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VICTORIA GAITSKELL

This spring and summer, a flood of new flavouredspirits on the shelves of the Liquor Control Boardof Ontario (LCBO) may make your shopping

experience seem more like choosing ice creamthan alcohol. The addition of fruit, spice,and candy flavours; deluxe small-batchmanufacturing; and screen-printingon bottles in place of paper labels areamong recent trends pushing for anevolution in the packaging andcontents of alcoholic spirits.

Behind these dramatic innova-tions is a two-pronged strategyto grow sales: On the one hand,by reaching out to youngerdrinkers and first-time experi-menters, and on the otherhand, by strengthening the loy-alty of established customersand extending the lifetime andrange of their purchases withintheir preferred brands. I spokewith Stacee Roth, LCBO’s Cate-gory Manager for White Spirits,Ready-To-Drink and Accessories,as well as Marijke McLean,LCBO’s Category Manager forBrown Spirits and Duty Free, tolearn more about the products,packaging, and marketing strate-gies driving this season’s latesttrends.

Cake, marshmallow, and cinnamon vodkaRoth reports, that in the past five years,LCBO’s overall vodka sales have grown over$100 million and since 2009 have overtakenCanadian whiskey to become their largest sin-gle product category. She attributes this rise inpopularity to the fact that vodka is clear, colour-less, relatively mild tasting and, therefore, versa-tile for combining with mixers. She adds thatvodka’s relatively low calorie count appeals toweight-watchers, who tend to belong to ayounger age demographic.

Roth says, that from April until the end ofSeptember of this year, the LCBO will be pushingits seasonal program of flavoured vodkas “heavilyand extensively.” As confirmation, my recent survey ofLCBO’s vodka shelves turned up an amazing assort-ment of flavoured options alongside the more tradi-tional formulas of such major brands as AmericanSmirnoff (all of whose flavoured varieties cost $25.95for 750 ml and include coconut, green apple, lime, or-ange, raspberry, vanilla, and watermelon).

LCBO is spotlighting six trendy and new dessert-flavoured vodkas. The leading SKU in this series, ThreeOlives Cake (750 ml, $25.95), is an English vodka withadded artificial tastes of cake and vanilla icing. It comesin a festive, label-less bottle with electric blue letteringand simulated rainbow – coloured sprinkles scatteredall over it. “Consumers are gravitating toward cocktails,and the flavoured vodkas don’t take a lot of time to mix.

You just chill them and serve them neat,” explains Roth.“Three Olives Cake has a lower ABV [alcohol by vol-ume] content at 35 percent alcohol, whereas straightspirits typically have 40 percent alcohol, so it does notdeliver as much of a burn.”

Allied products include Pinnacle Whipped Vodka,flavoured with imitation whipped cream (France, 750 ml,$25.45), Smirnoff Fluffed Marshmallow Vodka (U.S.A.,750 ml, $25.95), and soon-to-be-released-in-Ontario So-bievski Cinnamon (Poland), a product that already ranksamong the fastest-growing spirits in the United States.

Crystal skulls, small-batch and artisanal brandsRoth says LCBO’s flavoured vodka segment is enjoying

current sales growth of over 6.5 percent, butdeluxe vodkas such as Grey Goose (France, 750

ml, $48.95) are even more popular. Otherdrivers in the vodka segment include three

unflavoured brands: Tag No. 5 (Canada,750 ml, $25.30), Russian Standard

(Russia, 750 ml, $25.45), and CrystalHead Vodka, a packaging showpiece(Canada, 750 ml, $59.95).

Crystal Head comes in a clear-glass bottle inside a cardboardbox and is shaped to resembleone of the 13 mysterious quartz-crystal skulls that archaeologistshave excavated from various ancient cultures around theworld. Launched in 2008, CrystalHead Vodka is filtered by an unusual process using quartzcrystals and was born of a busi-ness partnership between actorDan Akyroyd and artist JohnAlexander. Roth says such pre-mium offerings serve to retain andupsell established customers, andthat LCBO is handling increasingnumbers of these unique high-

end products aimed at spiritsdevotees and status-seekers.McLean says LCBO’s brown-spirits

category has added new small-batch andartisanal products as well, some frommajor distilleries that she says are just as

capable as small suppliers of making pre-mium products in a more controlled, hand-

