The document discusses recent trends in flavored alcoholic spirits, particularly at the Liquor Control Board of Ontario (LCBO), highlighting a significant growth in vodka sales and the introduction of innovative packaging and flavors to attract younger consumers. It explores various products, including dessert-flavored vodkas and small-batch artisanal spirits, indicating a broader strategy to enhance customer loyalty while appealing to newcomers. Additionally, the text raises questions about the impact of marketing on alcohol consumption, suggesting research indicates advertising has minimal effect on overall consumption levels.

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2. VICTORIA GAITSKELL
T
his spring and summer, a flood of new flavoured
spirits on the shelves of the Liquor Control Board
of Ontario (LCBO) may make your shopping
experience seem more like choosing ice cream
than alcohol. The addition of fruit, spice,
and candy flavours; deluxe small-batch
manufacturing; and screen-printing
on bottles in place of paper labels are
among recent trends pushing for an
evolution in the packaging and
contents of alcoholic spirits.
Behind these dramatic innova-
tions is a two-pronged strategy
to grow sales: On the one hand,
by reaching out to younger
drinkers and first-time experi-
menters, and on the other
hand, by strengthening the loy-
alty of established customers
and extending the lifetime and
range of their purchases within
their preferred brands. I spoke
with Stacee Roth, LCBO’s Cate-
gory Manager for White Spirits,
Ready-To-Drink and Accessories,
as well as Marijke McLean,
LCBO’s Category Manager for
Brown Spirits and Duty Free, to
learn more about the products,
packaging, and marketing strate-
gies driving this season’s latest
trends.
Cake, marshmallow, and
cinnamon vodka
Roth reports, that in the past five years,
LCBO’s overall vodka sales have grown over
$100 million and since 2009 have overtaken
Canadian whiskey to become their largest sin-
gle product category. She attributes this rise in
popularity to the fact that vodka is clear, colour-
less, relatively mild tasting and, therefore, versa-
tile for combining with mixers. She adds that
vodka’s relatively low calorie count appeals to
weight-watchers, who tend to belong to a
younger age demographic.
Roth says, that from April until the end of
September of this year, the LCBO will be pushing
its seasonal program of flavoured vodkas “heavily
and extensively.” As confirmation, my recent survey of
LCBO’s vodka shelves turned up an amazing assort-
ment of flavoured options alongside the more tradi-
tional formulas of such major brands as American
Smirnoff (all of whose flavoured varieties cost $25.95
for 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, Three
Olives Cake (750 ml, $25.95), is an English vodka with
added artificial tastes of cake and vanilla icing. It comes
in a festive, label-less bottle with electric blue lettering
and simulated rainbow – coloured sprinkles scattered
all 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 straight
spirits typically have 40 percent alcohol, so it does not
deliver 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 ranks
among the fastest-growing spirits in the United States.
Crystal skulls, small-batch and artisanal brands
Roth says LCBO’s flavoured vodka segment is enjoying
current sales growth of over 6.5 percent, but
deluxe vodkas such as Grey Goose (France, 750
ml, $48.95) are even more popular. Other
drivers in the vodka segment include three
unflavoured brands: Tag No. 5 (Canada,
750 ml, $25.30), Russian Standard
(Russia, 750 ml, $25.45), and Crystal
Head Vodka, a packaging showpiece
(Canada, 750 ml, $59.95).
Crystal Head comes in a clear-
glass bottle inside a cardboard
box and is shaped to resemble
one of the 13 mysterious quartz-
crystal skulls that archaeologists
have excavated from various
ancient cultures around the
world. Launched in 2008, Crystal
Head Vodka is filtered by an
unusual process using quartz
crystals and was born of a busi-
ness partnership between actor
Dan Akyroyd and artist John
Alexander. Roth says such pre-
mium offerings serve to retain and
upsell established customers, and
that LCBO is handling increasing
numbers of these unique high-
end products aimed at spirits
devotees and status-seekers.
