First it was single malt Scotch. Eventually Americans began to rediscover their native Bourbon, and then came the rise of Irish whiskey. More recently, Japanese whisky has become a must-have spirit. Now, another brown spirit that consumers have long taken for granted is due for a revival. Is Canadian whisky ready for its turn in the spotlight?

Brett Pontoni, specialty spirits buyer at the 38-store Binny’s Beverage Depot chain based in Chicago, sees harbingers of a Canadian renaissance. “As more interesting Bourbons were getting made a few years ago, Canadian whisky wasn’t changing much,” he says. “The category was dominated by thin and light whisky that seemed out of fashion. Then we began seeing new Canadian brands like Forty Creek, Lot 40 and Pike Creek—they’ve raised consumer perceptions of the entire category.”

Ken Pritz is the beverage manager at the River Roast lounge in Chicago, and up until now his Canadian selection was long dominated by the major brands. But Pritz is making room for newer labels like Lot 40, offered at $12 a 2-ounce pour. “The best Canadian whiskies have a high-rye, spicy profile that’s ideal for cocktail making,” Pritz says. “Canadian brands have to start emphasizing their rye content.”

Rye is a longstanding staple in Canadian whisky making. For most of the past century, Canadians themselves have routinely referred to their whisky by the generic term “rye,” even though many brands are produced from corn-dominant grain bills and may include no rye grain at all. But that’s changing, as more distilleries are introducing authentic ryes—many of them 100-percent rye expressions. Canadian Club introduced its Canadian Club 100% Rye ($20 a 750-ml.) in May of last year. Hood River Distillers is putting its marketing efforts behind its all-rye Pendleton 1910 ($40). Meanwhile, Pernod Ricard’s Lot 40 ($30) has proven so popular that it’s on allocation. Pernod has also enriched its J.P. Wiser’s blend ($20), bringing it to 60-percent rye.   “Historically, Canadian whisky has been pigeonholed into very smooth and easy drinking liquids, but the picture is starting to change,” says Gerard Graham, director of new brands at Pernod Ricard. “Rye has become more popular, and the Canadians are adding it to their whiskies. We want to introduce bigger, bolder flavors.”

Long Climb Back

Plenty of patience will be required, however. Canadian whisky’s volume last year was down 2.2 percent to 13.3 million nine-liter cases, according to Impact Databank. That represented another year of decline for a category whose U.S. volume was 5 million cases larger in 1990, when Canadian offerings far outdistanced all other whiskies. Most major brands were down last year, though bottom-shelf brands continue to suffer the biggest losses.

On the top shelf, Crown Royal’s displays are often so separated from its category that many consumers don’t recognize it as a Canadian whisky. Brand director Jim Ruane admits as much. “Our research shows that maybe only 30 percent of people identify Crown Royal as a Canadian product right away,” he says. “That’s not a condemnation of the category, but testament to the fact that Crown Royal has transcended it.”

Flavors have perhaps only confused the matter. Crown Royal Regal Apple ($25 a 750-ml.) has been a huge success, reaching more than 1 million cases in volume. Crown Royal Vanilla came out a year ago at the same price and has won plaudits, including being named Best New Spirit at Market Watch’s 2017 Leaders banquet. A honey-flavored variant, however, was launched in summer 2016 and withdrawn, with no plans to bring it back. Ruane maintains that the flavors haven’t cannibalized sales of Crown’s original Deluxe ($25). “The flavors we sell have been 75-percent to 80-percent incremental to the brand,” Ruane says. “We get a higher percentage of multicultural consumers, as well as younger millennials, in flavored whiskies. So flavors have been valuable line extensions.”

Crown Royal was once a major sponsor of stock car racing under the NASCAR banner, as well as thoroughbred horse racing. But its ties to both have fallen off in recent years as Diageo has centered its marketing ambitions on the Armed Forces weekend at the Indianapolis 500. “The military is now the center of gravity for Crown Royal marketing efforts,” Ruane says.

At Constellation Brands, owner of No.-2 Canadian brand Black Velvet, vice president of marketing Carl Evans concedes that the company is doing little advertising support today. “It isn’t print or TV commercials at this point,” Evans says. “Most of what we do now is trade promotions and point-of-sale displays.”

Constellation has had limited success in expanding beyond its core Black Velvet, which retails at $19.99 a 1.75-ml. and promotes at $17.99 and even lower. There is a Reserve 8-year-old ($15 a 750-ml.) and two flavors—Toasted Caramel and Cinnamon Rush, priced at the same level as the core Black Velvet—but the line extensions represent just 9 percent of sales, according to Evans, who adds that “the flavor category for us is finicky. It’s never been something we’ve focused on heavily. We’ve introduced flavors largely to maintain a competitive position in the market, hoping that it’s a plus-business overall.”

Bottom Shelf Competition

Other economy brands are in a scramble to hold onto their positions. Brown-Forman’s Canadian Mist has lost some 65 percent of its volume in the U.S. since 1990. For years, its product has hit $9.99 a 750-ml. on promotion, often employing $2 bottleneck coupons to get that price, while the 1.75-liter is sold every day at $19.99. The company’s experiment with line extension Black Diamond, which was priced $4 higher, ended four years ago.

