IRISH WHISKEY SALES have risen by 300% in a decade and are predicted to double by 2020 and by 2030 to be in the region of 24m cases a year. Until a few years ago Irish whiskey was dominated by one company, Irish Distillers, which was a monopoly owning the two operating distilleries, Midleton near Cork and Bushmills in Northern Ireland. That has all changed. There are currently 18 working distilleries with a further 16 in the pipeline. Nevertheless, most of the Irish whiskey, certainly in bottle, has come from Midleton, now owned by France-based drinks giant Pernod Ricard. More of that later.

The outstanding brand is, of course, ID’s Jameson. Irish Distillers’ strategy, insight, innovation and prestige whiskeys director, Brendan Buckley, tells DI: “Irish whiskey is undergoing a global renaissance. Jameson continues to lead the Irish whiskey category globally and is the number one Irish whiskey in the world.

“Jameson recorded strong half-year results to the end of December 2017, with 12% organic sales growth, with all regions contributing to this success. The brand is now in double and triple-digit growth in 80 of the 130-plus markets in which it is sold around the world. While the growth has been driven by the US, Europe, Africa and the Middle East we have also seen a particularly strong growth coming in the Asian and Latin American markets,” he says.

“Consumers, particularly millennials, are showing signs of appreciating higher-end and super-premium products and at Irish Distillers we are well placed to meet this trend. Growth of our prestige range, led by Redbreast and Midleton Very Rare, reflects the growing consumer appetite for premium Irish whiskeys, and the resurgence of the time-honoured single pot still Irish whiskey,” says Buckley.

Pernod Ricard chairman and chief executive Alexandre Ricard, speaking at the recent half-year results briefing said that the company was over-investing in Jameson in the US as it was one of the Pernod brands driving top-line growth, along with The Glenlivet.

He singled out the Jameson Caskmates range as an example of what the company was doing to develop a brand and drive growth through innovation.

He said it had identified the trend for craft beer and for being local. To that end, Irish Distillers is looking to team up with brewers in major US cities to obtain beer casks to produce a ‘local’ version of Caskmates.

Tullamore Dew global ambassador John Quinn says: “The Irish whiskey market is in good health at the moment with double-digit growth globally and key markets such as the US showing no signs of stopping any time soon. Of course the category is dominated by a few of the bigger brands and these are driving the majority of the growth but it is allowing for all the newer (and therefore smaller) brands to catch the ride and show some really nice business growth themselves.

“Let’s remember that, while the category is growing very fast, at 9m cases we are still a long way behind scotch (90m), American whiskeys (40m) and Canadian (20m) – even Japanese whisky outsells Irish at this point.”

LOST CENTURY

Walsh Whiskey’s Bernard Walsh says: “The Irish whiskey category is continuing on its path towards a strong recovery following a lost century. Sales continue to grow at double-digit rates across all brand categories, in all key markets and the much-needed capacity expansion is being infused with the diversity of many new distilleries, such as Walsh Whiskey distillery, so that Irish whiskey is literally laying down a treasure trove for the consumer to explore in the years ahead.”

Created through a collaboration between Camus, the leading family-owned cognac producer, and the Baring Family’s Revelstoke Trust, the Lambay Irish Whiskey Company was launched last year.

“We have been looking at the Irish whiskey category for some time,” says Cyril Camus. “But until recently much of the business was in the hands of a few companies. That has changed, and the new Irish brands are exciting consumers. Lambay Irish whiskeys will be released in the US during the first quarter of 2018.

Lambay whiskey brand manager Sabine Sheehan says: “While final sales volume figures are not yet available for 2017, statistics from the IWA show that approximately 10m 9-litre cases (120m bottles) were sold in 2017, up from 8.7m cases in 2016.

“This puts Irish whiskey well on course to exceed a target of 12m cases by 2020, so we would be quite happy about that.”

Asked about the progress of its newly created Roe & Co brand, which was launched in March last year, Diageo’s president for Europe, Russia, Turkey, John Kennedy, tells DI that it was seeding the brand, thus taping into the burgeoning interest in Irish whiskey.

Having sold Bushmills to Jose Cuervo, Diageo believes there is an opportunity in what it regards as the niche and yet-to-be-exploited premium/super-premium arena. Irish Distillers would dispute that.

Diageo says it will continue to build on the George Roe heritage by converting the former Guinness Power House into a new distillery. The St James’s Gate distillery, close to Diageo’s Guinness brewery, will be situated just a stone’s throw from the spot where the George Roe and Co distillery once stood – apparently once Ireland’s largest distillery, extending over 17 acres. Production will begin in the first half of 2019.

On super-premium, the launch of the Dead Rabbit Irish whiskey by the Dublin Liberties Whiskey Company (part of Quintessential Brands Group), named after the legendary New York Irish bar which has featured in the list of the World’s 50 Best Bars numerous times, aims to “capture the edge and attitude” and recruit non-whiskey drinkers to the category, says DLWC’s Sinead O’Frighil, international marketing director.

She says: “Irish whiskey accounts for 4% of the global premium whiskey market share and is expected to increase to 12% by 2030.

“With super-premium Irish whiskey growing at an impressive rate of 12%, we see plenty of room for growth in the category.

“With a move towards craft and premiumisation in spirits, we see this as a great opportunity for super-premium Irish whiskey and the Dead Rabbit Irish whiskey, which we launched in New York in February, is testament to this,” says O’Frighil.

Tullamore Dew’s Quinn expresses a note of caution, saying: “I suppose the greatest challenge is understanding that the growth drivers are: investment coupled with brand recognition – and not the building of new distilleries.

