Ian Buxton

Comment - Spirits - Irish Whiskey: Set to Cause a Rattle & Hum?

By | 29 October 2013

The recent spate of activity in the Irish whiskey category suggests that the sub-category is looking to make waves in the spirits world. Ian Buxton takes a closer look and considers whether all the fuss is justified.

What exactly is going on in Ireland? Last time I looked, the country was virtually broke as it's 'Celtic tiger' economic boom got a case of the yips. And yet, almost weekly I am told of distillery expansion and construction, and brand launches galore.

It’s a far cry from the moribund Irish whiskey industry of the mid-1960s. Back then, the sub-category was on the ropes and its recovery was far from certain. It's taken a good few years, and it’s been a long and hard road, but right now Irish whiskey is in as good a position as it has been for more than a hundred years.

If present trends continue, we will soon see many new entrants reclaiming the craft heritage that was Irish distilling in its heyday. While Pernod's Irish Distillers unit, owner of the all-conquering Jameson whiskey brand, has embarked on a remarkable expansion programme at its Midleton facility, and the news of Illva Saronno's investment in Walsh Whiskey is just the latest boost, smaller players are adding variety and colour to the sector. These start-ups might not like to admit it - at least in public - but right now they’re enjoying a free ride on the coat-tails of their big brothers’ investment in building the global image of Irish whiskey; reaping those very real benefits while beating the drum for authentic, artisanal production.

So, who are these entrepreneurial tiddlers? Ignoring the rather more substantial efforts of Diageo (Bushmills), Beam Inc at Kilbeggan and William Grant & Sons at Tullamore Dew, there are at least a half-dozen other projects underway.

They range from those already in production to others that are still on the drawing board. Right now, whiskey is being made in Europe’s most westerly distillery at Dingle in the south-west of the country. With a projected output of only two casks a day, however, it’s unlikely to trouble Jameson any time soon. But, with a visitor centre in what is a popular tourist destination, and a white spirits still to generate immediate cash flow, it has first-mover advantage in the craft distilling sector.

The Dingle distillery will not want for competition, with projected new boutique distilleries planned or under development in Belfast, Carlow, Horse Island and County Down, among others. On Horse Island, in County Cork, Roaring Water Farm & Enterprises has applied for planning permission and is hoping to commence distillation early next year. At this early stage, the company's website shows little more than some tantalising scenic landscapes – as well as laying claim to “Ireland’s Original Island Distillery”. At very least, it will be a lovely spot to visit.

Dublin was the original centre of Irish distilling but sites such as William Jameson’s distillery in Marrowbone Lane were closed and silent by the mid-1920s. Today, the Teeling family, who sold the Cooley company to Beam Inc in 2011, is discussing a new operation there through The Teeling Whiskey Co. A feasibility study is “well advanced”, I have heard. With the Guinness Storehouse attraction drawing over 1m visitors a year, and the Old Jameson Distillery tour attracting more than 200,000 guests, the tourist potential of a working distillery in the capital is not to be under-estimated.

If that were not enough, The Irish Whiskey Co has announced that it will set up 'The Great Northern Distillery' in Diageo's former brewery in Dundalk. This is no boutique operation, however: The EUR35m (US$48.3m) project has been described by John Teeling as “an efficient, low-cost, quality distillery”, which he says will aim to “supply segments not currently served at all or at best poorly served”.

In their previous incarnation, the Teelings saw around one-third of Cooley's sales come from third-party bottlers and brand owners. The family has in-depth experience of this specialist market, then. 

With Cooley no longer supplying these customers, Shane Branff of The Feckin Irish Whiskey brand - previously supplied by Cooley – has moved to build his own facility at Kircubbin in County Down. The first spirit ran in May this year – a visitor centre, bar, restaurant and museum will follow.

Behind all of this naked ambition is the fact that sales of Irish whiskey continue to grow at double-digit rates – a trend that is expected by all the players to continue for years to come.

The rate of development may not quite match the number of boutique Scotch whisky distilleries that are anticipated to open their doors in the next few years. But, relative to the size of the market, Irish whiskey is hardly slacking behind. With a rich distilling heritage to emulate, a well-established tourist trade and high growth predictions - sustained by the investment of the major brands - it’s more than likely that the sub-category's best years lie ahead.

Just think of the craic they’ll have then.

Expert analysis

Global market review of non-Scotch whiskies (US and Bourbon, Irish, Canadian, Indian and Japanese)

The non-Scotch whisk(e)y market – chiefly comprising Irish, US, Canadian, Indian and Japanese whiskies – is one of the most dynamic areas of the global wines and spirits arena. Between 2001 and 2010, the non-Scotch whiskies boasted an impressive 6.9% compound annual growth rate (CAGR) to 209.6m nine-litre cases. This latest market research report from just-drinks/The IWSR provides 2010 actual volume consumption data, 2011 estimates, key market analysis for each whiskey origin plus exclusive interviews with the leading brands.

Sectors: Spirits

Companies: Diageo, Pernod, Guinness, Jameson, William Grant, Cooley, Beam Inc

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