McLean says LCBO’s brown-spirits
category has added new small-batch and
artisanal products as well, some from
major 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 of
American whiskey, are very new to Canada and
there is still not a lot of supply, but they have
been 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’s
Original Bourbon [U.S.A., 750 ml, $64.65] has
an interesting, 36-sided dice bottle with hand-
dipped wax and a small equestrian figurine on
top. 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 these
innovations encourage people to consume alcohol in
increasing, ever more dangerous, amounts? Research
has shown this is not the case.
Rather,alcohol can be categorized as a mature product,
meaning consumers are already aware of the product
and its basic characteristics. Thus, overall consumption
of the product is not significantly affected by advertis-
ing specific brands. In fact, a landmark study by Joseph
C. Fisher, Advertising, Alcohol Consumption, and Abuse:
A Worldwide Survey (1993), suggests that advertising
APRIL 2012 • PRINTACTION • 11
Packaging Spirits

3. has no impact whatsoever on either alcohol consump-
tion or alcohol abuse. Under Fisher’s findings, if adver-
tising cannot increase total alcohol consumption, the
most alcohol advertisers can achieve is either to
strengthen the loyalty of their established customers or
else gain market share by inducing new customers to
try their brand or to have other brands’ customers
to switch.
A bottle of spice,
gin rebirth and whiskey
Roth reports that LCBO’s rum category is grow-
ing well at 4.7 percent. Again, the key driver for
rum is the flavoured segment – in this case
meaning rum flavoured with spices – a
product now growing at an amazing rate
of 29 percent. “The trend started with
the success of Captain Morgan Spiced
Rum (Canada, 750 ml $28.45) and has
grown significantly, with the newest en-
trants being Malibu Black Coconut
Flavoured Rum (Canada, 750 ml,
$27.95), which has the characteristics
of a liqueur, and Bacardi Oakheart
Spiced Rum (U.S.A., 750 ml, $28.45),
which is based on amber Bacardi
rums aged in oak barrels plus vanilla
flavouring,” explains Roth.
Their number-one seller is The
Kraken Black Space Rum (Trinidad
and Tobago, 750 ml, $27.95), a brand
launched over a year ago, with an indi-
vidualistically shaped proprietary bot-
tle depicting the kraken (a monstrous
mythological squid) on its convention-
ally stuck-on paper label. Roth says, as
with vodka consumers, seasoned rum
customers are trading up to higher-end
aged products that currently show
10.9-percent growth (for example, Pyrat XO Reserve
Rum, Guyana, 750 ml, $44.95).
Roth cites gin as a remarkable success story: After a
long stretch of flat or declining sales, the spirit is now
experiencing a resurgence of interest and current
growth of 4.7 percent. “Gin is basically vodka steeped
with juniper berries or other botanicals,” explains
Roth.“People are transferring from vodka to gin
because they want more flavour and the com-
plexity gin adds to cocktails.
“Deluxe gins in particular have been growing
at a phenomenal rate of 42 percent,” she adds.
“Most of the interest in the higher priced gin and
vodka offerings is because of the status associ-
ated with premium brands.”Although gin
is still a relatively small category, she
says the LCBO intends to keep adding
new products in the near future to
build it.
“In my categories, suppliers have
been looking at designing distinctive,
high-impact bottles to enforce their
brand identity and call out their prod-
uct on the shelf,” says Roth. “The
Kraken’s bottle and Crystal Head
Vodka’s container are among the more
extreme examples. Other propri-
etary bottles that have im-
pressed us lately include
Chambord Flavored Vodka
[France, 750 ml, $34.95,
flavoured with Chambord
Black Raspberry Liqueur]
and No. 3 London Dry
Gin [England, 750 ml,
$49.95 ], a new green bottle
that looks as if an antique key
has been pressed into it. The
key 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’s
manufacturers, Berry Bros. & Rudd, have operated
since 1698.
