a hair’s breadth behind, but saw a slight year-to-year sales decline.



While the category itself remained “pretty much stable” last year (in 2003), according to Jim Lorenz, U.S. brand manager for Crown Royal and Crown Royal Special Reserve, growth came mainly in the premium area. That’s where Crown Royal plays, and the brand was on course to have a “fantastic year” in 2003, Lorenz said. Depending on market, the brand retails for $19.99 to $24.99 for a 750 ml Special Reserve sells for $30 to $35.


Halid Izzet, brand manager for Allied Domecq’s Canadian Club, said he sees “a bit of a turnaround in the Canadian whisky market. From the latest Nielsen figures, what we can see is that the total whiskey category is stabilizing after five or 10 years of pretty constant decline… and Canadian whisky is starting to rebound; it’s moving into positive figures.”

For Canadian Club, he cited remarkable Nielsen statistics: a 52-week average of +2.3%, with the brand up 7.5% for the past 26 weeks, 12% over the last 13 weeks and 21.4% in the last month.

“The Canadian whisky category is fueled by the ease of the drink and the resurgence of the classic cocktail,” said Joe Karcz, group product director for Jim Beam Brands Co., which markets Windsor and Kessler brands. “Canadian whiskies have long been known for their smooth, light flavor, making them ideal for cocktails.”

“The category had declined quite a bit over the last few years, (but) those declines seem to have moderated,” said Dan Kelley, brand director of Brown-Forman’s Canadian Mist. “I think there’s some new interest in the category.”


“In terms of growth, I think there is still a significant amount of share stealing going on,” said Jack Kavanagh, vice president, marketing services at Barton Inc., which markets Black Velvet, Black Velvet Reserve and Canadian LTD. “That’s where a lot of the growth is coming from… with the exception of Crown Royal.”

Black Velvet and Canadian LTD grew nominally over the last year (2003), he added, while the company’s other brands were flat. The year just passed was Black Velvet Reserve’s first in national distribution, and Kavanagh said executives were “very pleased with it.” BV Seductively-CC

Black Velvet is continuing brand-building activity in 2004, including some consumer rebates.

The strategy for Black Velvet throughout the past year was to continue building the image of the brand with the support behind it. That included a golf program in the spring that Kavanagh termed “very successful.” Another initiative included an ongoing rodeo program that began last January and ran throughout the calendar year. It will continue throughout 2004.


“Really what’s helping drive the brand is that we continue to execute on an advertising campaign we’ve had for about 30 years,” said Lorenz. “We continue to reinforce that. We’ve been building a strong connection with our consumers through a relationship marketing program we have called, “The Society of the Crown.” We have the ability to connect with (them) through both e-mail and direct mail.”

crown royal display
Crown Royal is accenting “It’s All in the Bag” merchandising campaign.

The brand’s annual sales are on course to rise about 8% in 2003, said Lorenz. “The strength of Crown Royal really lies in its premium positioning,” he noted. “We’re benefiting from the growth of premium spirits overall.”

A promotional program stemming from the purple bag is called, appropriately, “It’s All in the Bag.” Running both on- and off-premise, it “plays again around the adoration that consumers have for Crown Royal and the bag,” said Lorenz. Consumers have the opportunity to write in and say how they use the purple bag in unique and interesting situations. A contest connected to the program will give winners a chance to choose from a warm-weather getaway, a ski trip or a shopping spree.

The brand’s mix of national and local advertising will continue. For the holiday season just passed, Crown Royal offered a value-added pack that contained a pair of glasses and accompanying premium wooden coasters.


Canadian Club’s Izzet is encouraged by the fact that “with each month, we’re seeing more momentum in the brand.” Allied Domecq executives have realigned into what they term a “Move to Market” strategy. The result, said company spokesperson Jack Shea, is that “instead of having a national sales force selling Canadian Club, it’s sold by three different business units — one for control states, one for northern states and one for the south.”

Part of the new strategy enabled the company to add 100 retail account managers, who now more closely monitor competitive pricing and help the brand both react more quickly and anticipate changes.

Canadian Mist has garnered attention with the introduction of a 750 PET package. The brand successfully debuted its 1.75 liter PET “Easy Pour” bottle three years ago; the new package is being affectionately referred to within the company as “Son of Easy Pour.”

The proprietary design includes a special thumb grip. “We think this is really going to capture the consumer’s attention,” Kelley noted. Brown-Forman is spending half a million dollars just for television — the first time it has taken to the airways with Canadian Mist.


(Thousands of 9-Liter Cases)

Brand Type Supplier 2001 2002
% Change
Crown Royal FB Diageo 2,842 3,058 7.6%
Canadian Club FB Allied Domecq Spirits USA 1,330 1,350 1.5%
Seagram’s V.O. FB Diageo 1,356 1,320 -2.7%
MacNaughton FB Barton Brands 192 187 -2.6%
Royal Canadian FB Pernod Ricard USA 108 107 -0.9%
Total Leading Brands 5,828 6,022 3.3%
Others 295 276 -6.4%
Total FB Canadian 6,123 6,298 2.9%
Canadian Mist USB Brown-Forman Beverages 2,322 2,287 -1.5%
Black Velvet USB Barton Brands 1,832 1,766 -3.6%
Windsor Supreme USB Jim Beam Brands 1,219 1,205 -1.1%
Lord Calvert USB Jim Beam Brands 625 625 0.0%
Canadian LTD USB Barton Brands 654 607 -7.2%
Total Leading Brands 6,652 6,490 -2.4%
Others 2,496 2,563 2.7%
Total USB Canadian 9,148 9,053 -1.0%
Total Canadian Whisky 15,271 15,351 0.5%

FB=Foreign Bottled; USB=U.S. Bottled Source: Adams Liquor Handbook 2003

In addition, during 2004’s first quarter, Canadian Mist is kicking off a hockey promotion at the point-of-sale with logoed hockey jerseys and hockey goal displays. It will also use small, hanging inflatable logoed zambonis as well as logoed zamboni key chains.

According to Jim Beam’s Karcz, the category as a whole “needs to raise its visibility and take advantage of those opportunities.” During the first quarter of ’04, Jim Beam will place increased support behind its Windsor and Kessler brands, including advertising, improved packaging and expanded support behind key sponsorships.

Ultimately, maintaining a positive sales momentum for Canadian whisky depends upon these and other supplier efforts, as well as retailers recognizing that Canadian is not a moribund category. It still comprises 10% of all spirits sales in the U.S. and, as the latest sales figures show, deserves to be merchandised as a growing category. *


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