Two years on from Bushmills change of owner, where is the Irish whiskey segment today?

Two years on from Bushmills' change of owner, where is the Irish whiskey segment today?

One of the more lively spirits sectors in recent years, Irish whiskey is certainly on the up. But, on the second anniversary of Bushmills' change of ownership, Ian Buxton asks if the country's distillers are in danger of over-stating Irish whiskey's prospects.

It was two years ago this month that Diageo announced its intention to offload Ireland's second-biggest whiskey brand to Jose Cuervo, as part of the deal to take full ownership of the Don Julio Tequila brand.

Eleven years ago, when Diageo made the Bushmills acquisition, the group said it saw "huge growth potential" for the brand, with then-CEO Paul Walsh "looking forward to utilising our marketing expertise and distribution capabilities to catapult this brand into the global whisk(e)y market".

Fast forward to late-2014, and the head of Bushmills' new parent was similarly bullish. "This is the most important purchase made by Cuervo in its entire history," said Jose Cuervo's CEO, Juan Domingo Beckmann. "We see this acquisition as a fantastic opportunity to continue to nurture and grow the Bushmills brand globally. Bushmills will be in very safe hands."

Since then, little seems to have happened at Bushmills. Save for a new distributor in Italy and a couple of low-profile launches in the Global Travel Retail channel, the distiller has steered clear of the headlines since its change of owner.

Other players, meanwhile, have not let the grass grow under their feet, with significant investment by William Grant & Sons, Brown-Forman and Illva Saronno, while a growing number of smaller craft distillers are contributing to an exciting market. Just 30 years ago Irish whiskey consisted of two distilleries in common ownership: today, 18 are working, with a further ten in the pipeline.

Indeed, according to Mark Reynier, CEO at Renegade Spirits (and now a year into distilling at Waterford), there's a case that "everyone should calm down. Great things are happening and I'm greatly encouraged," he says. "But, there's a risk of over-exuberance."

At William Grant's new Tullamore Dew distillery, where construction of a new bottling hall has begun and a grain whiskey facility is due to come on stream within the next 12 months, global brand director Caspar MacRae sees a need to "broaden the appeal of the category".

"All credit to (market leader) Jameson," MacRae, concedes, "but the challenge now is to offer appealing, high-quality alternatives to the consumer new to whiskey who is drawn to Irish. We are committed to building for the long-term."

Meanwhile, Jameson continues to record double-digit growth for its owner, Pernod Ricard. According to the global innovation & prestige whiskeys director at Pernod's Irish Distillers division, Brendan Buckley, Jameson, which accounts for around 70% of total Irish whiskey volumes globally, should see sales reach some 6m cases in the group's next fiscal year. "We have seen continued progress on Jameson," he says, "building the brand in key markets through our programme of tasting and advocacy, especially amongst the on-premise."

Future efforts will seek to establish Jameson as a truly global brand. Leading markets, such as the US, Canada and the UK continue to grow whilst the company identify "new frontiers" such as Latin America and Asia for further international expansion. "The appetite in Japan for premium expressions and high-end whiskies is tremendous," says Buckley. "We have some exceptional new products in the development pipeline."

Elsewhere, there have been single malts from Tullamore Dew - designed, MacRae says, "to create awareness of our whiskey-making skills"- and Irish Distillers has been active in releasing new pot still whiskies such as Green Spot Ch. Leoville Barton, Midleton Dair Ghaelach and the Redbreast Lustau expressions. "It's been a very busy couple of years" Buckley says, but warns that "we cannot build the category alone. Irish whiskey needs new players – the more the merrier – provided that quality is maintained."

To this extent, both William Grant and Irish Distillers are supporting the Irish Whiskey Association, with Irish Distillers' technical director, David Quinn, providing hands-on assistance to new entrants through the IWA's nascent mentoring programme. "It's better for all if the new guys make good whiskey," maintains Buckley.

Renegade's Mark Reynier would agree. Noting that within Irish whiskey there are "over 100 labels from just three distilleries", he is keen for labelling and presentation to be made more clear, to avoid any risk of consumer confusion, or even disenchantment. "This could discredit the category and cloud the sector," he believes. "In the current vacuum, independent bottlers are operating on a mixture that's part enthusiasm, part naivety and, in some cases, part deception."

Overall, though, all is optimism, even if Bushmills is hiding its light under a bushel. "I know what we're doing," insists Reynier "and everyone else can do their own thing – there should be room for all."

Buckley summarises the prospects: "I'm very optimistic about the future of Irish whiskey," he says. "Now is the time for brown spirits – the future fundamentals are solid."

For Tullamore Dew, MacRae notes that "right now, interest and demand outstrips the ability to supply – which is challenging, but a great place to be."

All this makes the enthusiasm of Diageo and Jose Cuervo's CEO seem prescient. Irish whiskey is enjoying huge growth potential, globally. Here's hoping the next two years will bring a breakout for Bushmills as the craic keeps flowing.

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