Corby Spirit and Wine Limited (CSWA) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to today's Virtual Non-Deal Roadshow. My name is Karina Tatarinova, and I will be your virtual event moderator for today's presentation. On behalf of our entire team here at Renmark, we'd like to thank all of you, and especially those of you in Atlanta and surrounding areas, for joining us today for the presentation of Corby Spirit and Wine Limited, trading on the Toronto Stock Exchange under ticker symbol CSW.A and CSW.B. Presenting today, we have Nicolas Krantz, President and Chief Executive Officer; as well as Edward Mayle, Vice President and Chief Financial Officer. This presentation will last approximately 25 minutes, which will follow a formal Q&A that we encourage you to participate in. And with that, I will now turn the floor over to Nicolas.

Thank you, Karina. And good afternoon, everyone. Well, I hope you are all well, and thank you for attending this call and giving us the opportunity to present our company, Corby Spirit and Wine. Let me start by introducing myself briefly. My name is Nicolas Krantz, and I am the President and CEO of Corby, and I joined the company based in Toronto last summer. I'm privileged to have been working in the spirits and wine industry for 22 years now in various roles in finance, strategy, operations and general management, and as well in different countries like France, the U.K., Australia and Spain. I will be presenting today with my colleague, Edward Mayle, our CFO. And before we start, I would like to thank the team at Renmark for supporting us today. They've done a great job. It is actually our first VNDR in the Toronto area, so we are delighted. Let's get started. So just a quick word about forward-looking information. I'm sure you are all used to this type of statement. Our comments today will be historically focused mainly, and as you know, any forward-looking statements involve risks. So Corby will, of course, provide updates to any forward-looking statements as required in our disclosure documents. All right. So as a matter of brief introduction, what is Corby? Well, we are the #1 TSX-listed spirits and wine company in Canada. And the Canadian market is an important market in the global map of the spirits and wine industry, ranking last year #11 and probably this year #10 worldwide. And in this market, we are the #2 player. In a nutshell, we are brand builders with a portfolio of iconic Canadian and international brands. And as Ed will show you later, we generate steady earnings and cash flow. Corby has been around for a while. Our company's rich history actually predate Canadian confederation. And entrepreneurs like William Gooderham, James Ward, J.P. Wiser's, Hiram Walker and Henry Corby, of course, are a big part of our heritage. So Corby began distilling whiskey in 1859. And as the business grew, he and the others helped build Canada as we know it today. So listed in the Toronto Stock Exchange in 1969, the majority shareholding was acquired by the group Pernod Ricard in 2005 as part of the acquisition of Allied Domecq. With an amazing growth story, Pernod Ricard, listed on the Paris Stock Exchange, has become the global #2 of the spirits and wine industry. And as a company, we see today our mission as building bonds that celebrate the human spirit. We see our brands playing a key role to create those magical congenial moments between people. And I have to say that maybe the need for human connection has never been more important than today. Before speaking about our portfolio and our business, I would like to give you a sense of the size of the market in which we are operating in Canada. But it's -- the market, it's the beverage alcohol industry in Canada. It's a multibillion-dollar market, with spirits and wine, of course, presenting together the majority of this market with a retail value of nearly $15 billion. The Canadian spirit and wine market is regulated by provincial government monopolies in Canada. They are in charge of importation, distribution and retailing. And as a result, our largest customer, the LCBO, or Liquor Control Board of Ontario, is, in fact, the largest alcohol retailer in the world. The situation is, however, evolving as some provinces like British Columbia and Alberta have progressively opened their market to private retailers. So you will not be surprised to see that nearly 2/3 of the market in value is in Ontario and Québec combined. The 2 key channels of spirit and wine distribution are on the one hand, what we call the off-premise, typically the bigger stores, and on the other hand, the on-premise, restaurants, cafe, bar, clubs, where the products are consumed effectively on-premise. Well in Canada, the off-premise represent about 90% of the market versus 10% for the on-premise. Of course, with the pandemic, on-premise sales have declined severely by more than half, but the off-premise sales have accelerated. In terms of trends, the Canadian market is a dynamic market, and I would like to highlight 