Distillers in high spirits as the whiskey sector enters golden era
After two decades of steady growth, the big players agree that whiskey has turned the long corner
Irish whiskey’s renaissance has matured to the point where multinationals and domestic players have committed to spending almost €400 million on building new distilleries or expanding existing ones. So what is driving overseas consumers to our national drink, and is it just a fad?
After years of waiting in the wings, Irish whiskey appears to be centre stage with consumers, who bought a total of 6.5 million cases – almost 60 million litres – last year, up from about four million in 2008. Most in the industry calculate its expansion at about 20 per cent a year.
The overall category, he explains, has been growing steadily, and mainly quietly, for more than two decades. The International Wine and Spirits Report, whose statistics are regarded as the most reliable, has ranked it as the fastest-growing spirit in the world every year for the last 23.
That growth began off a low base. At its nadir in the 1970s, Irish whiskey would have been lucky to make half a million cases – and most of what was exported went into Irish coffees, an American invention that helped it through some dark days.
The consolidation of the industry’s remaining players into Irish Distillers in the middle of that decade and its subsequent takeover by Pernod Ricard in 1988, helped halt the decline and begin the long process of turnaround.
A number of factors set the drink back on the road to recovery. John Quinn, brand ambassador for Tullamore Dew, now owned by Scottish group, William Grant, says the fall of the Iron Curtain in 1989 opened new markets populated with young consumers looking for something different to the vodkas and scotches that their parents drank. At the same time, Pernod Ricard put its marketing muscle behind the category, and selected Jameson as the flagship brand, giving it momentum in the US, from where much of the growth of the last 23 years has come.
Demand has now reached the point where the industry’s players all seem to be drawing up plans for new capacity. Irish Distillers has just spent €200 million expanding its facilities in Cork. According to its production director, Peter Morehead, €100 million went on doubling the capacity of Midleton to 64 million litres. It spent the other €100 million on a new warehouse and maturing facility at Dungourney, the nearby east Cork town that takes its name from the river from which the distillery draws its water.
William Grant, meanwhile, is returning production of Tullamore Dew to the Co Offaly town that bears its name. Quinn says it is investing €35 million in a new distillery there, which will begin production in late 2014, 60 years after the original plant closed its doors in 1954. Irish Distillers produces Tullamore Dew under contract for the Scottish group, but demand is growing such that the group has decided it needs its own dedicated distillery.
Among distilleries of more recent provenance, Walsh Whiskey has joined forces with Italian player, Illva Saronno, maker of Tia Maria and Disaronno, to build a new €25 million plant at Royal Oak in Co Carlow, where it intends to add to its existing brands, the Irishman and Writer’s Tears.