Friday 20 April 2018

John McGee: Whiskey galore as firms craft their brand stories

'sales of Irish whiskey are reckoned to be the fastest growing segment in the international spirit market.' (stock image)
'sales of Irish whiskey are reckoned to be the fastest growing segment in the international spirit market.' (stock image)

John McGee

Jennifer Nickerson is the most unlikely advocate of Irish whiskey. Having grown up in Scotland, she lived in the shadow of many well-known international whisky distilleries where he father held various roles over the course of 35 years. To help her sleep when she was a baby, she says her mother used to let the whisky fumes that would waft from the nearby distillery warehouses put her to sleep. When at college in Edinburgh, even her final year MA thesis was even on the economic impact of the Scotch whisky industry.

Now, as managing director of Tipperary Boutique Distillery, in Cahir, Co Tipperary - a business which she co-founded with her husband- the family's knowledge and expertise in all matters whisky and whiskey, is being put to good use as the company ramps up its plans to develop its Irish whiskey manufacturing business, push into new international markets and win over new fans.

With several premium whiskey brands in the company's portfolio, Nickerson is typical of a new generation of ambitious, entrepreneurial and marketing-led individuals who are shaking up the once sleepy, but now rapidly growing, Irish whiskey industry.

And not before time. In 2013, there were just four distilleries operating in Ireland. Now there's a staggering 16 and by the end of 2020, it is estimated that there will be around 30 of them - more than one for every county in Ireland. To say it's a growth industry is, perhaps, an understatement.

There's a reason for this growth. Sales of Irish whiskey on international markets have grown by 300pc over the last decade. Of the €1.4bn in drinks which Ireland exported in 2016, around €505m of this was Irish whiskey which went to over 130 different countries. By comparison, exports of beer and cream liqueur amounted to €290m and €295m respectively.

Indeed, sales of Irish whiskey are reckoned to be the fastest growing segment in the international spirit market. By 2040, Ireland should be on course to export around 24m cases of the stuff a year on the back of an estimated €1bn investment which will raise production by 41pc.

Such is the growth in popularity of Irish whiskey that it has now spawned a parallel industry in whiskey tourism with many distilleries setting up on-site visitor centres. Whiskey tourism, according to the Irish Whiskey Association, has the potential to attract 1.9m visitors to Ireland by 2020 with an estimated spend in the order of €1.9bn.

While the global market is dominated by Irish Distillers Pernod Ricard which owns popular brands like Jameson and Middleton; William Grant which owns Tullamore Dew and the Mexican company Jose Cuervo, which owns Bushmills, the smaller independent distillers have been benefiting from the marketing clout these big companies have at their disposal.

"In fairness to them, they have played a big role in growing the overall market for Irish whiskey around the world and this has benefited everyone," notes Jennifer Nickerson.

Independent distilleries, however, would be foolish to rely entirely on their competitors unwitting munificence to grow their business and, like most companies, they have to develop their own marketing strategies. Typically, these revolve around compelling brand stories, slick bottling and labelling, strong consumer insights while at the same time hitching their wagon to trusted importers and distributors in their key target markets.

The reality is that most independent distilleries starting out don't actually have their own product to sell. Whiskey takes time to age and mature, particularly if you are aiming at the premium end of the market which is where most Irish distilleries see their future.

If you've ever bought a 10-year old single malt from a company that has only been up and running two or three years, then it doesn't take a degree in applied mathematics to work out that what you are about to savour was most likely bought on the wholesale market and made by some other manufacturer.

But this is where it gets interesting and how good marketing in all its glory kicks in.

While the product's quality is obviously paramount, most independent Irish distillers have been very clever with the brand stories they have to share, irrespective of whether they've been around four months or four years.

Increasingly, whiskey aficionados want to hear all about the brand's heritage (if it has one), its provenance, the family behind the brand, where the barley or the water comes from or the kind of casks it has matured in. If this fits in with their own personal aspirations and lifestyle choices, then bingo.

In many ways, it's a triumph of marketing over substance - especially those brands that are just starting out. And if these independent distilleries can sustain that brand interest and capture the imagination of their customers until they are fully up and running and manufacturing their own products and brands then a very bright future for the Irish whiskey industry lies ahead.and we should all raise a toast to that.

Sunday Indo Business

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