3 key points. The market could be qualified as being relatively mature with a low single-digit growth, but the growth is often driven by innovations. The market usually sees a positive value realization with value ahead of volume as a result of positive pricing and mix effects. And this means that consumers are purchasing more premium products. Though in terms of recent evolution, we have seen very positive growth during 2020. Effectively, once the on-premise channel has been adversely impacted. The off-premise retail channel has been very dynamic with increased at-home consumption during the pandemic as the consumer look to indulge themselves at home. Now looking at the various categories of the spirits market. You can see that vodka, Canadian whiskey and rum are the 3 largest categories above $1 billion retail value, and that all the categories are showing solid growth, double-digit increase, for example, of the gin and the liquor categories. And in most categories, Corby has a significant market share, in particular in the whiskey categories, where Corby is the #1 overall. Now as a result, Corby has a strong market position, overall 17% share of the spirits, with 3 of the top 10 brands in Canada and with a position of #2 in the Canadian spirit market. And as I mentioned, we are the market leader in Canadian whiskey. We are also present in the wine category. It is a much more fragmented market than the spirit. And we are focused only around some key country of origin as we are representing wines from America, mainly from Australia and New Zealand and Spain and from the wine group with California in origin. Now let me introduce one of the core aspects of our strategy, our consumer-centric approach. Our job is really to put the right brand in the hands of the right consumer at the right moment of consumption. A consumer doesn't look simply for whiskey, vodka, gin or wine. They are looking for a brand that will fit with an occasion they want to have, a relaxing moment to sip a drink. A more sophisticated evening when they want to share a cocktail, for example, or drink to have before or during a casual meal. So if you have a group of 4 friends together, with 4 different drinks, what define the choice is the occasion, and that's what is important to them. So we define some key occasions, and we segment our consumer needs and aspiration. And therefore, instead of presenting our portfolio of brands, by category, I would like to show you that we have the most diverse portfolio in the market with amazing brands covering all categories and more importantly, all key consumer occasions. This is how we create value for our consumers. So you may recognize some of our key brands as we have a great mix of them in our portfolio. From long-standing Canadian favorites like J.P. Wiser's or Polar Ice Vodka, but of course, to big international spiritual brands like Absolut, Jameson, Beefeater, Malibu, Kahlua or The Glenlivet. We also have some emerging home ground brands like Ungava Gin and Cabot Trail from Québec, or craft brand, like the award-winning Lot 40 and Pike Creek. And of course, we have Zins sparkling wine, as I said, like Jacob's Creek. So all these strong brands play a role and are answering consumer needs driven by occasions. Now there is one brand I would like to spend a few minutes on is our flagship brand, J.P. Wiser's. The brand was founded in 1857, as I mentioned before, older than Canada as a country. So you can imagine the brand has an amazing history and still stands strong today at 800,000 cases. It is a key brand in our portfolio, and it is actually a very significant brand in the Canadian market, ranking as #5 spirit brand in Canada overall. So J.P. Wiser's has a bright history and scale, as we have seen. And our more recently effort and focus has been to transform the brand into a premium powerhouse brand within the Canadian whiskey category. So I would like to share with you 3 key recent initiatives, and they are quite illustrative and typical of what we do to boost the brand performance. These are around packaging evolution for the bottle to be more contemporary and distinctive on shelf, but also portfolio management, guided by the understanding of our consumer needs. Today, for example, our range of function targets convenience and an approachable entry point into whiskey to deliver against our recruitment ambition. So we launched successfully, ready to serve cocktails, Old-Fashioned and Manhattan, 2 iconic whiskey cocktails. And Old-Fashioned is already the #2 innovation in the category. And the third initiative is what we call the consumer engagement. This is our communication platform. Our objective was to evolve our communication towards social connectivity and friendship and supported by new visual identity, better representative of our inclusive and approachable premium whiskey, so with our good illustration of our consumer-centric approach to brand building. So what we have seen with J.P. Wiser's, our ability to innovate constantly is key. And this is