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Amid Regal Apple’s Success, Crown Royal Keeps Betting Big On Flavors

October 6, 2016

With its Regal Apple extension soaring to lofty heights, Canadian whisky brand Crown Royal continues to bet big on the flavored segment. Brand-owner Diageo is currently launching Crown Royal’s latest extension—Crown Royal Vanilla–across the U.S. market. The rollout is being promoted with a TV ad campaign featuring comedian J.B. Smoove from “Curb Your Enthusiasm.”

Crown Royal Vanilla (70 proof) retails for $22-$27 a 750-ml., along with the core brand and flavor extensions Regal Apple, Maple and Honey, which was introduced this past summer.

Crown Royal carried the Canadian whisky category for years, achieving strong growth as the overall field lagged in the U.S. market. From 1995-2008, Crown Royal’s sales more than doubled while the Canadian whisky market contracted by nearly 10%, according to Impact Databank. Crown Royal’s market share rose from less than 12% to nearly 28% during that period. Its dollar share growth was far greater, as it retails at more than twice as much as most competitors.

However, Crown Royal lost ground amid the economic downturn, and only made modest progress in the years after. Aiming to reinvigorate the brand, Diageo entered the flavored segment in 2012 with Crown Royal Maple. Maple got off to a fast start but quickly fizzled, as consumers appeared far more interested in cinnamon-flavored whiskies like Fireball. In the latter part of 2014, Diageo unveiled Regal Apple, which rocketed to growth and hasn’t looked back.

After selling around 250,000 cases in the last few months of 2014, Regal Apple soared to 1.25 million cases in 2015—a remarkable achievement for a spirits brand in its first full year on the market. Regal Apple’s sharp rise has continued this year. The brand was up by 26% in control states through the first seven months of 2016, according to NABCA, and enjoyed a 27% bump in IRI channels for the 36 weeks ending September 4. That growth has occurred even as a flood of apple-flavored whiskies have entered the market, aiming to capitalize on Regal Apple’s success.

Meanwhile, the core Crown Royal brand continues to struggle. Its volume fell by 3% last year, dipping below the 4-million-case threshold for the first time in nearly a decade. In 2016, it’s down by 1%-2% in both IRI channels and control states. But given Regal Apple’s surge, the Crown Royal franchise is among the healthiest in the U.S. spirits market. Diageo is hoping to get similar results from Crown Royal Vanilla. —Peter Zwiebach

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