Whiskey galore as Teeling brothers plan to take on the big international distillers
Stephen Teeling tells John McGee about how Teeling Whiskey is planning for growth rates of 20pc over the coming years
Published 19/06/2016 | 02:30
One of the great Irish business success stories in recent years has been the phenomenal growth in the number of craft brewers and independent distillers that have sprung up in the shadows of the international giants.
While the likes of Diageo, Heineken and Irish Distillers Pernod Ricard still command the lion's share of the international markets, the parvenu players are quietly nibbling away at their market share as fickle and promiscuous consumers continue to seek out alternative tastes, products and experiences.
One of the biggest growth markets globally lies in Irish whiskey, an opportunity too good to be passed on by brothers Jack and Stephen Teeling, the entrepreneurial sons of the legendary John Teeling, the founder of Cooley Distillery.
Set up in 1989 with funding from a business expansion scheme, Cooley was sold in 2011 to US firm Beam Inc (now Beam Suntory) for €71m.
Now running Teeling Whiskey - with Jack as its managing director and Stephen as sales and marketing director, the two brothers share many of their dad's entrepreneurial qualities.
Teeling Whiskey was initially set up in 2012 by Jack Teeling, and he was joined by Stephen in 2015 after he left his role as international marketing manager for Irish whiskey at Beam Inc. Since 2012, the company has grown in size and now employs 55 staff, exports to 44 different countries and its most recent turnover figures show that it had clocked up revenues of €7m in 2014.
Apart from manufacturing four different whiskeys (as well as a poitin brand), the company also runs a popular visitor centre at its headquarters on Newmarket Square in the heart of Dublin's Liberties. Offering the obligatory tour of a living, breathing urban distillery, over 60,000 visitors - mainly tourists - have visited it since it threw open its doors last year.
Once upon a time there were 32 different distilleries operating on the island of Ireland, and Irish whiskey accounted for around 60pc of global whiskey sales. After a period of decline of around 60 years - largely as a result of little investment and greater innovation by competitors in Scotland and the USA - Irish whiskey sales plummeted to around 1pc of the global market.
It was not until Irish Distillers was acquired by Pernod Ricard in 1988, and the subsequent foundation of Cooley a year later, that Irish whiskey started to flex its marketing muscles on the international stage and, slowly, its global market share started to rise again.
"Over the last 10 to 15 years, Irish whiskey has been the fastest growing spirit in the world and over the last five to seven years, Irish whiskey has been the fastest spirits category in the world," says Stephen Teeling, adding that average annual growth rates of around 20pc can be expected over the coming years.
"The growth is predominately being led by the US - but what's interesting is that it's a younger generation that is driving it, whereas Scotch is perceived as a drink for those over 50. It's people between 25 to 35 - both male and female - who like the taste. The profile also shows that it's more of a bar drink than one that is consumed at home."
He also points out that the company has deliberately steered away from traditional whiskey labelling and bottling in favour of a more urban and modern positioning that clearly differentiates it from the rest of the pack.
The fact that all the big Irish whiskey brands benefit significantly from considerable marketing investment by their parent companies has helped drive the overall market. While this has helped in some way, Teeling is hoping to drive greater segmentation within this market as a discovery brand, rather than a challenger brand.
"If people like Irish whiskey, then we want to offer them a ladder of product that challenges their perceptions of what Irish whiskey is. We do that by being a little bit more flavoursome, by doing things at a slightly higher strength and by generally trying to excite them.
"We have also found that a lot of people who drink brown spirits are not so brand loyal - they are open to new tastes and experiences. They have a repertoire of things they like. So we felt that there was an opportunity to drive the segmentation in the market with more premium whiskey.
"As smaller company, we were never going to be able to compete head-on with the big guys in terms of marketing. They have done a lot of recruitment for Irish whiskey in their segment of the market, and they do it very well. But there is plenty of room, plenty of opportunities for companies like ours," he says.
As the US market represents the biggest opportunity for the company, Teeling says that it has a number of key sales staff strategically placed throughout the market.
"We are still a small company but we have been able to place five people around the US in key markets, including two in California, another in New York and Boston. We have another going into Chicago as well.
"The great thing is that it's being received very well in all our markets. People like the brand and what we are trying to do. Irish whiskey hasn't been done this way before, so it makes for an interesting story," says Teeling.
Sunday Indo Business