Irish whiskey makers see chance to catch up with tweedy Scotch cousins

When Jameson, the world’s top-selling and fastest-growing Irish whiskey published its most recent first-half results, it had plenty to drink to.

After a record 2021-22, overall sales were up another 11 per cent. And the figure for the US — which accounts for 40 per cent of its market — rose 8 per cent.

For the newer producers following in its wake, cracking the US market has long been considered “the holy grail”, said John Cashman, head of brand and new product development at five-year-old distillery, Powerscourt. “It’s like Sinatra, if you can make it there, you’ll make it anywhere.”

The reason is simple: the US is the biggest market for the “emerald spirit” and, according to new data, Irish producers have a better shot than they ever did at their ambition of overtaking Scotch whisky sales there, by volume, by 2030.

More than 6.1mn 9-litre cases of Irish whiskey were sold in the US last year, a rise of more than 1,150 per cent on 20 years ago, according to the Distilled Spirits Council of the United States.

That translated to $1.4bn in sales value. Sales in the US — where prohibition a century ago did serious damage to a drink that had dominated the market — allowed Irish whiskey to surpass €1bn in exports for the first time.

This was “an important milestone in the Irish whiskey renaissance”, said William Lavelle, director of the Irish Whiskey Association.

Irish whiskey, reputedly a favoured tipple of Elizabeth I and Russian Tsar Peter the Great, still has some way to go to close the global gap with Scotch, which reported record exports of £6.2bn in 2022.

View of the three pot still in the whiskey distillery area at Powerscourt Distillery
Powerscourt, located on a historic estate close to Dublin, is one of a new generation of distilleries that are trying to give Irish whiskey a younger, hipper image © Paulo Nunes dos Santos/FT

But “Irish grew faster than any other major whiskey type between 2016 and 2021,” said Humphrey Serjeantson from drinks market consultancy IWSR. “We would expect that growth to continue.”

A dozen years ago, there were just four distilleries across the island of Ireland, with global sales of fewer than 5mn cases.

The number of distilleries has risen tenfold and worldwide sales now exceed 14mn cases. Although Northern Ireland — home to the famous Bushmills distillery — is part of the UK, whiskey is run as a single industry across the island.

To meet forecast demand, 3.5mn casks are maturing across the island and distillers are increasingly looking to produce premium and innovative products.

“You have to be innovative and experiment all the time — it’s crucial,” said Roger Duggan, general manager of Powerscourt, which won two gold medals at last year’s Irish Whiskey Awards. Despite its relative newcomer status, when it was set up the distillery also bought older stock to be able to offer aged whiskey, a standard practice in the industry.

Jameson, the best-selling Irish whiskey in the world and part of France’s Pernod-Ricard group, dominates the market. It sold 6.4mn cases in the first half of this year, including 2.5mn in the US, after a 22 per cent increase in 2021-22 amounted to record sales of 10.4mn cases.

But Powerscourt, located in the rolling hills close to Dublin on a historic estate owned by the Slazenger family, is one of a new generation of distilleries that are trying to give Irish whiskey a younger, hipper image than its tweedier cousin across the sea. Irish whiskey’s triple distillation, its proponents claim, makes for a mellow drink that lends itself to cocktails as well as sipping.

The milder climate also gives it its own taste, experts say, and some of it is still made using the traditional “pot still” process — the copper pot was originally used to ferment raw barley to dodge an 18th century tax on malted grain imposed by Britain.

Column chart of 9-litre cases (mn) showing Irish whiskey sales have increased worldwide

Paul Corbett, Powerscourt distillery manager, said “global tastes are changing and Irish whiskey has the flexibility to adapt to these new flavours”.

A focus on expensive products has also helped Irish whiskey carve out a niche. The Distilled Spirits Council said that consumers wanted to “trade up” and that US sales of premium and super premium Irish whiskey had grown “1,050 per cent and 2,769 per cent [in volume terms] respectively” since 2003.

“The premium-and-above segment has a much higher share of total volume in Irish whiskey than it does in Scotch,” said Serjeantson.

Although Irish whiskey is a long way behind Scotch in global sales, according to IWSR data, it has the edge in the Czech Republic, Slovakia and Zambia and is growing faster than its rival almost everywhere.

“It’s easy to grow quickly from a much smaller base,” said Fionnán O’Connor, author of A Glass Apart: Irish Single Pot Still Whiskey. “But it keeps growing, which is startling.”

Irish distillers cannot yet compete with the vast stocks of aged Scotch whiskies, which can command very high prices.

“So I think the idea that Irish would overtake Scotch in value in the US by 2030 is a long shot,” said Serjeantson. “But in volume, it’s certainly do-able.”

Besides the US, Nigeria has emerged as another high-growth market, driven by an expanding middle class. Experts say recognition of established brands such as Jameson, Tullamore Dew and Bushmills help the newer distilleries win customers.

However, the war in Ukraine will probably knock out the 7 per cent of total Irish whiskey sales that went to Russia and Ukraine.

“The US and Europe are still the anchor markets,” said O’Connor. “But Ireland is looking beyond those two bastions.”

“I certainly think the best is yet to come.”

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