Gruppo Campari, the Italian parent of Kentucky-based Wild Turkey bourbon, announced Wednesday that it has bought Forty Creek Distillery, maker of Canadian whiskey.
Campari announced the sale on the same day that the company released year-end results showing a 1.7 percent organic increase in sales globally, to 1.52 billion euros, with a 6.3 percent increase in sales in the American markets, driven by demand for the Wild Turkey family of spirits.
Campari CEO Bob Kunze-Concewitz said the company had strong sales in Russia and the United States, where Wild Turkey, its namesake Campari liqueur and Espolon tequila saw double-digit growth, helping to offset softness in Germany and in the ultra-competitive bourbon market of Australia.
Sales of the Skyy vodka franchise were flat, with organic growth of 2.7 percent out of flavored expressions.
The Wild Turkey franchise, which includes Russell's Reserve and American Honey, recorded organic growth of 6.1 percent, despite difficulties in the Australian ready-to-drink cocktail market.
Sales of Wild Turkey bourbon were up 11.4 percent and American Honey was up 8.7 percent, with the family of brands up 15.6 percent in the United States, the core market.
Campari successfully launched Wild Turkey Spiced and Forgiven in the United States and Australia, and it brought Wild Turkey 101 Rye Whiskey back to the U.S. market after a one-year absence, the company said.
These gains offset unexpected softness in demand for Wild Turkey Rare Ready to Drink, launched last year in Australia, the biggest bourbon market outside the United States.
Kunce-Concewitz said more expansions of the Wild Turkey franchise are in the works, but "I'd rather not spoil any surprises."
The Lawrenceburg distillery is scheduled to unveil its new visitor center in April and will release a Diamond Anniversary limited edition of its bourbon in honor of master distiller Jimmy Russell's 60 years at Wild Turkey. The Diamond bourbon, created by his son Eddie, will be available only at the new visitor center until fall. The release also will kick off "The Year of Jimmy Russell" with a documentary on his life and influence on bourbon.
Kunze-Concewitz said the 2013 results were "in line with expectations," and 2014 should build on momentum from a strong second half and a good start to the year, including the acquisition announced Wednesday, which gives the company a strong entry into the Canadian market.
Calling Ontario-based Forty Creek Distillery a "hidden gem," Kunze-Concewitz said the company bought 100 percent of the distillery and brands for $167 million, positioning Campari as the fifth-largest spirits company in Canada.
In 2012, Forty Creek Whisky sold about 80,000 nine-liter cases in the United States, according to the Adams Handbook. That volume makes it the seventh-largest Canadian whiskey in America and the fastest-growing.
The distillery also makes a selection of vodkas, rums and other specialty spirits.
The Canadian whiskey sector is growing nearly as fast as bourbon, Kunze-Concewitz said, with relatively little penetration outside the United States and Canada, giving the brand and the sector tremendous growth opportunities.
Forty Creek was founded in 1992 by John Hall, who built the brand into an award-winning whiskey. Hall will remain chairman of the company and its whiskey maker, according to Campari.
"Today's deal represents a milestone for myself and the entire Forty Creek team," Hall said in a statement. "I believe this opportunity will further support Forty Creek's vision to produce unique, quality, handcrafted Canadian-made spirits."
In the fiscal year that ends March 31, total net sales of Forty Creek Whisky are expected to be about $35.5 million, an increase of 15.6 percent over the previous year.