Spirit of growth
A growing interest in premium international spirits is creating the right environment for Irish spirits. Dale Breheny outlines how Bord Bia (the Irish Food Board) is exploring this opportunity
There has never been a better opportunity for Irish spirits, particularly whiskey, in China. Although western spirits is quite a niche category in China, the market has evolved and there is huge potential for Irish spirits. In recent years, the Chinese western-spirits consumer has become more sophisticated as modern bar culture has reached China, and there is a growing interest in premium and niche spirits from different countries such as Japan, the US and now Ireland.
At the beginning of the century, brandy was the only widely accepted international spirit in China and it still dominates today. The whiskey market has been built by investment from the multinationals. Single malts are now out-performing blends, signifying a trend towards premiumisation, which creates an opportunity for the niche or premium Irish whiskey category. We also see white western spirits such as gin and vodka becoming more popular, but it is a smaller market.
Irish alcohol exports to China reached €8.1m in 2020, driven by fast growth in spirits, particularly whiskey, since 2018. Irish whiskey is the fastest-growing whiskey category by consumption in China (IWSR, 2020). Despite the challenges of last year, including the temporary closure of on-trade and reduced consumer confidence in imported goods, exports still grew by over €1m year-on-year.
In the five-year period between 2016-2020, whiskey exports grew 449% to €3.7m; liqueurs more than doubled to €3.3m, and the gin category grew by a staggering 702% to almost €200,000. In 2019, there was a significant increase in consumption as more whiskey brands entered the market. Established brands also enjoyed a surge in growth.
Taiwan is an established market for single malts and has some of the most sophisticated whiskey consumers in the world. The Irish whiskey export value in 2020 was €1m and the country is a steadily growing market for Irish whiskey.
Western spirits are well understood in Hong Kong and it has a strong cocktail bar culture which is slightly ahead of mainland China. The Irish whiskey export value has grown over 400% in the last five years to almost €200,000. Hong Kong has suffered from economic instability in recent times, but we expect it to follow a similar upward trend as the region recovers.
In 2019, Bord Bia noticed the growth of Irish spirits in China, both from an increasing number of new entrants on the supply side and a growing pull and interest on the buyer side. Developing a greater understanding of the market was key and we undertook a six-month ‘feet on the street’ project, enlisting the help of an industry expert to gather insights, leads and market understanding for our Irish spirits strategy.
We identified Guangdong province as a key market of interest. For channels, we decided to target on-trade, in order to build our reputation as a category. Our end consumers fall into two categories: the young professional who is new to drinking and open to trying new things, for our entry level spirits; and, for our more premium products, the whiskey expert who is looking to add something unique to their collection.
In 2020, we focused our attention on established brands in the market in order to raise the profile of the category and awareness for these brands before accelerating the number of brands entering the market in 2021.
Our objectives are to establish Irish whiskey as a category of its own in China; support existing brands and their customers; and assist new Irish suppliers with a route to market. We aim to achieve this by educating the trade – bartenders, distributors and all types of buyers – on the history and unique selling points of Irish spirits, particularly whiskey. This will create a pull for Irish spirits among the influential bars who are the key decision makers among consumers. We will employ an integrated approach with offline activities and online communications for maximum impact and reach.
Our key message is Ireland is the origin of whiskey. We want buyers to know that Irish spirits are unique and exclusive with a long heritage and history, and that the category is diverse, varied and innovative. We want to share the message that Irish whiskey is smoother, and that Ireland’s unique geographical location and climate lends itself to creating a superior whiskey.
Digital plays a key role in our integrated communications and we use our owned channels and media features to reach a wider trade audience. Wechat is our destination for trade leads, and we have a permanent alcohol section where we share educational articles, news and events. We use Weibo to target consumers using cocktail recipes and event photos. We also work with targeted, niche media, followed by trade and whiskey enthusiasts, to extend our reach in an engaged audience.
Our first event in December 2020 was a trade media launch for Irish whiskey in Shanghai showcasing a diverse range of premium Irish whiskey available in the market in cocktails and food pairings. It aimed to raise the profile of the category and existing brands in the market. The event had over six million impressions and generated leads for the ten Irish suppliers from the 30 members of local trade who attended.
In June, we will host a Meet the Maker event where we will have virtual one-on-one meetings between interested Chinese buyers and Irish suppliers. This event will serve as a follow-up with leads generated at the Shantou whiskey fair in April. We will have a Bord Bia information stand at this show to generate leads in our key region of Guangdong for new entrants to the market. Bord Bia will have a stand at WhiskyL! Shanghai which takes place in August and is the largest show in China. It has an international focus and is important for reputation building in the industry and networking opportunities.
We have found it effective to promote Irish spirits as part of a food pairing to the young professional who is choosing western spirits as part of their image or to make a statement, and one that has worked well is whiskey and oysters. It shows the consumer and the buyer how to enjoy Irish spirits. These promotions have also helped to strengthen relationships with the bars and restaurants we partner with.
In 2021, we are planning whiskey masterclasses in Guangzhou and Shenzhen to educate influential groups of bartenders on the Irish whiskey story and bring their attention to the variety in the category and suitability for premium mixology. It’s an exciting time for the Irish spirits category in China and Bord Bia is delighted to play its part.