The trickle could become a stream

While innovation is creating a buzz around quality Canadian whisky, it’s up to the brands to get their products out there. Hamish Smith reports

THE CANADIAN WHISKY category is big in volume but not in personality. It has a quiet, unassuming presence in the global drinks industry – known but not renowned, its brands familiar to the eye but not necessarily the palate. Most have it down as ‘easy-drinking’, a term of dubious praise that lives in the same block as ‘approachable’, ‘crowd-pleasing’ and ‘inoffensive’. It’s a safe space in which to exist but, given the new quality and diversity of the category, Canadian whisky has to do more, get out more and make its mark in the wider world. Amid a global whisk(e)y boom, there’s never been a better time.

Canadian whisky has long had heavy legs. Unlike other categories that earned their stripes overseas, Canadian whisky made its name over the fence in the US, proliferating during and after Prohibition when the bourbon industry was on its knees. To this day the US makes up about three-quarters of the category’s 21m 9-litre cases – nearly all the rest is sold in Canada.

A regionally-honed category is nothing new, but in the case of Canadian, it doesn’t make sense. The big brands of the category are all owned by major international groups that have the distribution to take Canadian global should they be inclined. Crown Royal is in the Diageo stable, Wiser’s is part of Pernod Ricard, Gibsons belongs to William Grant & Sons and the fast-growing Forty Creek is with Gruppo Campari – all sell nearly entirely in North America. Of course, there is always an exception – Beam Suntory’s Canadian Club uses its passport (it has 30 stamps and counting), but in recent years hasn’t exactly led the way, with flat volume sales for 10 years when world whisk(e)y has flourished.

PREMIUM GAINING GROUND

But things are evolving. The category is growing at about 1% (Euromonitor International) with lower-end brands such as Canadian Mist and Black Velvet losing volumes and the premium brands gaining ground. New expressions and limited editions are also now frequent. Indeed, in Canada and the US the underlying trends are premiumisation, innovation and a lot of optimism.

Davin de Kergommeaux, author of the book Canadian Whisky: The New Portable Expert, has witnessed the step change over the past three years. “It’s the quality whisky that’s taking off,” he says. “The big brands are going back to bold whiskies – you had to grab a case of the 40-year-old Canadian Club it sold out so fast. The new 35-year-old Wiser’s is staggeringly good. Producers are going back to the style before the vodka craze.”

De Kergommeaux is referring to the malaise of the second half of the 20th century, when white spirits ruled in North America and consumer preference was geared to neutral. Canadian whisky forgot what it was. But it has awoken, says De Kergommeaux. He points to Canadian whisky’s unique production process and lack of regulation, making it adaptable and diverse. How so? You can compare Canadian whisky production to blended scotch as it is generally a blend of two spirits: base and flavouring whisky. Base whisky is distilled to a high strength, like Scottish grain, and is a lighter spirit, while flavouring whisky is commonly distilled to a lower strength, producing characterful spirits, similar to the role malt plays in blended scotch. De Kergommeaux says he detects a move towards the use of more flavoured and less base whisky, creating a “more robust” product.

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.