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News Analysis Focus

Holding strong Liquor Canada spoke to Corby Distilleries’ vice president of external affairs, Howard Kirke, to weigh in on the current state of the market How has the Canadian market fared this year in terms of growth? The Canadian spirits market is growing in single digits in terms of case volume. It looks like it’s growing at about two per cent on a case basis and almost four per cent on a value basis. What is Corby’s traditional area of strength in Canada? We are Canada’s second largest distributor of distilled spirits. We have a market share that is in the 24-per-cent range. Our strength has historically been in Canadian whisky, vodka, liqueurs, where we have a dominant share. How does that compare to this year? Trends in the Canadian spirit business take some time to evolve. It’s a 16 million-case category, and in terms of trends, they’re not as dramatic. You might have sub-segments of certain categories that are showing growth, like the super premium vodka segment is growing very well, single malt scotches continue to show good growth. What regions in Canada have you seen significant growth in this year? Western Canada is doing very well. It’s a function of the economic performance of Alberta, Saskatchewan and British Columbia. Saskatchewan is doing quite well. There’s a lot of activity out there, natural resources, potash, provides people with a little bit more disposable income and that’s good for our business. Ontario is holding its own, but not showing the stellar growth it has enjoyed over the last few years. Where do you see growth or contraction in the Canadian liquor market given the current financial conditions? So far we’re not seeing any specific movement in the distilled spirits market in Canada. We’ve got numbers (consumer purchases across Canada) up until the end of September and those show that total spirit

sales increased almost three per cent in the month of September, and on a rolling 12-month basis, the growth is one per cent. We’re not seeing any particular slowdown at this juncture. I think where we will see some softness if we do get some fallout from the financial situation that the U.S. has had, and I don’t know that we will, but assuming we do, it will probably impact the on-premise sector before it impacts the off-premise or the take-home sector. That’s usually what happens. The last time we had an economic slowdown we saw some movement of consumers from the super premium down to the deluxe category.

Corby is a leading manufacturer and marketer of spirits and imported wines. Howarde Kirke joined Corby in 1994, holding a number of sales positions before becoming VP of external affairs

Are you seeing any signs of a market slowdown? The September results suggest that there doesn’t seem to be any particular softness. Some of our premium brands, Chivas Regal in the scotch category, Absolut vodka – their trends don’t seem to be changing at all. The growth trends for these brands have accelerated, as opposed to decelerated or shrunk. We have Havana Club rums that are growing strong double-digit growth, as an example. What percentage of your sales comes from licensees? It depends very much on the brand. But the split off premise/on premise in Canada, across not just our brands but everybody’s brands, is around 15 per cent through on premise, and 85 per cent take home, or off premise. What advice would you offer to licensees during the current financial conditions? I think the approach should be to continue to offer optimum value for their consumers no matter what their offering is, which will hopefully provide them with a sustainable level of patrons through the potential economic slowdown. As long as they offer value proposition they should be in good shape - good quality products at a fair price. 

Corby’s top 5 brands in Canada

Wiser’s whiskeys Lamb’s rum Absolut vodka Polar Ice vodka Corby Royal Reserve

www.liquorcanadamagazine.com

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News ANAlysis  

Liquor Canada spoke to Corby Distilleries’ vice president of external affairs, Howard Kirke, to weigh in on the current state of the market...

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