Giant steps: Irish whiskey

The world has suddenly woken up to Irish whiskey – but how is the sector going to meet the phenomenal demand? Gavin D Smith reports


IT WOULD BE SOMETHING OF AN UNDERSTATEMENT TO SAY THAT THE IRISH WHISKEY INDUSTRY HAS HAD ITS UPS AND DOWNS. When the great distillery-bagger and journalist Alfred Barnard toured Britain visiting every whisky distillery in existence during the mid-1880s, he looked over 129 in Scotland and 28 in Ireland.

Yet a century later Scotland still boasted 81, with 96 being in production by 1991, while Ireland’s tally had dwindled to just two. A complex interplay of economic, political and cultural factors led to the decimation of Irish distilling, and when John Teeling established his independent Cooley distillery in 1987 and broke the duopoly of Bushmills in Antrim, Northern Ireland, and Midleton distillery in the Republic’s County Cork it was considered momentous news.

With that in mind, consider the current situation, when seven Irish distilleries are active, from Dingle in the south west to Bushmills in the north east, while projections from the Irish Whiskey Association suggest that exports of Irish whiskey are set to double by 2020 and double again by 2030. 

Given such potential thirst, it is not surprising that IWA reports 15 new distilleries currently in development across Ireland, and it is estimated that more than €1bn will be invested in the Irish whiskey industry during the next 10 years.

The IWA was formed in April of last year and produced statistics showing Irish whiskey exports have grown by 220% since 2003 and are now valued at €350m. Last year, 6.2m 9-litre cases of Irish whiskey were exported.

In 2003, Irish whiskey made up just over 9% of beverage exports from Ireland, while that figure has now grown to more than 28% of total beverage exports. Turnover for the industry is almost €400m, with an annual direct domestic spend of €237m, and Irish whiskey sells in 77 countries, with the US, France, Germany, Russia and the UK accounting for almost 75% of total sales.

Notwithstanding all the ongoing distillery projects and new names and entrants to the Irish whiskey scene, the best-selling Irish whiskey globally carries one of the most historic names of the genre, namely John Jameson & Son. 

Owned by Pernod Ricard subsidiary Irish Distillers’ Jameson has recorded remarkable global growth during the past few years, with sales increasing from 3.17m 9-litre cases in 2010 to 4.7m cases last year, and the US accounts for some 40% of recent exports.

Irish Distillers has also invested significantly in the category of Irish single pot still whiskeys, intended to compete with single malt scotch and other premium spirits. In 2013 a new pot stillhouse was opened at Midleton as part of a €100m expansion project, and the range of single pot still whiskeys offered under the Redbreast, Powers, Spots (Yellow and Green) and Midleton labels has increased significantly. 

So far this year there have been two new releases – Redbreast Mano a Lámh, the first expression in the range to be matured solely in ex-oloroso sherry butts, and Midleton Dair Ghaelach, the only Irish whiskey to be finished in virgin Irish oak hogsheads.

The second best-selling Irish whiskey after Jameson is Tullamore Dew, acquired by Scottish-based William Grant & Sons during 2010. The purchase looks to be a shrewd one, as global sales of Tullamore Dew have doubled to more than 850,000 nine-litre cases since 2005.

Grant’s commitment to the brand has been underlined by its construction of a new distillery at Clonminch, Tullamore, with the initial pot still phase having opened in autumn 2014. It has an annual capacity of 1.8m litres, and ambitious plans are in place to expand the distillery significantly, doubling pot still output in 2019 and adding a grain plant in 2021. The total investment will be in the region of €35 million.

As with Jameson, the US is Tullamore’s happiest hunting ground, though the 12-year-old Special Reserve expression is currently being promoted in the UK, and to celebrate the opening of the new Tullamore distillery a 55% abv travel retail exclusive bottling, finished in ex-oloroso sherry casks, has been released under the Tullamore Dew Phoenix banner.

One of the most significant changes in the established Irish distilling world during recent years has been the acquisition of the formerly independent Cooley in 2011 by Beam Suntory for $16bn.

The business consists of Cooley pot still and grain distillery in County Louth, and the historic Kilbeggan distillery in Westmeath. The latter is a popular visitor attraction, where a small-scale, consciously old-fashioned distilling operation was reinstated during 2007.

Reflecting on four years of Beam Suntory ownership, John Cashman, Irish whiskey global brand ambassador, points out: “There has been a change of focus under Beam Suntory. Third-party bottling was previously an important part of the business, generating cash flow. But now we need the liquid for projected sales growth, so that aspect has been scaled back.

