Raise a glass
The spirit of the Irish is in demand
Article appeared in issue 2, 2020
Irish alcohol exports increased by eight per cent to €1.45 billion in 2019 and Irish whiskey continues to be the star of the sector’s international success, with the value of exports listed at €727 million – an increase of 370 per cent in value since 2010.
Strategic positioning in the premium and super-premium segments in the US has yielded success for Irish whiskey, capitalising on the trend towards drinking less but better. In 2019, the Australian whiskey market was worth €1.4 billion with Irish whiskey accounting for €74 million of that. The annual growth rate of the market was 10.7 per cent and has showed no signs of slowing. Currently, Jameson is enjoying the majority of these sales, but with consumers actively seeking out premium whiskies, there is opportunity for other authentic Irish offerings with strong heritage and unique stories. In China, Irish brands have a very small share of the spirits market – 0.6 per cent of the whiskey market in 2018 – but it is set to be among the fastest growing in coming years. From 2017-2018, the Irish whiskey category grew at a CAGR of 47.8 per cent. Irish Distiller’s Pernod Ricard is the leading brand owner thanks to the Jameson brand: its sales soared by 76 per cent in the country last year. Other spirits brand owners are holding their own in the region too, with Pearse Lyons Distillery, Glendalough Distillery, West Cork’s Distillers, Bushmills, Teelings and Tullamore Dew all listing Irish whiskies.
Next for 2020
Bord Bia (the Irish Food Board) is launching the Irish Spirits Communications Programme in the US in May 2020, sharing the story of Irish whiskey across 17 control states. This education programme for all front-line staff working in off licences is designed to boost sales in the US by outlining Irish whiskey’s unique attributes and its premium position. Success here may see the programme rolled out to Canada, the single biggest customer of Irish spirits in the world.
Going for growth
With a very successful year under its belt, Conor McQuaid, Chairman and CEO of Irish Distillers, discusses the ongoing opportunities for the company
December 2019 was Jameson’s single largest sales month in history, what is driving this growth?
There is no doubt that the renaissance of the Irish whiskey category has been spearheaded by the incredible growth of Jameson, which achieved 30 consecutive years of growth in 2019, reaching sales of eight million cases in the year to the end of December. Jameson is one of Ireland’s most recognised brands worldwide, and its success has created a rising tide for all Irish whiskey brands, acting as an introduction to the category for many consumers.
Ongoing innovation in the industry, coupled with an increased focus on the versatility of Irish whiskey in mixed drinks and cocktails, is opening the door to new consumers. Our continued dedication to innovation has allowed us to penetrate new markets and grow Irish whiskey sales across our portfolio.
How has a focus on premiumisation in international markets helped to grow the portfolio?
We hear from both on-and off-trade that the consumer is drinking less but drinking better quality products. This is reflected in the global growth of our prestige range led by Redbreast, the Spot range and Midleton Very Rare. We very much expect to see premiumisation continue to drive the category in 2020, reflecting the increase in consumer appetite, particularly among millennials, for premium and super-premium Irish whiskeys. We are delighted with the success of Jameson Black Barrel which has experienced 26 per cent growth globally in the first half of 2019/2020, with Russia (293%), the UK (79%), South Africa (+28%), and Ireland (+15%) all performing well. In 2018/2019, it became the first super premium Irish whiskey brand to reach 100 thousand cases in the USA.
Sales in Nigeria are up 185 per cent, China saw growth of 76 per cent, and India of 47 per cent.
Are you pleased with how the emerging markets are developing?
We are delighted with our performance in emerging markets, particularly the Asian and African markets. The rise of the middle-classes in India has led to increased demand for authentic, imported brands. China represents an opportunity for Jameson and our prestige Irish whiskey ranges, with the category recording 50 per cent growth in the Chinese market in 2018. The EU-Japan trade agreement, which was signed in July 2018, means the geographical indication of Irish whiskey will now be protected in Japan.
We are focused on building the brand globally in markets not traditionally associated with Irish whiskey. For example, building on the success of the Jameson brand in South Africa, we are very positive about the opportunity across the African continent as a whole and recent success in markets like Nigeria is encouraging. In Russia and neighbouring countries, the rise in millennials choosing dark spirits over white also represents a key opportunity for Jameson now and in the future.
The tariff on Irish whiskey in Vietnam has been abolished, what opportunities does this offer Irish Distillers?
The passing of the EU Vietnam Free Trade Agreement in February presents a major opportunity for the further growth of our entire portfolio in a market that in the past two years has seen sales of Irish whiskey treble. The deal also introduces protection for Irish whiskey’s geographic indication in Vietnam for the first time. This means that only authentic Irish whiskey, produced on the island of Ireland in line with the approved technical file, can be sold bearing the name 'Irish whiskey'. This legal recognition in emerging markets is vital to protecting the high standards that are the hallmark of the category.