Our acquisition of the spirits business of Domaines Pinnacle set the tone early in the year. The transaction added a variety of uniquely Canadian, and highly complementary, brands to our portfolio, as well as an entrepreneurial team and a manufacturing base in Cowansville, Québec. With our strong balance sheet, we wanted to acquire a company where our critical mass and expertise could be used to scale up its operations at a faster pace than would be possible on its own. Domaines Pinnacle ticked all the right boxes. Its portfolio included premium products, like Ungava premium gin, that we were missing and that would support our efforts to revitalize and premiumize our stable of Corby-owned brands. We also believed that, given additional sales and marketing support, these brands could take off – and they did. In a matter of months, we expanded distribution of the new brands across the country and obtained national account listings. In May 2017, Ungava became the number one super-premium gin in Canada by case volume.
With equal urgency, we jumped on the opportunity to sell wine in Ontario grocery stores when the provincial government opened this new retail channel. Through the collaborative efforts of our sales, trade and brand marketing teams, Corby developed great partnerships with two of the largest grocery retailers. At year end, three of our wines, Jacob’s Creek Shiraz Cabernet, Jacob’s Creek Moscato and Stoneleigh Sauvignon Blanc, ranked among the 10 top-selling imported wines in the Ontario grocery channel. Jacob’s Creek Moscato was the number one white wine by volume and value, and Stoneleigh Sauvignon Blanc was the number one New Zealand wine by volume and value.
I highlight these two stories both because they were headline news and because they exemplify the core behaviours of boldness, creativity and collaboration that we’re working to instill in our organization. There were, in fact, several areas where we built on existing strengths and reached new heights in fiscal 2017.
Building on our Strengths
Our premium Canadian whiskies earned high praise once again, winning six awards at the World Whiskies Awards and four awards at the Canadian Whisky Awards. Corby is a pioneer of Canadian whisky, and we are getting better and better at leveraging our core competencies to drive the renaissance of the category, capitalize on classic cocktail and rye trends, and create future growth drivers. In fiscal 2017, this included introducing our highly acclaimed craft whiskies in France, Germany and the UK. I encourage you to read more about our achievements in premium Canadian whisky.
Among the Pernod Ricard brands Corby represents, Jacob’s Creek wines continued their exceptional momentum, with shipment volumes increasing by 15% to 554,000 cases. We’ve grown Jacob’s Creek from being the number five brand by value in the Australian wine category in Canada to the number one position by both volume and value. Our success has been achieved through a combination of strategic insight into how to recruit new wine drinkers, seamless collaboration with the brand owner in Australia, customer involvement, and strong innovation on product, price, promotion and place. You can read more about our Jacob’s Creek wines further in this report.
In a year when Canadians came together to celebrate our country’s 150th birthday, several of our brands, including J.P. Wiser’s Canadian whisky and Absolut vodka, released limited edition bottles commemorating the occasion. Others, like Polar Ice vodka and Royal Reserve Canadian whisky, both of which are firmly anchored in Canada, found distinctly different ways to support our great country through relevant social causes.
Behind our brands, we invested time and money in ensuring our organization is competitively superior – by this, we mean being strategically aligned, having the right tools and processes in place to make better and faster decisions, and having the competencies and capabilities to do what’s needed to accelerate growth. This work started in fiscal 2016 when we articulated our company purpose and core behaviours, which helped us identify who we are naturally and what we can build on to drive competitive advantage. Throughout fiscal 2017, we worked to embed these core behaviours into our culture and processes. Parallel projects focused on defining our strategic priorities and the business battlegrounds that we need to win.
From Purpose to Performance
With the groundwork laid in fiscal 2017, our focus is shifting to execution. It’s time to translate our purpose and strategic priorities into top-tier performance, as the title of this year’s annual report suggests. Our fiscal 2017 financial results were solid, with revenue up $3.9 million over fiscal 2016, but we aspire to accelerate further growth.
There’s a great deal of optimism across our organization. While we recognize that there will always be challenges, the economic outlook is generally favourable across our domestic markets. What’s more, we’ve only just begun to exploit a number of promising areas: it’s been less than a year that we’ve owned the Ungava Spirits brands and there’s still tremendous potential for growth; the number of Ontario grocery stores licensed to sell wines is set to increase from 70 to 300 over the next few years; and we’ve only just scratched the surface of our craft whisky export opportunity.
After fiscal year end, we announced an agreement to acquire The Foreign Affair Winery, a Niagara, Ontario-based VQA wine producer. The acquisition, which is expected to close at the end of September 2017, includes Foreign Affair’s portfolio of premium, award-winning Ontario red, white and rosé wines, as well as related production assets and inventory. Foreign Affair’s uniquely differentiated, premium Canadian wines, such as The Conspiracy, Enchanted, Amarosé and Temptress, will complement our portfolio of represented international wines. We look forward to growing these brands in much the same way as we’ve done with the Ungava Spirits brands.
I could not be more excited about where Corby is headed, or more proud of what we have achieved. My heartfelt thanks go to our Board of Directors for their invaluable guidance and to our employees for rallying behind our purpose and strategy. Our success would not be possible without them. I would also like to thank all of our shareholders for their continued support and confidence in our future.
President & Chief Executive Officer