Spirits in Canada

PROSPECTS

Growth expected to be driven by premiumisation

The significant premiumisation trend that was present in spirits throughout the review period is expected to accelerate over the forecast period. There is now a marked preference for more robust whiskies and consumers seem to be drinking less spirits, but favouring higher quality.

Low base set to support high sales growth in dynamic spirits categories

Steady rather than spectacular volume growth continued to characterise sales trends in spirits during 2017. However, strong performances in some categories, including Irish whiskey, tequila, bourbon/other US whiskey and English gin boosted average growth across the category.

On-trade channel holds greater growth potential

Booming demand for spirits in on-trade channels including full-service restaurants and cafés/bars are set to ensure a much better on-trade than off-trade sales performance over the forecast period. Growing urbanisation, population ageing, the strong cocktail culture and the greater variety of spirits on offer in foodservice establishments are set to be key drivers of this trend.

COMPETITIVE LANDSCAPE

New product launches remain vital part of marketing strategy in spirits

High levels of competition continued to drive players to engage in continuous product innovation throughout 2017. For instance, Corby Spirit & Wine Ltd relaunched its Martel range of cognacs, which had a positive impact on the entire category.

Canada’s 150th anniversary used as an effective tool to enhance brand position

Limited editions of leading spirits brands were launched in 2017 to celebrate Canada’s 150th anniversary. Absolut introduced the limited-edition Absolut Canada, while JP Wiser’s Canadian Whisky released a limited edition “One Fifty” bottle.

Legalisation of recreational marijuana expected to have major impact on spirit sales

The recreational use of cannabis became legal across Canada on 1 July 2018 and this is expected to impact demand for alcoholic drinks generally and spirits specifically. Some recent studies show that some 80% of current cannabis consumers rarely mix the drug with alcohol and that they are also drawn to marijuana for the same reasons people choose alcohol: to relax, have fun and help connect with others.

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