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When Diageo announced its exit from the Irish whiskey category in 2015, through the divestment of the Bushmills brand and distillery to Casa Cuervo, many observers were left confused: Why would the world's leading spirits company want to exit a spirits sector that was very clearly on the cusp of a boom?

Roe & Co will roll out across key cities in Europe

Roe & Co will roll out across key cities in Europe

Despite the group's protestations at the time - and since - that the other part of the deal with Cuervo, which gave Diageo full control of Don Julio Tequila, fully justified the sale, a complete withdrawal from Irish whiskey looked drastic at best, and foolhardy at worst.

Two years on, and the company last week confirmed just-drinks' exclusive report late last month that it is returning to the segment through the launch of new brand Roe & Co; a blended whiskey produced with liquid from undisclosed third-party distilleries across the "island of Ireland". Backing up the brand will be a new distillery that Diageo has pledged to build in Dublin, at its St James's Gate site.

Diageo will be keen to avoid accusations that it made a mistake selling Bushmills. But, aside from the tantalising appeal of premium Tequila, the swap of Don Julio for Bushmills spelt out something else: It wasn't the Irish whiskey category that was the problem, it was the brand. Going up directly against Pernod Ricard's Jameson, with its near-70% share of Irish whiskey globally, Bushmills was never going to give Diageo the kind of category traction it is used to having elsewhere in spirits. 

In July last year, CEO Ivan Menezes said the firm had "tried very, very hard" during its tenure to accelerate Bushmills sales, but to no avail. "It's not the Irish whiskey sector that is up," he said at the time. "It's certain brands that are up. We tried for a long time to make Bushmills hot."

All the while at Pernod, Jameson was - and still is - getting hotter and hotter. When Pernod acquired Jameson owner Irish Distillers in 1989, the brand's volumes were about 400,000 cases. Today, according to SocGen, they're at well over 5m, and growing. Late last year, the firm's global innovation & prestige whiskeys director, Brendan Buckley, told just-drinks that Jameson should see sales break the 6m-case barrier in the group's next fiscal year.

Diageo's approach this time around is to tap into what it claims is a different sub-segment to Jameson; one that the brand has not yet managed to transcend. Retailing at US$37.60 per 70cl bottle, Roe & Co is targeted at the super-premium end of Irish whiskey, with Jameson safely tucked away in the mainstream/premium bracket.

At the same time, the company comes at Irish whiskey with a blank slate. Roe & Co may be a blend of liquid from existing distilleries, with a name that hails back to the George Roe & Co distillery in Dublin that closed in 1926, but it doesn't hold the trappings of heritage that come with an established distillery and brand. Nor is it burdened with comparatives - expectations can be as conservative as Diageo chooses.

Roe & Co should also benefit from Diageo's ability to control its roll-out and positioning better than if the company had inherited established partnerships. The brand has become part of the company's Reserve portfolio - a roster of premium brands with close ties to Diageo's World Class bartender competition. Moreover, the launch will initially be limited to European cities, including Dublin, London, Madrid, Berlin and Stockholm; all important on-premise hubs across the continent. Both moves point to the careful seeding of a premium brand. 

In a recent interview with just-drinks, consumer futurist Will Higham said young consumers are more interested in brands that carry "a story relating to where it comes from" rather than a product from their own locality. In this new/old brand, Diageo has created the beginning of a new story.

The middle and the end are there for the writing. 


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