“Alternatively, suppliers are calling out key attributes
of 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 bottlethat is stouter,
squared off, and metallic copper in colour to represent
the copper-kettle manufacturing
method used to produce it. The
name and packaging of Beefeater
24 [England, 750 ml, $32.95]
emphasize the 24 hours during
which the product is steeped in
botanicals. More deluxe gins
tend to have packaging that
12 • PRINTACTION • APRIL 2012
Continued on page 27

4. APRIL 2012 • PRINTACTION • 27
is tall, slim and elegant.
Clearly, manufacturers are
capitalizing on all these trends
to make their products
more appealing and
distinctive to con-
sumers.”
“A lot of my brands
are whiskies,” says
McLean. “Canadian
and Scotch whiskies
both have fairly long,
uninterrupted histo-
ries, and there’s not a
lot of innovation in
the liquid, the brand-
ing or the positioning
of the product to the
customer. The demo-
graphic who drinks
it is getting older, so
the product is not
bringing in many new
customers.
“But manufactur-
ing of both Irish and
American whiskies was interrupted
for a long time by historical events:
Prohibition in the U.S. and taxes
or wars with the Irish. Only re-
cently, in the last 20 years, have
the products begun to get up
and running again. The result is
that they are both now growing
faster than Scotch and Canadian
whiskies, mimicking the same ef-
fect that is happening with vodka
and rum.” Over the last four
years, LCBO’s American whiskey
sales grew 13 percent, and during
the same period, Irish whiskey
has grown 17 percent consis-
tently year over year.
Honey, low-cal
and ready to drink
McLean continues: “The Ameri-
can and Irish categories are domi-
nated by two large brands [respectively]:
Jack Daniel’s and Jamieson. Both are very
iconic from a branding perspective and
have not changed their packaging a lot.
Some bourbons and Irish whiskies are
more creative with their packaging, but
compared to vodka and gin, there hasn’t
been as much innovation.
“But this year Jack Daniel’s launched its
first new brand extension in 40 years: Jack
Daniel’s Tennessee Honey, a honey-
flavoured bourbon in a bottle made in the
same mould as the traditional Jack Daniel’s
bottle, but with a lighter label trying to
reach the female drinker.Brown spirits still
know their core customers are men, but
women will try the sweeter product, be-
cause it’s more palatable. On average, con-
sumers of whiskies are 70 percent male
and 30 percent female. But newer
advertising is aimed at teaching
consumers that bourbon is as
mixable as vodka in drinks like
Jack and Ginger [ginger ale] and
Jack and Jill [Jack Daniel’s and rootbeer
schnapps shaken over ice and served up as
a shot]. Their more deluxe product, Jack
Daniel’s Single Barrel Whiskey [U.S.A.,750
ml, $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 specifically
targeting females, such as Van
Gogh Vodka [a brand that in-
cludes flavours like Dutch
caramel, espresso, pomegranate,
and peanut butter and jelly] are
coming in this year. Vodka sup-
pliers are finding a marketing
opportunity to women they had
previously ignored.”
McLean notes, that in the last
year and a half, Jack Daniel’s has
also entered the Ready to Drink
(RTD) market – consisting of
coolers and pre-mixed cocktails
– with its iconic branding
replicated into a carton for-
mat containing Jack &
Cola, Jack & Diet Cola, or
Jack & Ginger [U.S.A., 4-
pack carton of 355 ml
cans, $9.94]. “Lots of spe-
cific spirit brands are
leveraging RTD as an
entry point for consumers
from the legal drink-
ing age up to 25
years old, hoping
to trade them
up eventually into
the spirits cate-
gories,”adds Roth.
McLean con-
cludes by saying
that, although
only four coun-
tries like Canada,
the U.S., Scot-
land, and Ireland
have traditionally
produced the
world’s supply of
whiskeys, they
are now facing
competition from
many other countries that have
started manufacturing this spirit,
including France, Sweden, Taiwan, and
the Czech Republic. Presumably, this
new international development will
translate into even more and growing
diversity in the spirits appearing on
LCBO’s shelves.
Victoria Gaitskell is keen to exchange ideas
with readers at victoria@printaction.com
Gaitskell
Continued from page 12
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