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Canadian Whisky Players Invest To Build Category Momentum

October 30, 2019

While Canadian whisky lately has seen its best growth in the flavored segment, key marketers are undertaking a series of innovations and brand investments across pricing tiers in the core unflavored segment. Conditions remain challenging compared to other brown spirits categories, however, with the total unflavored Canadian whisky market in the U.S. slipping by 2.7% to just under 13 million cases last year, according to Impact Databank.

Market leader Crown Royal was one of only two unflavored Canadian whiskies among the top 10 brands to achieve growth last year, reaching 4.2 million cases on a 0.5% increase. In addition to the core Deluxe expression, Crown has been active with luxury editions such as its XR whisky. “This product originated from the last remaining liquid from our renowned facility, LaSalle, before it closed down,” notes brand director Nicky Heckles.

Additionally, Crown Royal’s foray into annual limited editions—the Noble Collection—has garnered critical acclaim since its 2016 debut. Both the 2017 and 2018 releases appeared on Whisky Advocate’s Top 20 Whiskies of the Year list. Excluding flavors, Crown Royal’s volume was up 0.7% in control states in the year-to-date through September.

Heaven Hill clearly sees further potential for Canadian whisky, evidenced by its pending $266 million purchase of Black Velvet from Constellation. The deal is expected to close next month. “We thought this was a good opportunity to fill a niche in the industry today and expand our portfolio,” says Hannah Venhoff, senior brand manager at Heaven Hill. “When you think about the brands that we’ve been successful with—like Admiral Nelson’s, Evan Williams, Deep Eddy, and Christian Brothers—a brand like Black Velvet fits perfectly.”

The acquisition includes all the distilling operations, aging and bottling facilities, and the remaining portfolio of Canadian whisky brands owned by Constellation, which also includes MacNaughton, McMasters, and others. Black Velvet was down 2.5% to 1.7 million cases last year, excluding its flavored varieties, and has declined 1.3% in control states this year through September. Its range includes the core NAS bottling and an 8-year-old Reserve.

Elsewhere, Proximo Spirits-owned Pendleton surpassed 300,000 cases last year on 11.5% growth, bucking the category’s sluggish trend, and increased 9% in control states in the first nine months of this year. The super-premium focused portfolio highlights the central role that rye plays in Canadian whisky. Pendleton has posted nearly 15 years of consistent growth, rising from a base of 25,000 cases. Looking forward, Pendleton plans to increase its outreach to markets across the U.S. Earlier this year, the brand launched its first national marketing campaign, a multi-million dollar push that includes television ads, social and digital media, a title sponsorship with Professional Bull Riders, and a new bottle design.

Among other leading brands, third-ranked Canadian Club, part of the Beam Suntory range, was down 4% to 1.2 million cases in the U.S. last year, while Brown-Forman’s Canadian Mist slipped 7.9% to 1.1 million cases.—Shane English

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