Tuesday 21 May 2019

A re-invigorated Irish whiskey industry is distilling a new golden age

whiskey
whiskey
Richard Curran

Richard Curran

Richard Curran

If you have never taken a tour of the old Kilbeggan Distillery, just off the Dublin to Galway road, then you really should. It isn't just a wonderful journey back in time; it also gives a fascinating glimpse into the golden age of Irish whiskey.

Between about 1850 and 1915, Irish whiskey was king of the world. Its subsequent demise has been well recorded but, suffice to say, a few things went against us.

However, a new golden age of Irish whiskey may be about to take place. It is already happening and, if it continues, it will be the most remarkable comeback story in Irish business history.

Our economic future is pegged to enterprise and exports, not speculation and consumption. We are heavily focussed on 21st Century emerging industries, from gaming to wind energy. But right under our noses is the re-invention and re-invigoration of one of our oldest industries. Could it be a model for others?

Right now, there are about 16 Irish whiskey companies in various stages of production, sales, planning and development. Alongside that wave of relatively new whiskey entrepreneurs sit some of the biggest players in world spirits.

The number one is Jameson, owned by Irish Distillers, which, in turn, is owned by Pernod Ricard, the second-biggest spirits company in the world. Jameson is selling around 3.5 million cases per year. Second is Tullamore Dew, with about 800,000 cases, which is owned by William Grant, the makers of Glenfiddich, the biggest-selling single malt whisky in the world.

Third is Bushmills, with around 700,000 cases. It is owned by Diageo, the biggest spirits company in the world. Fourth is the former Cooley Distilleries that is now owned by Beam group, the second biggest spirits company in the United States and number four in the world.

These are heavy hitters who have invested massively in the growth story that is Irish whiskey. Sales of Irish whiskey around the world have doubled in the last 10 years and have grown by nearly 50pc since 2008.

Right now, Irish whiskey sales are growing at around 10pc per year, a lot faster than vodka (4.3pc), American bourbon (2pc) and Scotch (1.5pc).

Before we pat ourselves on the back too much, Irish whiskey sales are now around 6.5 million cases per year. Scotch is around 90 million. Even Canadian whiskey (no offence Canada) has more than three times our sales.

But the momentum is behind Irish whiskey. The industry has been transformed from a monopoly into a vibrant competitive sector that is blazing a trail in big markets like the US, Australia and Russia.

Two things have driven this remarkable turnaround. Jameson, owned by Irish Distillers, has been a phenomenal success. But once Cooley Distillery got going in the early 1990s and decided to produce multiple whiskey products under the Irish whiskey name, it helped to grow the category.

The State allowed the monopoly to go on for too long. Just 20 years after the monopoly ended, we have a vibrant growing industry.

The really big players are behind the sector. These are the same multinationals that dominate the industry in Scotland.

According to Willie McCarter, co-founder of Cooley Distillery and outgoing chairman of the Irish Spirits Association, there is a massive opportunity out there and the Government is only just beginning to realise it now.

"This is the second golden age for Irish whiskey," he said. "India and China are huge potential markets that have yet to open up. The jobs that can be created through Irish whiskey are stable and cannot just be moved somewhere else overnight as with other industries. It also creates jobs in different parts of the country," he said.

You only have to look at the success of Scotch to get a glimpse of the potential. The Scottish whisky industry employs 10,000 people directly and about another 35,000 in support jobs. Exports generated £4.3bn for the UK last year and Scotch whisky accounts for a quarter of UK food and drink exports.

Irish whiskey is growing its market share around the world, and there is a real chance to develop an industry that truly fits the bill of what the economy is seeking. It involves adding value, is export-led, creates global brands, is about manufacturing, has opportunities for indigenous and foreign multinationals, and it spreads jobs to all kinds of places.

In Ireland, we now have Dingle Distillery supplying the Porterhouse chain. Bernard Walsh's Irishman brand is building a €25m distillery in Carlow, backed by Italian company Saronno, makers of Tia Maria. Alex Mountcharles is developing a distillery in Slane. John Teeling is getting back into the sector with a distillery in Dundalk, while his son Jack is focussing on Dublin.

According to McCarter, international tastes in drinks like whiskey tend to stick around for 20 years. In other words, when you are on the up, the trajectory can continue for a long time. Sadly, the same is true when a category is on the way down, as happened in Ireland for decades.

The chief executive of the Scotch Whisky Association is predicting that Scotch sales will double in value by 2025. Imagine if Irish whiskey got just 15pc of that increase. It would translate into 13.5 million more cases, or more than twice what we currently sell.

Irish whiskey is close to tying down a G.I. (geographic indication) with the EU, which would ensure that only whiskey distilled in Ireland can be sold under the name of Irish whiskey. It's a bit like trying to use the Champagne name for sparkling wine not produced in that region.

The Scots already have theirs and it will be a further milestone in the Irish whiskey industry's long road back to international stature.

Irish Independent

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