The whiskey rush

 

After a 20th century marked by near terminal decline, Irish whiskey is undergoing a renaissance, writes RONAN McGREEVY

THERE IS NOTHING as Irish as Irish whiskey. Whiskey was our thing since Irish monks came back from the Continent with Arabic alembic stills. The monks used the stills to distil beer wash into what became uisce beatha (the water of life), giving the world one of the few Irish language expressions that is universally known to this day.

During the 19th century, Irish whiskey was by far the pre-eminent whiskey globally and, for a decade after phylloxera devastated the Cognac crop in France, it was the most popular spirit in the world.

Nowadays, after a 20th century marked by near terminal decline, Irish whiskey is undergoing a renaissance that could be called the rise and fall and rise again of Irish whiskey.

When the Scots embraced the cheaper blended whiskeys made from malted barley and grain in the 19th century, the Irish stuck to the much more expensive, time-consuming but more flavoursome single malt and pot still whiskeys.

The Scots gained market share at the expense of the Irish. There followed a series of well-documented calamities in the 20th century, which drove Irish whiskey to the point of extinction as an export product, from the War of Independence through prohibition and the second World War.

Last year, Irish whiskey surpassed five million cases (a case equals 12 bottles). This was driven by a stellar performance in the all-important US market where sales increased by 24 per cent to 1.7 million cases, surpassing Scotch single malt for the first time.

This is a hugely impressive performance until one considers the fate of Irish whiskey’s great rival Scotch – and therein lies the tale of two whisk(e)ys.

Scotch whisky sells 90 million cases a year and the Scottish control 60 per cent of the global whiskey market (excluding India which has its own indigenous industry). Irish whiskey has, by contrast, 3.5 per cent of the world market.

The Scots have parlayed a former cottage industry into a drinks’ industry behemoth with exports valued at £3.5 billion (€4.2 billion) in 2010. The whiskey producers here say the disparity in sales is nothing to do with Scotch being a superior product.

They would say that wouldn’t they, but so too does the influential whiskey writer Jim Murray, author of The Whisky Bible.

“It is entirely indicative of the amount of spirit that the Scots have for sale,” he said. “What the Irish can produce is merely a pimple on the bum of what the Scots can produce.

“The problem has never been one of quality. The big problem has been the quantity. This is Ireland’s time. They have now got the quality and the wherewithal.

“They are never going to catch up the Scots in terms of output, but all they have to do is keep up the quality and the quality is very, very high.”

Murray says the maturation processes involved in Irish whiskey are “far ahead” of those used in Scotch. “It is very rare that you find an Irish whiskey that has been tainted by a poor cask.”

Back in 1994, when Murray wrote the Irish Whiskey Almanac, the lack of confidence in the industry was such that single pot still whiskey, the mixture of malted and unmalted barley that is uniquely Irish and world-renowned, was being phased out.

Nowadays, pot still whiskey made in Ireland’s biggest distillery in Midleton, Co Cork is winning acclaim and new markets especially among whiskey connoisseurs.

The sale before Christmas of the last independent distillery, Cooley Distillery, to the Jim Beam company for €79 million now means all Irish whiskey makers are in foreign ownership.

Jameson, the staples of the Irish market, Paddy and Powers, and pot still whiskeys including Green Spot and Redbreast are all owned by Pernod Ricard. Diageo, the owners of Guinness, bought Bushmills in 2005.

While many will lament the reality that Ireland’s entire whiskey inventory is run by multinational companies, the same companies have the reach and marketing clout to restore Irish whiskey to global pre-eminence.

The trailblazer of Irish whiskey is Jameson. It expects to surpass four million cases a year, buoyed by a 29 per cent increase in the critical US market. Across the industry it is acknowledged that Jameson is a globally recognised brand that has brought Irish whiskey to a whole new audience.

Pernod Ricard have big plans for Jameson and ultimately want it to be one of the world’s top 10 spirits by 2020, doubling sales in the process. They are investing €100 million in their Midleton facility to cope with the expected extra demand.

Irish Distillers’ global category development director Brendan Buckley said sales of Jameson were now in “lift off” following years of assiduous promotional activity abroad.

“This is a very exciting time for Irish whiskey,” he said. “We are genuinely delighted there are so many whiskey companies in the business because the more players there are, the more dynamism and energy is created and everybody benefits.”

At home, Irish whiskey is shaking off its image as an old man’s drink; in global markets its profile is overwhelmingly young, especially among those who like it with a mixer.

That much was apparent when arguably the most famous 20-something woman in the world, Lady Gaga, prefaced a song at the O2 in Dublin by saying: “I don’t know if any of you are familiar with my long-term boyfriend, Jameson.” Pink, too has cited the drink as a possible name for her first child.

Where Jameson has Lady Gaga, Tullamore Dew has the world's most famous fictitious 20-something.