true across our portfolio. Innovation is a key growth driver across all spirits and wine categories. So we always build what we call a pipeline of purposeful innovation. Some are launched nationally and some others are launched first regionally in 1 province, for example, to test and learn and then roll out nationally later on. And we do this always with a strong collaboration and planning with our customers and liquor boards, sharing relevant consumer insights and trends. And it usually takes around 12 to 18 months through the line. Now while our main battleground is the Canadian domestic market, we also export some of our Canadian brands. However, the export markets are currently only 10% of our volumes and open, therefore, a great opportunity to unlock profit growth. Simple fact that really got my attention when I joined Corby is that the Canadian whiskey is the #1 imported whiskey category in the U.S., and we are still a very small volume base there. So a lot of room for growth. The other market to call out is the U.K. where we have rejuvenated our brand Lamb's Rum with a new packaging and a spiced rum innovation. And today, the brand is #4 in the dynamic spicy rum category in the U.K. and enjoying one of the fastest growth were 2 good examples in terms of export markets. Now I could not talk about our business without mentioning our commitment to sustainability and responsibility or what we call S&R. It is truly embedded in our business model today. We summarize this with a simple mission aiming at bringing good times from a good place to create a more convenient world without excess. And it is really our compassion in everything we do. It is quite simply articulated around 4 pillars valuing people, nurturing terroir, circular making and responsible hosting. And of course, as a key player in the wine and spirit industry, we are committed to fighting alcohol misuse and create better ways to live and work together. We also do support our communities and partners, and I am very proud, for example, that the teams at Corby and Hiram Walker Distillery came together with government officials to develop a plan for producing and donating over 200,000 liters of hand sanitizers to nursery homes, hospital and frontline workers during the first phase of the pandemic. It was also important for us to help the hard-hit hospitality sector impacted by closure of restaurants and bars, and we've done that with several donation to the Bartender Benevolent Fund of Canada. And finally, we proud ourselves to create connections between people with our brands. So with that mindset, we are committed to always create a better workplace with diversity and inclusiveness. So to wrap up my short section. Let me summarize briefly what we believe is a winning business model for growth and value creation. We have a portfolio of strong brands covering all major categories and consumer occasions. Corby has its own dedicated and experienced sales force across the whole country. Our strategy of premiumization is supported by dynamic revenue growth management and innovation pipeline. And some key export markets represent a great opportunity to accelerate our growth in the future. And finally, we have the capacity and the capability to do some bolt-on acquisition to strengthen further our business. Now as a company, we also have great data. And that's not the case of every company or every industry. So we are leveraging that to an ambitious digital transformation to build a competitive advantage to create new opportunities like e-commerce or to connect better with our consumers and to continuously improve our efficiencies and effectiveness, leveraging this data-rich environment in which we are. So Corby has a clear and robust strategy and that's a job now of the management team to deliver a successful execution. Yes, Corby's top management is a team, and this is how we work, and this is how we win. I am very lucky to have a fantastic team of experienced and diverse professional and executive. I will let Ed, of course, introduce himself in a minute. Where we have a great mix of international experience with Caroline, our VP marketing, who worked in the U.S., in China, in Ireland. Mark as well worked in the U.K., for example, in Eastern Europe, our VP Sales. But we also have a lot of Canadian with industry experience, with Stéphane, Melissa and Mark, who have each of them about 20 years or more of experience in the spirits industry in Canada. And we are all supported by strong talent with Valerie and Vanita. Val has been working in comms and public relation for Microsoft, Nissan or Marriott Hotels. And Vanita, our HR Director, who came to Corby after working in a leadership position at various Canadian companies such as Shoppers Drug Mart, Loblaws and Rogers Communications. So a team of talented and passionate people who have become expert, of course, in working virtually together this year, as you can imagine. Okay. Let me pass on to Ed to present the key financial aspects of the company. Over to you, Ed.

