Fellow Shareholders,
In this year’s annual report, we highlight what we at Corby are doing to keep moving forward, stay fresh and relevant, and ultimately grow our business. We’re a different company than we were just three years ago, and there are good reasons why.
For one, we have taken deliberate action to reorient our product portfolio toward faster growth segments and more premium opportunities. We have also improved the way we work, investing in new tools and processes. But, more than anything, it’s because we have taken our cues from consumers. When their wants, needs and expectations change, we change right along with them – creating product variants, putting a fresh face on brands and adjusting our strategies. Despite the heritage and traditions surrounding many of our brands, we keep evolving them in ways that enthrall and engage consumers – even if it means, for example, inviting the public to come in and see how products are made. It’s not change for the sake of change, nor is it change that veers away from our core purpose or values. Rather, it’s about embracing evolution for continued relevance and growth in this dynamic age.
We have taken deliberate action to reorient our product portfolio toward faster growth segments and more premium opportunities.
Fiscal 2018 highlights
There are four stories that stood out in fiscal 2018 and that are profiled in this report. I encourage you to read them:
- Go for the Bold – Our acquisition of the Foreign Affair winery at the beginning of the year added premium Ontario VQA wines to our portfolio of owned-brands at a time when Canadians’ appreciation for higher-quality wines is growing, and channels, such as grocery stores, are opening up.
- Add Some Colour – Since we acquired the Ungava Spirits brands less than two years ago, the brands have taken off nationally, contributing significantly to the Company’s top-line growth. Ungava gin is now the number one super-premium gin in Canada by volume. We’re also now leveraging our newly acquired Québec-based plant to bottle wines that are being sold in the Québec grocery channel.
- Share the Love – Our export strategy is starting to pay off, with shipment volumes up 11% compared to fiscal 2017. The focus is on introducing our Canadian craft whiskies and Ungava gin to select markets in France, Germany, the UK and the US.
- Own Your Story – J.P. Wiser’s Canadian whiskies are the centrepiece of our product portfolio. Yet we continue to evolve the brand and create new experiences for new and younger consumers. These actions helped J.P. Wiser’s gain market share and outperform its category in fiscal 2018.
Naturally, there were other success stories as well, in which our people collaborated to produce bold and creative marketing campaigns or to improve internal systems and processes. We can’t thank them enough for their efforts, which have strengthened our position going forward. You can read about our sales and marketing exploits in the Top Brands section of this report.
Together, these actions helped us achieve solid top-line and bottom-line performance in fiscal 2018, despite a slow start to the year following the Liquor Control Board of Ontario’s (LCBO) move to normalize inventory levels built up in the previous year in anticipation of threatened strike action.
Net revenue grew 2% compared to the previous year, reaching $146.6 million, buoyed by the addition of the premium Ungava Spirits brands and Foreign Affair wines, export success, and strong commission income from Pernod Ricard brands. At $25.7 million, net earnings remained stable due in part to investments behind the new brands and winery.
The fact is that we’re a company that embraces change and will always evolve in sync with consumer trends and market opportunities.
For a better world
Companies today are expected to not only produce goods and reward shareholders, but also contribute to the wider world by promoting social and environmental change. Two of our key initiatives, Responsib’All Day and Corby Safe Rides, get bigger and better every year.
Responsib’All Day is a day in June of each year when our employees, together with their global Pernod Ricard colleagues, go to work in their local communities instead of coming in to the office or plant. The focus for the 2018 Responsib’All Day was on supporting the availability and sustainable management of clean water and sanitation for all, which is one of the United Nations’ 17 Sustainable Development Goals. Across the country, our employees helped out with water projects, which you can read about in the Corporate Social Responsibility section of this report.
This was also the fifth year that we helped Torontonians get home safely on New Year’s Eve by paying for their rides on Toronto Transit Commission (TTC) buses, streetcars and subways. One of our top brands, Jameson Irish whiskey, then followed our lead by covering the costs of riding Queen and King Street streetcars on St. Patrick’s Day.
Another area of focus for the last few years has been on creating diverse teams and promoting a culture of inclusion. While there’s been movement at all levels of the organization, I’m especially proud to report progress on gender diversity in our executive ranks. With the appointments of Anne Martin (Vice-President, Marketing), Melissa Hanesworth (Vice-President, Production) and Angel Li (Vice-President, Human Resources), three of our seven executive team members are now women. This progress will surely benefit our business. You can read more about our award-winning workplace in the Our Culture section of this report.
Navigating change
We were very pleased to see the strategy we’ve been implementing over the past three years begin to pay off in fiscal 2018. Sales of newly acquired premium brands like Ungava gin and Foreign Affair wines, and innovations in premium Canadian whisky, helped offset top-line declines among some of our standard brands. They also demonstrated our ability to acquire and integrate new companies and to grow up-and-coming brands, both of which will be important for our future.
In addition, our export business showed good signs of growth. Given the modest growth expectations for the Canadian spirits market, we are putting more resources into export sales and refining our route-to-market approaches. Early in fiscal 2019, we announced new distribution agreements for key export brands sold in the US.
We are on the right track to capture new opportunities and to weather storms that may come our way over the next few years. At this point, it’s hard to say what the effect of the pending legalization of cannabis in Canada will have on our business. For now, we’re watching developments closely and assessing what actions, if any, would be right for our business.
The fact is that we’re a company that embraces change and will always evolve in sync with consumer trends and market opportunities. As I stated at the start of this letter, we’re not the same company we were three years ago. Chances are, we’ll look different again three years from now.
Once again, I’d like to thank our employees for their contributions this past year. I’d also like to thank our Board of Directors for their continued support and guidance as we navigate change together.
Sincerely,
Patrick O’Driscoll
President & Chief Executive Officer
2018 Annual Report
