Queen rewards Scottish beer for Canadian sales success

On Tuesday this week Scottish brewer Innis & Gunn celebrated its second Queen’s Award for international trade in recognition of its export success.

Innis & Gunn beer was initially being used to flavour barrels for William Grant’s ale cask Scotch, before it was realised that the oak influence had produced a commercially-viable brew

Attending a ceremony at Buckingham Palace to collect the award were the brewer’s senior management as well as Peter Mielzynski, president of PMA, Innis & Gunn’s importer in Canada, where the brand is the biggest selling British bottled beer.

Speaking to the drinks business ahead of the ceremony, Mielzynski said that the dominant presence of Innis & Gunn in Canada was a result of fortuitous timing, market understanding and shrewd investment.

Despite importing almost entirely wines and spirits, Mielzynski had taken on the oak-aged beer in 2005, because Innis & Gunn chairman Tony Hunt was a director of PMA.

“We weren’t in the beer business, but I knew Tony Hunt – chairman of Innis & Gunn – who had been an overseas director on our board for many years, and when he brought the first bottles over to Toronto we thought the beer was delicious, so we agreed to help them.

“I remember saying that we could probably get the brand up to 2-3,000 cases eventually, but how wrong can you be – this year sales in Canada will be close to 500,000 cases, and the brand is accelerating.”

That makes Canada the largest market for Innis & Gunn, accounting for 40% of its sales, an impressive achievement for a label launched in 2003 as something of an accident – the beer was initially being used to flavour barrels for William Grant’s ale cask Scotch, before it was realised that the oak influence had produced a commercially-viable brew.

Initially, Mielzynski says the beer’s growth in Canada was a result of being in the right market at the right time.

“The timing of Innis & Gunn’s launch [in Canada] was perfect because it was a time when cottage breweries were starting to get popular and the consumer was getting tired of the mainstream beers out there.

“Also, Innis & Gunn was related to the single malt whisky market and that was hitting the roof,” he adds.

But the beer’s success was also due to the market-specific approach by Innis & Gunn, which priced the beer at the top of the Canadian beer category and then introduced a series of special editions just for the country – such as a Canada Day beer housed in a gift box decorated by a Canadian artist.

Despite a $5 price point, the beer sold out, encouraging Innis & Gunn to produce more line extensions specifically for the Canadian market, such as a rum-cask beer because Canadian consumers drink a lot of the dark spirit.

Innis & Gunn has also invested in sales personnel in the market, and this, together with the beers tailored for the Canadian market, as well as good timing, has not only meant the Scottish brew is the best selling bottled British beer in the market, but it is still growing.

Indeed, the beer is up by 10% in sales at present, which Mielzynski says is particularly impressive because the imported beer category is down 5.5% in the Liquor Control Board of Ontario (LCBO) as the retailer switches its focus to more profitable premium spirits.

UK-based Innis & Gunn chairman Tony Hunt also told db that a further factor in the Scottish beer’s Canadian success stems from the use of a wine and spirits distributor in the market.

“PMA is a highly successful company selling premium wines and spirits, it is not a beer company, so the PMA team are extremely enthusiastic about the beer and sell it as though it was a premium wine or spirit.”

Continuing, he said, “If we had gone to McKinsey [Consulting] and said, ‘where shall we export the beer’, they wouldn’t have said ‘go to Canada’, but it has been hugely successful thanks to our local partner.”

Looking ahead, Mielzynski says Innis & Gunn is now starting a project to install the beer on draft in Canadian pubs which don’t stock bottled beer, assuring db that the product on draft tastes as good as the beer in bottles.

Meanwhile, back in the UK, Hunt says he is working on a new initiative connected to his belief that craft lager has a strong future. “The UK is a very big lager market but there is very little with flavour and quality so we think there is an opportunity to make craft lager work in the UK, and that is a current project.”