Thank you, Nicolas, and good afternoon, everyone. So my name is Ed Mayle. I'm the VP, CFO for Corby. And like Nicolas, I'm 22 years with Pernod Ricard, having spent the majority of my career in Europe, working across Ireland, the Czech Republic, Sweden and the U.K., various CFO roles for Pernod Ricard affiliate before joining Corby, a little over 2 or 2.5 years ago. Now before discussing extracts from Corby's latest financial statements, I'd like to take a few moments to explain a little about Corby's capital structure. And then to explain the key features that we can see when we look at Corby's financials before turning to a description of our first half performance for the 6 months to December. Corby's fiscal year runs from July through to June. So on this slide, I'm showing 3 elements of Corby's capital structure I'd like to call out. The first is Pernod Ricard's majority stake in Corby. Pernod Ricard pursued a series of acquisition during the 2000s, beginning with Seagrams at the start of the decade and ending with the Absolut company in 2008. In 2005, Pernod Ricard, along with Beam Suntory, acquired Allied Domecq with the assets split between them. Pernod acquired Hiram Walker, which was the owner of the majority stake in Corby. At that time, Pernod Ricard had only a small distribution business in Canada, but through the acquisition of Corby was able to take a much stronger market position. Secondly, the relationship between the 2 companies is governed through a series of agreements. The first of these is a representation agreement through which Corby is the distributor of Pernod Ricard's portfolio in Canada. The original agreement is coming to an end and Corby has recently concluded a new 5-year agreement beginning first of July 2021 and Corby will pay to Pernod Ricard an upfront fee in September 2021. Pernod Ricard through Hiram Walker is the producer of much of Corby's portfolio, particularly, of course, it's whiskeys. And they also provide Corby a range of back-office services delivered through a shared services structure, covering services like accounting and IT. And thirdly, looking at the share structure, Corby has 2 share classes, A shares and B shares. The A shares have voting rights, of which Pernod Ricard owns 51.6%, and therefore, its majority rights; and the B shares, which have no voting rights. Both crises of shares are treated equally for dividend entitlement. And aside from Pernod Ricard, there's no other major shareholder above 10%. Those remaining shares are owned by a mix of institutions, retail investors and employees. Now Corby's financial performance is understood in the first instance through the measurement of volume sales in units of 9-liter cases, where 1 case is made up of 12 750-milliliter bottles. We report in our MD&A, depletion volumes. These are sell-out volumes in Canada, as reported by our customers, and this gives a clear view of our brand performance in the market. The second view of volume is our shipments, which are the sales of products invoiced to our customers made by Corby. And this directly drives our P&L revenue. Our revenues are generated from 3 sources. So the first is those shipment volumes. So the sales of Corby-owned products, primarily in Canada, and also to a smaller degree in the rest of the world, such as U.S. and the U.K. and Case Goods revenue in 2020 were $121 million out of the total revenue of $153 million and earned a gross margin of 52%. Now the second source of revenue is from our commission income. And as Nicolas mentioned, we have 2 portfolios we represent, the major one, of course, being the Pernod Ricard portfolio; and the second being a wine portfolio from the wine group. Commission income is reported net of the amortization of the upfront fee. So commission income in 2020 was $28 million, reported net of $5.8 million amortization. And I'd like to highlight for next year as the new representation agreement comes into effect, amortization will increase as the new fee is amortized over the life of the new agreement. Then the third revenue source is from other services. This covers sales of bulk whiskeys and incidental services. And in 2020, it's generated revenue of $4 million. Then marketing and sales expenses are deducted to bring us to our earnings. Marketing expenses on represented brands are recharged to the brand owners, while we retain in the P&L, the investments related to the Corby-owned brands. Sales and administration expenses for servicing all parts of the portfolio are retained within Corby's results. Then full year net earnings in 2020 were $26.7 million, so $0.94 per share. And then on the balance sheet, we reported shareholders' equity of $173 million, and I draw attention to 2 features. Firstly, our cash generation, which will usually be running significantly ahead of net earnings due to the P&L bearing the annual amortization of the upfront fee. In fiscal '20, for net earnings of $27 million, we had a cash generation of $49.5 million, favorably impacted by working capital effects driven in large part by the COVID virus effect. We have cash deposits of just shy of $82 million. And the second feature to highlight is our property, plant and equipment. Corby is relatively asset-light, as its production is largely outsourced to Hiram Walker. Our annual capital investments relate to barrel purchases to store new whiskeys, IT investments or investments in our wholly owned production sites. And we have 2 small facilities that we own and manage directly, a facility in Québec and a facility in Niagara. And CapEx in 2020 was a relatively modest $3 million. So then the major use of the cash generation is to fund Corby's generous dividend policy. We recognize many investors are attracted to copy due to its stable and resilient cash flows and its high dividend payout. Our policy aims to pay at 90% of the prior year earnings paid through 4 quarterly payments. And the actual payment is, of course, subject to approval from the Board of Directors. So now a very quick summary, look at our current H1 performance. Our first half takes place, of course, within the context of the exceptional COVID-19 pandemic and related economic volatility. We enjoyed a growth of 4% in revenue and due to lower marketing sales and administration expenses, notably a result of reduced marketing investments in the on-premise channel and reduced business travel caused by lockdown, we enjoyed unusually strong H1 earnings of plus 30%. And then on cash, we generated $20.9 million, slightly up on last year. Now some highlights from our brand performance. Our flagship brand, J.P. Wiser's, grew 4% in volume and enjoyed a strong value conversion with 7% value growth. The Ungava Spirits brands grew 5%, but product mix subdued value growth. Then Polar Ice Vodka was particularly negatively impacted by the closure of the on-premise sector. And McGuinness liqueurs enjoyed a boost from home cocktail making while Lamb's Rum benefited from the strong performance in the U.K. and our commission income on represented brands grew strongly, up 7%. And then finally, repeating what we saw on the H1, that is the June to December summary, we enjoyed a strong earnings growth, plus 30%, with solid revenue growth amplified by a low-cost base, reflecting the exceptional circumstances of the COVID environment. So that concludes my introduction to Corby's financials. So I'll hand you back now to Nicolas for a wrap up.

