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Regal Apple Emerges As A New Growth Driver For Crown Royal

November 6, 2015

Diageo’s Crown Royal Regal Apple experienced instant success in the flavored whisk(e)y segment after launching just under a year ago, and the upstart continues to be a strong driver of growth for the market’s largest Canadian whisky franchise. The Regal Gala apple-flavored whisky ($25 a 750-ml.) reached 129,000 nine-liter cases in the U.S. by year-end 2014, earning Impact “Hot Prospect” status, and progress has kept up at a torrid clip since then.

Nielsen data for the 12 weeks ending September 12 ranks Regal Apple as the number-two flavored North American whisk(e)y by dollar sales and shows that it’s driving 57% of value growth within the segment. Diageo CEO Ivan Menezes told investors recently that more than 1 million cases of Regal Apple had been shipped, with depletions nearing 900,000 cases.

The rise of Regal Apple boosts growth prospects for a Crown Royal range that increased 0.7% to 4.28 million cases in the U.S. last year, including flavors, according to Impact Databank. After expanding by 13% from 2005-2010 despite the effects of the Great Recession, Crown Royal advanced only 3% from 2010-2014, although it has managed to stay in positive growth territory each year during that span.

Regal Apple’s top markets include Texas, Florida, California, Louisiana, South Carolina and Georgia, mirroring the core Crown Royal brand as well as fellow flavor extension Maple Finished. “The core Crown Royal Regal Apple drinker is a social, multi-culturally diverse LDA adult who is open to flavored spirits across the category,” says Crown Royal brand director Matt Pechman. “We’ve seen this demographic grow to include not only new-to-the-category drinkers but also our loyal base for Crown Royal Deluxe.”

Surprisingly, Regal Apple’s success has occurred without widespread cannibalization within the Crown Royal franchise. In fact, through the first eight months of 2015, sales of the core Crown Royal brand were up by 1.3% in NABCA channels. Crown Royal Maple, a flavor extension Diageo launched in 2012, has lost ground amid Regal Apple’s surge, but since Maple is only a fraction of the size of its fellow extension (Regal Apple sold roughly 164,000 cases in control states in the first eight months of the year, while Maple sold less than 12,000 cases), that trend hasn’t had much of an impact on overall health of the franchise.

While it’s off to a strong start, Regal Apple faces its share of competitors in the fast-rising flavored whiskey space. Amidst a host of launches covering flavor profiles like cinnamon, honey and cherry, Beam Suntory recently introduced an apple extension on its Jim Beam Bourbon brand, retailing at $15.99 a 750-ml.

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