Thursday, March 13, 2014

Whiskey stats

Soon after the news broke that Campari has bought Forty Creek, @65glenfarclas tweeted a link to a PDF of their "Acquisition of Forty Creek Distillery Ltd." investor presentation.

There's a lot of interesting stuff in there, if that's the sort of stuff you're interested in. For instance, Slide 5 distinguishes "premium" brands from "low price" and "value" brands, reminding everyone that "premium" doesn't refer to what's in the bottle, but what's coming out of your wallet.

Which adds an ominous note to Slide 18's statement that "Gruppo Campari is well positioned to... [f]urther premiumise Campari’s brand portfolio." Wouldn't "premiumise" mean "raise the price"?

There's also some great pie charts in the presentation, for people who like numbers. These are from ISWR for 2012:

72% of the sales is in premium and deluxe price tiers. Canadians drink better.

This, ladies and gentlemen, is why Canada should in fact spell it "whiskey."

And these are from DISCUS, for 2013:

I don't know which category Red Stag falls in, but it certainly should be counted as part of the US spirit breakdown.

Guess they're still spilling more Bourbon and Tennessee than selling rye.

A lot of people would never guess that one out of every twelve ounces of spirits sold in the United States is Canadian whisky. (Of course, a lot of people would never guess that Crown Royal is Canadian whisky.)

Slide 13 presents the case for "The US opportunity for Forty Creek whisky," including my favorite statistics of the whole package. In the past year, Canadian whisky has had:
  • Volume growth of 2.9% overall
  • Value growth of 6.1% overall
  • Value growth of 9.1% for super premium whisky
  • Value growth of 62.8% for high-end premium whisky
(Forty Creek is super premium, costing half again as much as the market average (keeping in mind the market average comes in plastic bottles).)

All this sounds great for the Canadian whisky industry, but when one category has ten times the value growth of the whole industry, then it had better be a tiny category, or the other categories are going to have a considerably smaller value growth than the overall number -- and may even be shrinking. Here's a nonsense chart showing the sort of value growth the non-premium Canadian whiskies must have had as a function of the percentage of the whole market the high-end premium had, if super premium started at 5% of the overall market:
The math may well be correct. The assumptions almost certainly aren't.

For all I know, the makers of low cost and value Canadian whisky are happy with low or negative value growth. If they aren't, though, they might respond by, say, releasing better whiskies to get a slice of the premium pie. That would be good for premium whisky drinkers in the U.S. -- at least as far as selection goes -- and it might even be good for Forty Creek (which has not yet been producing to capacity) and Campari, if U.S. drinkers get used to the idea that Canadian whisky isn't just for mixing.


  1. Count me as one who's already used to the idea. I've got Canadians (whiskies that is) that I prefer to many bourbons.

  2. Did they import them for you, or did you have to bring them through Customs yourself?

  3. then it had better be a tiny category, or the other categories are going to have a considerably smaller value growth than the overall number -- and may even be shrinking. brandy investment

    1. I do say I'm getting ready to switch to apple brandy when whiskey prices itself out of my market.