Thank you, Ed, for the summary view of our financials. Very clear. Well, I hope this short presentation gave you a good introduction to our company. And to conclude, and before we open for Q&A, let me articulate some key reasons why to invest in Corby. And if you had to remember just 3 things from today, I would simply spotlight that: one, we have strong financials that provide consistency and visibility; two, we have a robust business model with a successful track record; and three, we have talented and passionate people, led by a strong and diverse management team. So with that, let me thank you very much for your attention, and we are at your disposal, now with Ed, if there are any questions. So up to you, Karina, to open and moderate the Q&A session. Thank you very much.

Thank you very much for the presentation Edward and Nicolas. And, yes, we will now move on right now to the Q&A session. Your first question, what is the value growth? And what are you using to depict value? Who would like to take this question? Edward?

So thank you. If I understand the question then we're talking there about the value growth on the presentation. So if we just jump back here. When we talk about the value here, this is market value. So this is our market performance. I do beg your pardon. It's our financial performance-based on our shipments value. So it's going to be shipment volume and the value of the sales made to our customers. In our disclosed MD&A statement, you'll also see there our market depletions in terms of the volume, which is subsequently sold from our customers to our consumers. So this is value in terms of revenue in our financial statements.

Thank you. And your next question, is there any interest in expanding into the United States?

Yes. Thank you very much for the question. As I mentioned briefly in the presentation, the U.S., of course, is the largest spirits market in the world. It's a very attractive market. So we are playing in this market, but at a small-scale for now, as I mentioned, because it's only 10% of our volumes. The main attraction we see for us is indeed on the Canadian whiskey category, as I mentioned, the largest imported whiskey category, which I discovered that -- not that long ago, ahead of Scotch and Irish whiskey. So there is definitely a right to play in this market. So we are already present with J.P. Wiser's in many states. We are in 39 states already and having a fairly good distribution, but we want to have a strategy, I would call, of a slow build to make sure that we build with a strong foundation instead of going nationally and with a big investment campaign, which could be somewhat diluted. So we're going to work really by city-by-city on the state where, of course, there are big whiskey states in the U.S. So definitely, it's a very important market for us, very much part of our mission in terms of the long-term journey of Corby and this is what we are doing. We're working with the distributor in the U.S. who is basically overseeing that part of the portfolio. And we have a dynamic plan ahead for the part of the business. So definitely expanding in the U.S., mainly with our Canadian whiskey portfolio will be the strategy going forward.