crafted way. “Small batches, especially ofAmerican whiskey, are very new to Canada andthere is still not a lot of supply, but they havebeen very successful,” she says. “For these products, suppliers tend to put a lot of thought,energy, and dollars into packaging. For example,Maker’s Mark 46 [U.S.A., 750 ml, $49.95] hand-dips and seals every bottle in wax. Blanton’sOriginal Bourbon [U.S.A., 750 ml, $64.65] hasan interesting, 36-sided dice bottle with hand-

dipped wax and a small equestrian figurine ontop. In some cases, the bottles are hand-numbered

to emphasize that it’s a small-batch product.”LCBO’s fancy new offerings and recent marketing

push to transform hard liquor into two innocuous polarities – either frivolous, fruity cocktails or posh,handcrafted giftware – had me wondering: Could theseinnovations encourage people to consume alcohol inincreasing, ever more dangerous, amounts? Researchhas shown this is not the case.

Rather, alcohol can be categorized as a mature product,meaning consumers are already aware of the productand its basic characteristics. Thus, overall consumptionof the product is not significantly affected by advertis-ing specific brands. In fact, a landmark study by JosephC. Fisher, Advertising, Alcohol Consumption, and Abuse:A Worldwide Survey (1993), suggests that advertising

APRIL 2012 • PRINTACTION • 11

Packaging Spirits

has no impact whatsoever on either alcohol consump-tion or alcohol abuse. Under Fisher’s findings, if adver-tising cannot increase total alcohol consumption, themost alcohol advertisers can achieve is either tostrengthen the loyalty of their established customers orelse gain market share by inducing new customers totry their brand or to have other brands’ customersto switch.

A bottle of spice, gin rebirth and whiskeyRoth reports that LCBO’s rum category is grow-ing well at 4.7 percent. Again, the key driver forrum is the flavoured segment – in this casemeaning rum flavoured with spices – aproduct now growing at an amazing rateof 29 percent. “The trend started withthe success of Captain Morgan SpicedRum (Canada, 750 ml $28.45) and hasgrown significantly, with the newest en-trants being Malibu Black CoconutFlavoured Rum (Canada, 750 ml,$27.95), which has the characteristicsof a liqueur, and Bacardi OakheartSpiced Rum (U.S.A., 750 ml, $28.45),which is based on amber Bacardirums aged in oak barrels plus vanillaflavouring,” explains Roth.

Their number-one seller is TheKraken Black Space Rum (Trinidadand Tobago, 750 ml, $27.95), a brandlaunched over a year ago, with an indi-vidualistically shaped proprietary bot-tle depicting the kraken (a monstrousmythological squid) on its convention-ally stuck-on paper label. Roth says, aswith vodka consumers, seasoned rumcustomers are trading up to higher-endaged products that currently show

10.9-percent growth (for example, Pyrat XO ReserveRum, Guyana, 750 ml, $44.95).

Roth cites gin as a remarkable success story: After along stretch of flat or declining sales, the spirit is nowexperiencing a resurgence of interest and currentgrowth of 4.7 percent. “Gin is basically vodka steeped

with juniper berries or other botanicals,” explainsRoth. “People are transferring from vodka to ginbecause they want more flavour and the com-plexity gin adds to cocktails.

“Deluxe gins in particular have been growingat a phenomenal rate of 42 percent,” she adds.“Most of the interest in the higher priced gin andvodka offerings is because of the status associ-

ated with premium brands.” Although ginis still a relatively small category, shesays the LCBO intends to keep addingnew products in the near future tobuild it.

“In my categories, suppliers havebeen looking at designing distinctive,high-impact bottles to enforce theirbrand identity and call out their prod-uct on the shelf,” says Roth. “TheKraken’s bottle and Crystal HeadVodka’s container are among the moreextreme examples. Other propri-etary bottles that have im-pressed us lately includeChambord Flavored Vodka[France, 750 ml, $34.95,flavoured with ChambordBlack Raspberry Liqueur]and No. 3 London DryGin [England, 750 ml,$49.95 ], a new green bottlethat looks as if an antique keyhas been pressed into it. Thekey is a symbol that talks to the

identity of the brand.” The name No. 3 refers to the ad-dress in St. James’s Street, London, where the product’smanufacturers, Berry Bros. & Rudd, have operatedsince 1698.