“This development of new distilleries is key to the long-term health of the category, but too many commentators focus on building production facilities as if this is what is building the category. This is far from the truth. Growth in consumer demand is what’s building the category.

“For smaller brands to make these new distilleries viable there is more investment required in sales and marketing drives and too often it seems this is being lost,” he says.

In a series of articles in Irish publication Food for Thought, disquiet has been expressed about the dominance of Irish Distillers’ in still making most of the Irish whiskey produced and the lack of a wholesale market for whiskey in the same way that scotch whisky producers traditionally buy and sell each other’s whiskies.

LIMITED ACCESS TO STOCKS

The Wild Geese brand has been quoted as one that has been built without a distillery but is now struggling to get liquid. There had been a dispute and litigation between Pernod and brand owner André Levy over the brand names Wild Geese and Wild Turkey, which is no longer owned by Pernod.

Levy is quoted as saying: “The reality facing the Irish whiskey market is that all of the major distilleries on the island of Ireland are owned by multinationals. This dominance limits access to stocks of mature Irish whiskey which is needed by developing brands to survive and grow. While new distilleries are planned, they are either too small or will not have stocks of mature whiskey for sale for a number of years, by which time many viable whiskey brands will be hampered or may even cease to exist.”

Asked to respond, Irish Distillers issued this statement: “Mr. Levy’s complaints about supply of whiskey have already been adjudicated upon twice over the last decade by the European Commission and in both instances were ruled in our favour.

“Mr Levy’s assertion that an intellectual property dispute between Protégé International’s ‘Wild Geese’ and ‘Wild Turkey’, which belongs to one of our competitors since 2009 has no relevance to supply agreement discussions. Irish Distillers is an affiliate of Pernod Ricard, which has more than 50 affiliate companies globally.

“In the normal course of business, affiliates regularly seek to protect the intellectual property rights across the portfolio of the group’s brands. At various stages, Irish Distillers has in good faith proposed to Protégé International supply options that it has refused.

“Mr Levy’s assertion that there is not a functioning wholesale whiskey market in Ireland is simply untrue. This is clearly evidenced by the number of new whiskeys that have entered the sector in recent years and the new whiskeys we know will follow in the years ahead as the category expands.

“In 2012 there were less than five distilleries operating on the island of Ireland. Ireland now has 16 operational distilleries with another 15+ in various stages of planning. Irish Distillers always welcomes the emergence of new players in the Irish whiskey category.

“A strong Irish whiskey category is a welcome and positive development for the overall industry as it will lead to more choice for consumers and help to grow the category. There are dozens of new Irish whiskey brands on shelves.

“To help new entrants, Irish Distillers was one of the founding members of the Irish Whiskey Association in 2014 which was set up to protect and promote Irish whiskey globally as well as develop targeted supports for new entrants.

“Irish Distillers also actively mentors new Irish whiskey companies, inviting them to Midleton Distillery and providing advice for them on technical issues. At the heart of everything that Irish Distillers does is a desire to see Irish whiskey grow on the global stage,” states Pernod Ricard

It goes on to brands that have been launched thanks to the wholesale market in recent years:

• Hyde
• Connacht
• Writers Tears (Walsh)
• The Irishman (Walsh whiskey)
• Slane Castle
• Glendalough
• Quiet Man (Niche Drinks)
• Prizefighter (West Cork Distillers)
• West Cork (West Cork Distillers)
• Clonakilty
• JJ Corry (Chapel Gate)
• Tipperary Boutique

IN SUMMARY

As to what’s ahead, Quinn says: “In the past few years we launched Tullamore Dew Cider Cask, Tullamore Dew 15 Year Old Trilogy, Tullamore Dew 14 Year Old Single Malt, Tullamore Dew 18 Year Old Single Malt and now Tullamore DEW XO Rum Finish. That’s a lot to be going on with but in truth we have some really interesting new projects in the works – sadly only a few of us are allowed to know about them at this stage.”

Walsh says: “We will be unveiling our 2018 edition of Writers Tears Cask Strength at Prowein. Also this year we will see some new finishes arising from our cask finishing programme to go with the Marsala wine cask finishes we introduced last year.

“In the first week of January in Royal Oak we distilled the world’s first ever certified organic single pot still Irish whiskey for our Writers Tears portfolio. However, it will be at least five years before we release it.

Buckley says: “An ongoing challenge for Irish Distillers is ensuring that we are constantly investing in our capacity to keep pace with the growth of our whiskeys. That’s why we have invested more than €220m in Midleton Distillery since 2012 and last summer we installed three new copper pot stills in the Garden Stillhouse, which has increased single pot still capacity by 30%.

“Thirty years ago, having studied the market and predicting a rise in demand for Irish whiskey in the future, we started to lay down significant single pot still stocks, allowing us to craft the exciting new Irish whiskey expressions appearing today, such as Redbreast, The Spot Range and Method and Madness as well as the Jameson Family.

“This approach continues: we are laying down stock that will be used decades from now as we instigate even faster growth of the Irish whiskey market in the future. This will allow us to offer consumers further opportunities to trade up with new, innovative styles of Irish whiskey.”

“Our commitment to developing exciting new concepts that ignite the creativity of bartenders and industry leaders will see the launch of Jameson Wild Seaweed Bitters, which is an innovative cocktail ingredient crafted using wild dillisk seaweed, created to inspire elite bartenders to experiment with Jameson in new and exciting ways,” says Buckley.