Thank you. And your next question. Do you represent yourselves? Or do you use agencies? Who will take this question?

So I guess the question is as well in the U.S. So basically, we work with a partner, 375 Park Avenue. So basically, they have basically the responsibility to import the brand in the U.S. and then they work, of course, with their network through the United States. So they have a large portfolio with many other brands. And basically, we are customizing what we call our role to market city-by-city, of course, targeting the right retail outlet. And on on-premise outlets if one is relevant. So we don't go directly. We go with a partner.

Thank you. And on that note, a viewer is asking, how much cash have you allocated towards marketing and advertising on an annual basis?

Yes. That's a good question. Now we don't actually disclose separately the marketing investment that we make behind the brands from the administration expenses. But obviously, what we have is a very active prioritization model to make sure that we're targeting our investments at the right brands and through the right activities. So we have a model, which we call our spend segmentation through which we analyze the appropriate nature of our spend against each of the brands. So whether that is media spend, activation spend, on-premise and so on. One of the features that we've seen in our results, certainly this fiscal year and through the end of last fiscal year, was the impact of COVID, where we've had to dial back, obviously, our activity in the on-premise and our experiential events, and to shift the focus towards media.

Thank you. And your following question, if you were hearing comments and saying, love the company, consistent cash flows, a great balance sheet and brands. With such a strong cash position, is there interest to acquire other brands? And what are the plans to grow sales going forward?

Yes. Thank you. Excellent question. As Nicolas explained, our overall strategy is brand building and value creation. Now as a result, we maintain a constant monitoring of appropriate acquisition opportunities when it comes to enriching the portfolio. But we also obviously have to be very careful in terms of overall value creation for shareholders. And so it's an ongoing exercise. Within the portfolio that we display today, there are some examples of relatively recent acquisitions. The Ungava Spirits Co. was acquired just a short number of years ago and has an iconic Ungava Gin and as well the Cabot Trail Cream Liqueur. So it's something, which we are conscious of to leverage the strength of our balance sheet, but it always comes down to the right brand at the right price. And what we're not looking to do is simply to buy something, which isn't going to be able to create value for the company. We're obviously able, when it comes to acquisition to exploit, from a synergy point of view, the deep expertise that we have in Hiram Walker when it comes to whiskey production and, of course, to leverage the superb go-to-market that we have in Canada and the marketing expertise that we've got in our Toronto marketing team. So it's very much on a case-by-case basis that we explore for acquisition opportunity. And perhaps, Nicolas, you've got something that you might like to add to that comment as well.

Thank you, Ed. No, I think you illustrated that very clearly. It is part very much of our strategic road map. But as I mentioned, it's about value creation. So we need to make sure that we find a good complementary. And yes, the regional play is probably an interesting feature. Similarly, when the company did acquisition in Québec, that was really bringing us more muscles in that important product. We know that there are a different plain in Canada, and we're always very attentive, I would say, to the market and find this complementary opportunity that would be doing the right thing for our portfolio. So we have an active portfolio management, absolutely.

Thank you, Edward and Nicolas. And now your next question. Do you have access to revenue data on the market as a whole that you can comment on? Who would like to take this question? Nicolas?

So as I mentioned, we -- Canada is quite an amazing market in terms of transparency and data availability. So we do have access to good data. If I want to summarize briefly the situation of the pandemic period and it is quite similar to what has happened in the United States, actually, in terms of macro trends. So the on-premise channel, which is less important in Canada than in the U.S. I mean, it's roughly 30%, 40% in the U.S., it's about 10% in Canada. So it's a less important channel in Canada. But that, however though, which is important, has declined strongly, minus 60% this year. It's not a surprise given all the lockdown and the restrictions. So that has been a key feature of the industry. And we try, of course, to stay very close to our on-premise customers and partner to support them and to prepare for the rebound because things will rebound, and the channel will reopen and people will go back to bars and restaurants and enjoy themselves in those outlets. On the off-premise or the retail channel, it's been extremely dynamic, and we have seen growth, double digit growth, not probably never before and in actually in the 18%, 19%, 20% depending on categories. We have seen some categories, like in the United States, like the cream liqueur categories, for example, which were necessarily not the most dynamic category in the past, growing 25%, 30%. So overall, the off-premise market is growing until the end of February very dynamically, around 18%. It's fair to say that everybody will understand that the -- we are expecting an effect of the comparison basis with last year because from March last year, we have this [ country loading ] effect that has happened in March and also during the last quarter of the year with very strong growth from the retail sector. So there will be a balancing effect as we expect. But overall, the market has been very dynamic. And therefore, on a net basis, the spirits market is growing around 9% to 10% in value. And the wine market is growing around 5% in value until the end of February, and to the overall market. So quite a dynamic market for any standard. I think globally speaking, I think the U.S. and Canada has one of the rare market where spirit consumptions have actually, on a net-net basis increased.

