Looking to inject new life into a staid spirits category, Canadian whisky marketers are stirring up interest by capitalizing on the cocktail craze and the maturing tastes of aging baby boomers. They’re hoping that the Manhattan and other sophisticated whisky-based cocktails will help them appeal to a new generation of consumers.
“Look at younger consumers and what the trends are with mixed drinks and cocktails,” observes John Hartrey, manager for Seagram’s VO (Canadian) and Seagram’s 7 (American blended). “The VO Manhattan is a very palatable drink and very fashionable.”
The observation is not lost on the other leading marketers of Canadian whisky. Nonetheless, Canadian whisky remains a study in contradictions.
How is it that the third largest category among total distilled spirits that represents more than 11% of total liquor consumption and accounts for more volume than Scotch and American blended whiskies combined, can have an identity crisis?
While some on-premise retailers may be able to articulate a few of the category’s more salient characteristics, it’s unlikely that many consumers could describe many of its attributes or imagery. In comparison, a twenty-something tequila drinker who has never tasted bourbon would likely be able to name some brands or associate the product with its Kentucky roots. Or a vodka drinker, when asked about Scotch, could probably relate some of the category’s history and heritage. But ask the average consumer about Canadian whisky. The answer is likely to take the form of a puzzled look.
“Scotch has its own identity because it’s an import and it’s from a particular place,” explains Hartrey. “But when you get into North American whiskey, consumers are at two ends of the spectrum — they’re either knowledgeable or it’s a complete blur. They know it’s a whisky but they’re not sure of the nuances.”
Yet it is the nuances that help set Canadian whisky apart and hold part of the promise for the category’s future. “Canadian is easier to drink than other whiskies. It is smoother, it mixes well and has a different taste profile than Scotch, Irish or bourbon,” explains Brown-Forman’s Dan Kelley, brand general manager for Canadian Mist.
The smooth taste of Canadian whisky, which proponents say is one of its most appealing attributes, may explain why women make up a greater proportion of its consumers than for either bourbon or Scotch. In addition, the mellow, relatively easy-to-drink taste of Canadian is something that many marketers say will play a role in attracting younger consumers.
“Canadian whisky does provide an interesting stepping stone for consumers in the new millennium,” observes Ed Gaultieri, vice president, marketing, Barton Brands, one of the country’s largest suppliers of Canadian whisky. Although many baby boomers are primarily consumers of white spirits, Gaultieri says, “we’re starting to see as they get a little older and have more disposable income that they are also looking for something with more flavor. They’re not ready to leap from vodka to bourbon or Scotch all in one fell swoop, but Canadian whisky, which is lighter tasting, provides a stepping stone.”
Figuring out a meaningful new rationale — and effective ways to communicate it — are among the most difficult challenges facing Canadian marketers today. While some of the category’s leading brands have been able to maintain a relatively loyal consumer base, others have devolved into commodity items sold almost solely on the basis of price. Many longtime Canadian consumers, who came of age during the 1950’s and early 60’s, are not being replaced by younger consumers.
In addition, whatever prestige may have been associated with Canadian’s “imported” designation has long since evaporated. In the heyday of whiskey consumption, the “imported” moniker allowed Canadian whisky to position itself as an upscale alternative to blended US whiskies.
“The whole cachet of being ‘imported’ has been lost,” says Matt Wiant, vice president of marketing, classic spirits, at Allied Domecq. But more problematic is that, “When I talk to my friends about Canadian whisky it just doesn’t mean anything to them. Scotch has a distinct image. Bourbon has a distinct image. But not Canadian whisky.”
Part of the problem, he believes, is that much of the imagery that does exist — “pictures of guys drinking whisky in a bar and slapping high-fives, or going fishing, or going out with their buddies” — is just “not aspirational for people considering new spirits today.” He contrasts some of the stale Canadian images with markets such as Spain and Argentina where “the whisky category is on fire.” In those markets, he says, whisky is “fun, mixable and being consumed in fun places. The images being used in other parts of the world are working, but the images here are not driving the segment.”