“Alternatively, suppliers are calling out key attributesof their product on the bottle or label design,” Roth con-tinues. “For example, Absolut Elyx [Sweden, 750 ml,$48.95] comes in a uniquely shaped bottle that is stouter,squared off, and metallic copper in colour to representthe copper-kettle manufacturingmethod used to produce it. Thename and packaging of Beefeater24 [England, 750 ml, $32.95]emphasize the 24 hours duringwhich the product is steeped inbotanicals. More deluxe ginstend to have packaging that

12 • PRINTACTION • APRIL 2012

Continued on page 27

APRIL 2012 • PRINTACTION • 27

is tall, slim and elegant.Clearly, manufacturers arecapitalizing on all these trendsto make their productsmore appealing anddistinctive to con-sumers.”

“A lot of my brandsare whiskies,” saysMcLean. “Canadianand Scotch whiskiesboth have fairly long,uninterrupted histo-ries, and there’s not alot of innovation inthe liquid, the brand-ing or the positioningof the product to thecustomer. The demo-graphic who drinks it is getting older, sothe product is notbringing in many newcustomers.

“But manufactur-ing of both Irish andAmerican whiskies was interruptedfor a long time by historical events:Prohibition in the U.S. and taxesor wars with the Irish. Only re-cently, in the last 20 years, havethe products begun to get upand running again. The result isthat they are both now growingfaster than Scotch and Canadianwhiskies, mimicking the same ef-fect that is happening with vodkaand rum.” Over the last fouryears, LCBO’s American whiskeysales grew 13 percent, and duringthe same period, Irish whiskeyhas grown 17 percent consis-tently year over year.

Honey, low-cal and ready to drinkMcLean continues: “The Ameri-can and Irish categories are domi-nated by two large brands [respectively]:Jack Daniel’s and Jamieson. Both are veryiconic from a branding perspective andhave not changed their packaging a lot.Some bourbons and Irish whiskies aremore creative with their packaging, butcompared to vodka and gin, there hasn’tbeen as much innovation.

“But this year Jack Daniel’s launched itsfirst new brand extension in 40 years: JackDaniel’s Tennessee Honey, a honey-flavoured bourbon in a bottle made in thesame mould as the traditional Jack Daniel’sbottle, but with a lighter label trying toreach the female drinker. Brown spirits stillknow their core customers are men, butwomen will try the sweeter product, be-cause it’s more palatable. On average, con-sumers of whiskies are 70 percent maleand 30 percent female. But neweradvertising is aimed at teachingconsumers that bourbon is asmixable as vodka in drinks likeJack and Ginger [ginger ale] andJack and Jill [Jack Daniel’s and rootbeerschnapps shaken over ice and served up asa shot]. Their more deluxe product, JackDaniel’s Single Barrel Whiskey [U.S.A., 750ml, $52.05] is an extension of their tradi-tional iconic brand.”

Roth adds: “Depending on brand, in vodka and gin, the male-female customer ratio is more like 60:40.Smirnoff still has a more male-domi-

nated advertising focus, but now a lower-calorie vodka is coming on the scene in

the U.S., and brands specificallytargeting females, such as VanGogh Vodka [a brand that in-cludes flavours like Dutchcaramel, espresso, pomegranate,and peanut butter and jelly] arecoming in this year. Vodka sup-pliers are finding a marketingopportunity to women they hadpreviously ignored.”

McLean notes, that in the lastyear and a half, Jack Daniel’s hasalso entered the Ready to Drink(RTD) market – consisting ofcoolers and pre-mixed cocktails

– with its iconic brandingreplicated into a carton for-mat containing Jack &Cola, Jack & Diet Cola, orJack & Ginger [U.S.A., 4-pack carton of 355 mlcans, $9.94]. “Lots of spe-cific spirit brands areleveraging RTD as anentry point for consumers

from the legal drink-ing age up to 25years old, hopingto trade them up eventually intothe spirits cate-gories,” adds Roth.

McLean con-cludes by sayingthat, althoughonly four coun-tries like Canada,the U.S., Scot-land, and Irelandhave traditionallyproduced theworld’s supply ofwhiskeys, theyare now facing

competition frommany other countries that have

started manufacturing this spirit, including France, Sweden, Taiwan, andthe Czech Republic. Presumably, thisnew international development willtranslate into even more and growingdiversity in the spirits appearing onLCBO’s shelves.

Victoria Gaitskell is keen to exchange ideaswith readers at victoria@printaction.com

GaitskellContinued from page 12

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