Thank you, Nicolas. And since you're on the topic of revenue, a viewer was asking what is the split in sales between domestic versus imported spirit and wine products?

Ed, do you want to take this one?

[Foreign Language] Lovely, thank you. Yes. In terms of overall volume, the portfolio mix is in the domestic market, roughly 50-50 between the Corby-owned portfolio and the Pernod Ricard portfolio. But obviously, the categories are very, very different. So the Corby portfolio, and we highlighted some of the kind of the head, if you like, of the portfolio, led by J.P. Wiser's family, but also brands like Ungava, but we have within the tail, a range of more standard brands such as Royal Reserve, Canadian Whisky and special blend Canadian whiskey. While the Pernod Ricard portfolio, representing, of course, international brands is generally a much more dynamic -- it's a much more dynamic footprint than the Corby portfolio. But roughly, they're about 50-50 in terms of overall volume footprint. And then between the domestic market and the export market, the export market at the moment in volume split is about 10% of our branded volume.

Thank you. And following on to your next questions. A viewer is asking, how does the company view the current growing offering of low alcohol or no alcohol options? Is this a trend of what you see in the market or more of a fad?

Yes. Thank you for the question. Well, it is clearly a trend. And I would say that through the last period, we've seen many different trends in the market, which I believe will be here to stay. They are -- you never know how long a trend will last. But I would say this flow of no alcohol trend is a trend that we see in many different markets in the world, not just in North America. That's in terms of macro trend, it's about well-being and doing the good thing for yourself. So there is much more offering in that space. This is probably a nice place as well in terms of convenience at the [ F&B ] category has seen a very strong growth over the last period. And I would say that that's what the role of innovation. The role of innovation is to actually really understand what the consumer wants and bring the right value proposition. So in terms of the low alcohol, you've seen that, in spirits, actually, we haven't launched in Canada this element. But what we've done, for example, we have this ready-to-pour cocktail, which we grew into this -- both the convenience element, which, again, a consumer wants something, which is convenient to consumer. And also with a slightly low alcohol. So basically, you mix that with cocktail. So there is definitely a trend there. And we see some brand. We have 2 brands in the -- belonging to the Pernod Ricard Group, Ballantine's and Beefeater gin, Ballantine whiskey, which have been launched with half the usual ABV. So that's more launched in some markets as a pilot and see whether they would be, later on, rolled out. But overall I believe this trend of low alcohol will remain and will be a key feature of the market. Again, it's all about expanding the repertoire and the choice for consumers. It doesn't have to take precedent for others, but it's an element which I believe will be part of the landscape. And therefore, some innovation will be definitely building on those consumer insights.

Thank you, Nicolas. And since another trend that's been coming up is cannabis-infused drinks. A viewer is asking, what is management's opinion of cannabis-infused drinks? And do you see it as a possible market for Corby?

Yes. It's a question we often have. Maybe just on cannabis. It's been around for a while, and it's been around in parallel of the spirits industry. There is, of course, a lot of hype over the last few years on that. But we haven't seen a lot of evidence that this is impacting our business. In fact, over the recent years, not at all. So I think the main difference between cannabis and our business is the branding. I mean we are in the branding business. We are building brands. This is where we are about. As I mentioned, it's about bringing the right brand to the right occasions. And I think we don't see the cannabis being, I would say, part of the repertoire. Now there is some blurry categories, which are popping up. It is clear. As of now, we are, like always, we're always observing what's happening in the market, for sure, but we don't have a plan to go into this space in the near future.

