Corby’s owned-brands account for almost 80% of our total annual revenue. They include J.P. Wiser’s Canadian whisky, Lamb’s rum, Polar Ice vodka, Corby’s mixable brands, Ungava Spirits brands, and once the announced acquisition is completed, Foreign Affair’s portfolio of premium wines. All are made in Canada, except for Lamb’s products sold outside the Americas, which are blended and bottled in the UK. With the sales performance of these brands significantly influencing the Company’s net earnings, it is paramount that we continuously revitalize our portfolio, deliver product innovations and play to our strengths.
In support of these efforts, we work with a dedicated research, development and innovation team at the Hiram Walker & Sons Innovation Centre in Windsor, Ontario. The team focuses specifically on Corby-owned brands and opportunities for innovation in blends, flavours and packaging.
Our acquisition of the spirits assets of Domaines Pinnacle Inc. in September 2016 added a new dimension to our portfolio, with a variety of distinctly Canadian, and highly complementary, brands. Our customers were curious about our new products and our sales teams were quickly trained to represent them.
The flagship brand, Ungava, is Corby’s first super-premium gin. Its distinctive yellow colour, derived from botanicals gathered from the tundra region of northern Québec, makes it as memorable for its look as for its flavour. The brand portfolio, which includes Chic Choc Spiced rum and Cabot Trail (Coureur des Bois in Québec) maple-based cream liqueur, and other assets acquired are being operated by Ungava Spirits, a wholly-owned subsidiary of Corby based in Cowansville, Québec.
The integration of Ungava Spirits has gone smoothly, and we’ve been able to expand distribution of the new brands across the country and obtain listings with on-premise national accounts. In May 2017, Ungava gin became the number one super-premium gin in Canada by case volume. Since our completion of the Ungava Spirits acquisition on September 30, 2016, the brands have contributed $6.2 million to revenues. We expect Ungava Spirits to be operating on a break-even earnings basis within its first full year.
Polar Ice Vodka
Polar Ice vodka responded well to increased investment, maintaining retail volume while the standard vodka category in Canada declined by 2%. Polar Ice vodka is firmly anchored in all things Canadian and remains among the country’s top-selling vodka brands.
In fiscal 2017, the limited edition “bearless” Polar Ice and Polar Ice 90º North bottles brought attention to the threats facing the world’s polar bear population, two-thirds of which live in Canada.
Ahead of National Caesar Day on May 18, we announced a partnership with French’s™ Not Your Ordinary Caesar™ Original Cocktail Mix. The Caesar – a cocktail widely known for its unique sweet, savoury, sour and salty flavour – was invented in 1969 by a Canadian bartender. Both Polar Ice and French’s Caesar Original Cocktail Mix products are proudly crafted and bottled in Canada – resulting in a truly Canadian Caesar cocktail. For a limited time, consumers received a free 1.89-litre sample of French’s Caesar Original Cocktail Mix with the purchase of a bottle of Polar Ice vodka in select retail stores.
In a challenging environment for rum, in which retail volumes for the category as a whole declined by 1% and our Lamb’s rum volumes were down 6%, sales of Lamb’s Palm Breeze in Ontario were a bright spot, growing by 2%. We continue to invest in Newfoundland and Labrador, where Lamb’s has been the best-selling spirit brand in the province for over 30 years. Corby is a gold-level sponsor of the annual George Street Festival in St. John’s, and we partnered at a number of events with Rum Ragged, the folk band that won last year’s Lamb’s Nation anthem contest.
We continue to add new flavour variants to our product line. In fiscal 2017, it was Lamb’s Spiced Cherry, the first flavoured spiced rum in the dynamic Canadian spiced-rum category, which is performing well. Since year end, we also introduced Lamb’s Pineapple in Newfoundland.
McGuinness, Canada’s largest mixable liqueur brand family, is the ultimate facilitator of cocktails at home, and we’re making it fun and easy for people to give our products a try. We rolled out a series of catchy, 30-second videos showing how to make great cocktails with McGuinness and some of our other brands, including Polar Ice vodka, J.P. Wiser’s Deluxe Canadian whisky and Lamb’s rum. We also introduced 375mL formats for three of the most popular flavours – Crème de Banane, Peach Schnapps and Blue Curacao – to encourage consumer trial at a lower price.
Our strategy with McGuinness is to keep rolling out new flavour offerings in line with consumer trends and to implement strong consumer programming online and in retail stores. Two new flavours, McGuinness Simple Syrup and McGuinness Apple Whisky, were launched in the fourth quarter of 2016, followed by McGuinness Butterscotch in fiscal 2017. Simple Syrup is a game-changer for home bartenders, with an alcohol base that won’t water down a cocktail.
The market as a whole is being driven by new cream-based offerings, and that’s what made the addition of Cabot Trail (Coureur des Bois in Québec) maple-based cream liqueur through our Domaines Pinnacle acquisition so attractive. Bolstered by a packaging redesign implemented during the year, Cabot Trail has performed very well.