Lisbeth Salander, The Girl with the Dragon Tattooin Stieg Larsson's phenomenally popular Millennium trilogy, only drinks Tullamore Dew when she drinks whiskey.

For historic reasons Tullamore Dew is a whiskey not well-known in Ireland, though its new owners, William Grant & Sons, are endeavouring to change that fact.

In 1963 when Tullamore Dew was sold to Powers, the distillery in Tullamore was closed and production was moved to Midleton where it is produced under licence to this day. The division of labour was clear. Powers would be the brand for the home market: Tullamore Dew for export.

For that reason many Irish people are surprised to know that Tullamore Dew is the second biggest selling Irish whiskey abroad, surpassing 700,000 cases last year and is gaining market share. It is the biggest-selling whiskey in Denmark, the Czech Republic and Latvia and the biggest selling Irish whiskey in Lisbeth Salander's Sweden, Germany, Poland and a host of other European countries.

Tullamore Dew's new owners, whose portfolio also include Grant's blended whiskey and the best-selling single malt Glenfiddich, know how to shift whiskey. They are refurbishing the Tullamore Dew heritage centre in Tullamore and have embarked on a €10 million worldwide marketing campaign to promote the brand.

At a time when Irishness is a debased currency at home, Tullamore Drew trades enthusiastically on its Irish identity. Made from single malt, pot still and grain whiskey, Tullamore Dew is an exceptionally smooth whiskey even by Irish standards.

The original advertising campaign, entitled "Rough Country, Smooth Whiskey" emphasised that fact, juxtaposing the drink with the wild Irish landscape in a series of television advertisement campaigns that could have done justice to Fáilte Ireland.

In its latest advertising campaign "Irish True", Tullamore Dew is focusing on the Irish character. Five men are singing songs in a pub and drinking Tullamore Dew. It's only at the end the viewer realises that the man pouring the drinks is a prison officer and the other four are handcuffed prisoners.

Tullamore Dew global brand ambassador John Quinn said the campaign is indicative of the fact that others think more of Irish people than they think of themselves nowadays.

"The Irish are regarded as warm and approachable people, as poetic rebels. Is whiskey bound up with the character of the Irish? Absolutely, I'd say."

Bushmills have taken a different tack emphasising the conviviality and artistic spirit inspired by Irish whiskey through its "Since Way Back" campaign. They have recruited the folk rock band Bon Iver. Lead singer Justin Vernon created a sense of otherworldliness about himself when he famously spent four months alone in an isolated Wisconsin log cabin crafting the band's acclaimed first album For Emma, Forever Ago.

Vernon signed up to promote Bushmills on the basis that his father was an Irish whiskey collector. "The founders of Bushmills developed a recipe that lasts. We hope to do the same with our music," he declared when the announcement was first made, a sentence that sounds much like corporate speak.

Predictably, he has been hammered for selling out, but the furore has generated a degree of exposure for Bushmills in the US market that cannot be bought.

The entry of Jim Beam into the Irish market is likely to take Cooley Distillery to another level of exposure that they could not hope to do themselves. Cooley have been the true innovators in Irish whiskey. They have gone back to the future in creating a peated malt, Connemara, and Ireland's only grain whiskey, Greenore. They are also working on relaunching a rye whiskey which used to be made in Ireland, but until now they depended on stellar reviews and word of mouth to shift product.

Cooley saw 60 per cent growth in sales last year and are anticipating another 50 per cent this year.

Cooley's founder and serial entrepreneur John Teeling's personal windfall has been reported to be €12.5 million and his sons Jack and Stephen have also benefited, but as he says nobody in the right mind would set up a distillery, and certainly not back in 1988 when Irish Distillers had a monopoly on production.

Any investor in Irish whiskey has to wait an average of seven years to sell their product, can expect to lose money for three or four years after that and any profits have to be reinvested in new stock if the investor is serious about the business.

"Twelve years without any profit," said Teeling, "most people would think that is mad." As he points out, those who invested with him in the beginning back in 1988 would have seen a 140-fold return on their investment or about 15 per cent per annum, but none were paid a dividend for the first 22 of the 23 years.

"The only beneficiaries of this are going to be kids and grandkids," he quips. "Some of us are too old to enjoy it and there are others even who are dead."

Teeling will stay in the medium-term with Jim Beam. He said the company is likely to focus on promoting Kilbeggan whiskey which is being made again in the distillery of the same name which recommenced production four years ago.

"Jim Beam want a mainstream blended Irish whiskey. Their very strong belief is that they can deliver strong growth with Kilbeggan over the coming years," he said.

Despite the inherent difficulties in entering the market, Teeling believes other independents will start up especially those looking to make single malts.

He predicts Irish whiskey sales will double in the five years and double again by 2021 and 2022 to 20 million cases making it a multi-billion euro industry though such figures would be the outer edge of what the industry is capable of producing at present.

"The reasons for investing are stronger than they ever were. The opportunities are huge," he said.