“I wish Canadian whisky were growing and there was more buzz around the category,” says Brown-Forman group brand director Wayne Rose, who takes heart in Nielsen numbers showing that Canadian Mist sales have “stabilized” in recent months. “We hope Mist has turned a corner,” he adds. Kevin Richards, the senior marketing director for whiskey and specialty brands at Sazerac, believes his company’s bottom-shelf labels aren’t getting their due. Rich & Rare sells as low as $12.99 a 1.75-liter on promotion, struggling to compete against such rivals as Windsor—which has gotten as low as $11.99 a 1.75-liter lately—and Canadian Mist, which is frequently reduced below $15 a 1.75-ml. Most of these brands haven’t taken any price increases over the past decade.

“We don’t take annual price increases on our value products,” Richards says. “And coupons are a fact of life. You are noticeably absent from the play if you don’t use them.” He admits that on the bottom shelf there hasn’t been much new brand development, yet he is unrepentant: “It’s easy to say that Canadian whisky is dull. I hear that all the time. But it’s also important to see that there’s a budget-conscious consumer out there who appreciates the consistent and reliable price points of Canadian whisky. Many people like the neutrality of Canadian whisky with Coke or ginger ale. In the end, the bottom shelf isn’t sexy, but our brands on the bottom shelf are the workhorse of retail. They bring a great mass of consumers through the store’s front door.”

Nevertheless, there are critics who argue that Canadian whisky is missing out on the movement favoring less industrialized brands. “Many years ago there was a turn in focus in Canada to mass-produced offerings—whisky lite,” says Mike Price, category marketing director for whiskies at Campari, which owns the Forty Creek label. “The idea was to appeal to people moving to vodka. Now that the movement has been back in favor of fuller-flavored whiskies, these companies have been slow to respond. We think the full body and flavor of Forty Creek is what Canadian whisky ought to represent these days.”

Still, Campari has struggled in getting consumers to trade up from its core Forty Creek Barrel Select ($21.99 a 750-ml.), which continues to represent 90 percent of its sales. There are such upmarket alternatives as Copper Pot Reserve ($27.99) and Double Barrel Reserve ($59.99). “The higher-end versions of Canadian whisky continue to be niche products,” says Price. “It hasn’t helped us that American whiskies have been stealing shelf space from the Canadian category in a lot of U.S. retail stores.”

375 Park Avenue Spirits, a division of Sazerac, has experienced similar challenges with its Tap 357 Maple rye, ($29.99 a 750-ml.). First released back in 2012, the brand has experimented along the way with such finishes as Port, but sales are down by some 30 percent since 2015. CEO Norman Bonchick wants to introduce more age-statement expressions, but says it hasn’t been easy to source the necessary liquid.

Premiumization hasn’t been easy for even the biggest whisky names. Brown-Forman has been marketing its Collingwood brand ($25 a 750-ml.) since 2011. Yet after six years, it’s selling in only about a half-dozen states. Brown-Forman is set to launch a Double Barrel variant in Canada soon, featuring liquid aged in heavily-toasted and -charred barrels, but the company hasn’t said if the expression will be hitting the U.S. market.

The Promise Of Canadian Craft

If Canadian whisky sales are to break out, perhaps the expanding ranks of craft distillers will show the way. Davin de Kergommeaux, the author of “Canadian Whisky: The New Portable Expert,” says there were just 10 Canadian distilleries five years ago, compared to about 40 today. Many of them are turning out gin and vodka while waiting for their whisky stocks to mature. He mentions the promise of such names as Kinship, Wayne Gretzky Estates Winery and Distillery, and Highwood, among others.

“Many of these are on the cusp,” de Kergommeaux says. A few years ago, American import firms were wary of taking on unknown Canadian brands, but that’s changing. “I get calls all the time now from American distributors looking to work with Canadian microdistillers,” he adds.

Again, patience will be required. Kinship House of Fine Spirits in Ontario released 66 Gilead whisky a year ago in Canada, priced at nearly C$70 ($57) a 750-ml. Kinship has a 100-percent rye expression finished in Cabernet Franc wine barrels, as well as a maple-flavored whisky made from 100-percent corn. Nonetheless, the company isn’t selling in the United States yet. “We’re hoping to sell to America in 2018, but we’re not sure yet,” says Kinship president Jeremiah Soucie. “We’re building a bottle for the market now.”

Still Waters Distillery, founded in 2009, is exporting a couple of blended Canadian whiskies (both around $32 a 750-ml.) to the U.S. market through Glass Revolution Imports, but its footprint so far covers only a dozen or so states. “The Canadian craft distilling movement is at least five years behind the United States,” says Still Waters’ co-owner Barry Bernstein. “Our excise taxes here are very high, and other laws make the business challenging. We had hoped to be further along than we are.”

Dillon’s Small Batch Distillers in Beamsville, Ontario, was founded in 2012. So far, the company is selling just gin to the U.S. market through ECU Worldwide, as it’s concentrating on selling what whisky it has through its own distillery tasting room. “We’re doing a good job here this year,” says Dillon Small Batch president Geoff Dillon. “Next year I plan on visiting the United States for more marketing.”

The suspicion is that American retailers have been so caught up in carving out space for expanding Bourbon stocks that they aren’t exactly thirsty for new names like Dillon’s. But major retailers like Binny’s are promising to take them on. “We’ll make room for more Canadian labels,” says Pontoni, who’s a big booster of such trailblazing names as Forty Creek and has been recently buying proprietary barrels from Still Waters. “Anytime there’s something new and interesting from Canada that’s of good quality, we’ll get excited about it and stock it. If these new labels require hand-selling, we’ll do that. We think there are good things ahead for the Canadian category.”