“We’ve also decided to concentrate on four key brands/styles – single malt (Tyrconnell), peated malt (Connemara), single grain (Kilbeggan) and blended whiskey (Kilbeggan). Our key focus now is on Kilbeggan, it’s our big global brand. We’ve dropped the Cooley name and trade as the Kilbeggan Distilling Company. Kilbeggan blended Irish whiskey is our big one. We’ve created a family of Kilbeggan whiskeys, with the single grain formerly known as Greenore having recently been re-branded as Kilbeggan eight-year-old.” 

Kilbeggan Distilling Company’s latest releases are a Kilbeggan 21-year-old blend and a 22-year-old Connemara. The limited-edition Kilbeggan expression uses whiskeys matured in a combination of casks including ex-bourbon, port, sherry and madeira, while the Connemara comprises some of the oldest stocks held at Cooley distillery, matured entirely in first-fill ex-bourbon barrels.

Change of owenership

It is not just Cooley/Kilbeggan that has seen a change of ownership, as the Diageo-owned historic Bushmills distillery in County Antrim was acquired by tequila company Jose Cuervo last November, as Diageo exited the Irish whiskey industry, having owned Bushmills since 2005. The 250-year-old Mexican distiller agreed to buy Bushmills for $408m and full ownership of the Don Julio tequila brand.

At the time of the acquisition Juan Domingo Beckmann, chief executive of Jose Cuervo, said: “We are proud to announce our agreement to acquire 100% of Bushmills. This is the most important purchase made by Cuervo in its entire history.

“This is a very exciting time for both Bushmills Irish whiskey and Jose Cuervo. We see this acquisition as a fantastic opportunity to continue to nurture and grow the Bushmills Irish whiskey brand globally, underpinned by the strong expertise and focus of Jose Cuervo as one of the world’s leading drinks corporations.”

The Teeling family may have sold Cooley, but Jack and brother Stephen Teeling, sons of Cooley founder John, have developed their own range of Teeling Whiskey Company products, and have recently commissioned Ireland’s latest distillery.

The Teelings are now offering a small-batch blended Irish whiskey with a rum-cask maturation component, a single grain, aged in Californian red wine barrels and, since last October, a single malt matured in five types of wine cask.

Their €10 million distillery and visitor centre in Dublin’s Liberties district is the first new distillery in the Irish capital in 125 years. It is equipped with three copper pot stills and the first spirit flowed on March 30 this year. It has an annual capacity of 500,000 litres. 

According to Jack Teeling: “We are proud to be at the forefront of an emerging craft distilling movement and will continue to introduce high-quality unique expressions of Irish whiskey to lead the expansion of the market in terms of depth and flavours.”

US-based Alltech is also planning to develop a distillery in the Liberties, once at the heart of Dublin’s brewing and distilling industry, utilising the St James’s Street Church, situated opposite Ireland’s number one tourist attraction, The Guinness Hop Store. 

Alltech already owns two Kentucky-built Vendome copper stills, which were installed in the Carlow Brewing Company’s premises in 2012, and it is expected they will be transferred to the new Dublin plant in due course.

The Teelings are not the only independent bottlers going down the distillery-building route, and with supplies of ‘third-party’ spirit from Cooley no longer being available, the impetus to develop alternative whiskey sources has grown.

Shane Braniff launched his Feckin Irish Whiskey brand back in 2005, and by the time of Cooley’s acquisition by Beam Suntory he had already started building his own pot still distillery on the Airds peninsula of County Down. 

Braniff says: “My decision to establish the new distillery, only the second in Northern Ireland, was influenced by the growth in demand for Irish whiskey in the US over the past few years. Irish whiskey is now the fastest growing brown spirit worldwide and demand is currently out stripping supply in the US and many other markets.” 

Last year, the company relaunched Dunville VR Irish Whiskey, one of Ireland’s best-known brands before the closure of Dunville’s distillery in Belfast more than 80 years ago. 

Another independent bottler heading down the distilling route is Bernard Walsh, whose Writer’s Tears and The Irishman whiskeys are now available in some 30 countries. 

Walsh and associates are investing €25m in the Walsh Whiskey Distillery in County Carlow, with construction having started last September. Once completed the pot and column still operation will have the potential to turn out 2m litres of spirit per annum. The venture is due to be completed early next year.

Bernard Walsh is also chairman of the Irish Whiskey Association, and he says: “Irish whiskey growth is currently focused on the developed markets of North America, Europe, Russia, Australia and South Africa. There is a whole new market opening up in Asia and South America which the Irish can seriously tackle once stocks become available following the expansion programme. 

“Irish whiskey is just entering a new golden era. We recognise we are but a drop in the ocean when compared to our near neighbours and friends in Scotland. The renaissance of Irish whiskey has a long way to run, there may be some growing pains along the way, but we see a very exciting future ahead.”