The category’s #1-selling brand and the best-selling imported whisky among all distilled spirits in the US, Canadian Mist is continuing to ramp up its ad spending. Ad spending grew from about $5 million in fiscal 1999 to $7 million in the current fiscal year with plans to hit $8 million by 2002. “This shows the commitment of Brown-Forman to this brand,” says brand general manager Dan Kelley. “They have given us all the resources we need to compete in the marketplace.”
The ad campaign is designed to highlight the brand’s “smooth, light taste as well as the lifestyle of our target consumers.”
The #2 Canadian whisky in terms of case volume, and the #1 “foreign bottled” Canadian in the US, Crown Royal distances itself from its origins and focuses on its appeal as a super premium spirit. “Consumers choose brands, not categories.” says Neil Gallo, global director, Crown Royal for Seagram Spirits & Wine Group. “Crown Royal is a brand all its own with its own personality and character.”
Nonetheless, Crown Royal is one of a handful of whiskies that have shown consistent growth over the past decade. Crown Royal spent more than $10 million on measured advertising in 1998, according to the authoritative Adams Liquor Handbook, which was more than twice as much as the second-biggest spender, Canadian Mist. In addition, Crown Royal will be looking for new opportunities via the internet. “The internet, over the last three years, has been a real eye-opener,” observes Gallo. “Seagram as a whole has embraced the internet … it will be interesting to see just how much of a business-enabler the internet will become for the wine and spirits industry.”
The Black Velvet girl, dreamed up in the late ’50s is back in a big way and with an important but subtle shift. Barton Brands, which acquired the brand earlier this year, has markedly increased spending for one of the industry’s oldest and best-known campaigns. Says Barton’s Ed Gaultieri, “We’re going back to what made the brand great — the Black Velvet girl — and we’ve added in the USP (unique selling proposition): ‘Smooth As Velvet.’ It’s a way of saying it’s smoother in a very substantial way.”
Introduced in 1914, Seagram’s VO is one of the best known brands in the category. Although ad spending has been reduced in recent years, the brand still has a loyal following “who appreciate the taste and quality of the blend,” says Seagram’s John Hartrey. “The question for the future is to solidify that franchise and obtain new users among people who may outgrow other categories.”
This year, Seagram will concentrate on expanding the successful rollout of VO Gold, which, at last count, was available in 37 states.
One of the most promising new entries in the category is Canadian Club Sherry Cask. Finished in hand-selected wooden casks that impart some of the distinctive and sweet flavors of Spanish sherry, “Sherry Cask takes Canadian whisky and makes it even more accessible,” Allied Domecq’s Matt Wiant says. “Everyone who tastes it likes it. Even if they are not whisky drinkers they are pleasantly surprised. I think it will have legs. The key is to get people to try it.”
Meanwhile, an intensive effort to reinvigorate the base brand is underway. It’s an effort that was worked on during 1999 but that, according to Wiant, didn’t go far enough — “it wasn’t ‘breakthrough,'” he says. “This company is committed to Canadian Club. It is a huge brand with a loyal base of users and we’re committed to finding the right way to reposition it and re-energize it.”
The sixth best-selling brand, Windsor Supreme is #1 in several key Canadian whisky markets — Pennsylvania, Wisconsin, Minnesota, North Dakota and Nebraska.
Last month, Windsor began hosting the Fourth Annual Search for the Ultimate Ice Fishing House in Minnesota. Described as “incredibly successful” in reaching the brand’s consumer, it has also generated publicity including mentions on ESPN and USA Today.
A small brand with big possibilities, Tangle Ridge represents one of the most promising opportunities for Canadian whisky — the market for “hand-crafted” super premiums. Introduced in 1996, shipments of Tangle Ridge were up more than 50% in 1999 over the previous year (albeit from a small base).
Marketed by Jim Beam Brands, the brand will continue to have on-premise point-of-sale support this year. A field marketing program inviting consumers to taste the difference between Tangle Ridge and other whiskies that began last year will continue in 2000.