Thank you for clarifying on that, and we're coming up on your last 3 questions here. The next question, how many production facilities do you have?

So Corby has 2 owned production facilities. So we have a site in Cowansville in Québec for the Ungava Spirit brand family. And we have a small winery, a foreign affair winery in the Niagara wine-growing region. Our major production is outsourced to the Pernod Ricard facility at Hiram Walker, which is the producer then of our Canadian whiskeys. And that's where the vast majority of our products are produced.

Thank you. And your next question is more of a geographical question, and it is why have you not entered the market in Northwest territories, Yukon and Nunavut?

Yes. If that was the impression that we gave on the geography slide, then that's not quite accurate. We are, of course, present with the footprint across all provinces in Canada.

Thank you for clarifying that as well. And your last question, which you have touched on quickly, but if -- for anyone who missed it, if you can just talk about this once more. What are the lasting effects of the coronavirus on the company's operations?

Yes, and good concluding question. Well, listen, I think maybe the first thing I can say that it's been, of course, a year unprecedented where we've seen an amazing commitment from all of our staff. I think you all -- to some degree, we were guided by a very simple priority, which was to keep our people safe. And I think the thing -- only everything has been in place so far. It's been a very tough year to make sure that people were able to operate. So some people virtually, some people still working with customers in the production facilities. So that has been our main priority of the year. We've been able to keep all year-long business continuity from the production to the supply chain to the sales. So I think this is something, which has been quite remarkable. And overall, there has been, of course, we -- you hear that from anywhere in the world, but keeping the staff with a high moral and basically connected has been, of course, a lot of effort from part of the management to keep that going. From a business standpoint, as I mentioned, it's a bit of a strange year because it's been, on the one hand, extremely challenging from an operational standpoint and keep it going. But the business has been very resilient. And I think this is another feature that is part of our category industry, but also as a company, we've been extremely resilient, being able to ride that storm and as you have seen in our numbers, delivered some good growth. Our products are really -- our brands are really part of the repertoire of our consumers on a regular basis, on a weekly basis. I believe during this pandemic, all consumers have given themselves more permission to experiment different brand, different type of occasions. I think the cocktail, for example, which was a little bit seen as being intimidating, having a cocktail, maybe in the lounge bar or in the club. You have now consumers bringing those occasions at home. And there has been a lot of virtual testing, a lot of connection with our consumers. Needless to say that online sales are, of course, excluded. It's still a small channel in Canada, of course, for a little bit for regulatory reasons, but also from a simple reason. And I think this is going to, of course, see some growth going forward. Our key customers, the liqueur growers, are also jumping on that opportunity, what we call the omnichannel, which is to replicate what's happening in brick-and-mortar on the online is something that is going to accelerate, and we'll be able to connect with the consumer. So to some degree, this pandemic has been very challenging, but in the same time, a bit of a tipping point to accelerate a lot of initiatives in our company and in our industry.

Thank you. And on this note, this concludes the Q&A for today's presentation. Once again, thank you, Edward and Nicolas for joining us for the presentation today. And thank you to everyone who submitted questions. If you didn't get a chance to participate in the Q&A today, you can still do so by sending over the questions that you have to our appropriate account manager here at Renmark. And now before we go, I will turn the floor back over to Nicolas for his final remarks.

Thank you very much. Well, listen, just to say thank you to everyone for your attention. I hope we gave you a good sense of our company and what we stand for. We are in a very resilient and strong industry, that's for sure. And maybe the last word is to say, since we are in the greater area of Atlanta. J.P. Wiser's is actually present in Georgia is one of our main markets in the U.S. So I will invite you to test our brand among others, and join the family. So thank you very much for your attention.

And once again, this was Corby Spirit and Wine Limited, trading on the Toronto Stock Exchange under ticker symbol, CSW.A and CSW.B. Thank you again Atlanta and surrounding areas for joining us here for this presentation. Stay tuned for future presentations in your area, and we will see you next time.