For much of the past decade, as sales of Irish whiskey soared, it was sometimes forgotten that one brand—Jameson—was overwhelmingly accountable for that performance. After all, Jameson controls 82 percent of Irish whiskey sales in the United States, according to Impact Databank.
Amid a host of new brands and distilleries opening across the Emerald Isle, Irish whiskey is rapidly evolving from being a one-brand category. Ten years ago, there were but three distilleries in all of Ireland. Today, some 16 distilleries are on stream, and more than a dozen are under construction. The Irish Whiskey Association, founded in 2014 and currently in charge of mapping out tourist trails and industry promotions, estimates that capital investment in whiskey production in Ireland will surpass $1 billion over the next decade. This is an enormous number for an area of just 6.5 million people across Ireland and Northern Ireland.
With its 15-percent gain last year, Irish whiskey surpassed 3 million cases sold in the U.S. market, according to Impact Databank. Jameson maintained its position of dominance with a 16-percent sales rise to 2.8 million cases. Also of note, the longtime No.-2 in the category, Bushmills—which had been losing sales since 2013—enjoyed a 15-percent increase in 2016, under the auspices of parent company Jose Cuervo. Less than a year ago, Bushmills received permission for a nearly $40 million expansion that will add 29 new warehouses and effectively double production over the next 10 to 15 years. Also rising sharply last year was William Grant & Sons’ Tullamore DEW brand, which was up 16 percent. Grant—which once depended on the old Cooley Distillery for its liquid—spent $50 million to open a new Tullamore DEW Distillery three years ago, and the investment could be paying off big in the next few years as the brand races to introduce fresh expressions.
While many of these new distilleries are backed by small entrepreneurs, spirits giants are jumping into the business as well. Diageo, which sold off Bushmills to Cuervo just a few years ago, launched a new premium Irish whiskey brand called Roe & Co. earlier this year. The company also announced plans to build a new distillery not far from its Guinness brewery in Dublin at a cost of nearly $30 million.
Meanwhile, this summer Brown-Forman Corp. launched its own Irish whiskey brand, Slane, and unveiled a new distillery at Slane Castle, located 30 miles north of Dublin. John Hudson, Brown-Forman’s vice president of global innovation, is predicting that global Irish whiskey volume—which reached 7 million cases last year—will triple to more than 20 million cases within the next 15 to 20 years. Irish whiskey had U.S. retail sales of just under $1 billion last year, and Hudson notes that the category has plenty of room to grow before catching other whiskey categories. Bourbon, for instance, recorded sales of more than $5 billion in the United States last year alone.
“It’s impressive that American Bourbon has been growing eight to 10 percent annually in recent years,” says Hudson. “But consider that Irish whiskey sales have been up nearly 18 percent over the past five years. It gives us confidence that Slane can eventually be a large global impact brand, perhaps in the range of a label like Woodford Reserve. We don’t intend to be a boutique player.”
Teelings Show The Way
For the smaller players, the Teeling family offers a model worthy of emulation. The patriarch, John Teeling, founded Cooley before selling it to Beam in 2011. Two years ago, he launched into a fresh venture called Great Northern Distillery that’s serving as a contract distiller, providing whiskey for many of the new brands cropping up. John’s sons, Stephen and Jack, launched Teeling Whisky Co. in 2012 and opened a new distillery in Dublin in March of 2015. Thus far, the new distillery—which represents a $12 million investment and recently announced an expansion—has attracted 185,000 visitors. It was the first distillery built in Dublin in over a century, but five or six more are planned, starting with the Pearse Lyons Distillery opening this fall. The facility is backed by the same family that set up Town Branch Distillery, part of Alltech Lexington Brewing & Distilling Co., a few years ago in Kentucky’s Bourbon country.
In June, Teeling struck a deal with Bacardi Ltd. under which Bacardi became the company’s exclusive U.S. importer, effective September 1st. Bacardi also took a minority stake in Teeling as part of the deal. Teeling could eventually be producing 2 million liters a year—enough for more than 200,000 cases of whiskey. With liquid sourced primarily from older Cooley stock, it’s already selling a range of products in the U.S. market, from its flagship Teeling Small Batch ($40 a 750-ml.), finished in rum casks for six months, to Teeling Single Malt ($60), finished in five different types of wine casks, and Teeling Single Grain ($50), fully matured in California red wine barrels. There’s also Revival 14-year-old ($125), a Vintage Reserve 24-year-old finished in Sauternes casks ($400), as well as other expressions sold outside the United States.
There will be more coming soon from Teeling, including the unaged Spirit of Dublin (which is bottled at 52.5-percent abv), along with the Brabazon Bottling series, a range of single malt whiskies focusing on the influence of fortified wine casks, such as Sherry. “As you can see, there’s no shortage of innovation here,” says co-owner Stephen Teeling, who also serves as director of sales and marketing.
Pearse Lyons, meanwhile, has plans for four or five different whiskies, including one matured in a Sherry cask and another, sourced from an undisclosed Irish distillery and aged for seven years, due to ship this fall. “We have a 12-year-old coming a little later,” notes general manager Tracey Flinter. “It’s our hope to begin exporting as soon as possible, with America and China as our first priorities.”
Jameson Charges Ahead
Jameson, of course, isn’t resting on its laurels. Earlier this year, Pernod Ricard announced yet another expansion of the Midleton Distillery in County Cork, this time investing about $11 million in three new pot stills. To supplement its best-selling Jameson Original ($25 a 750-ml.), a few years ago Jameson launched the fuller-tasting Black Barrel ($37) as well as Caskmates ($30). The latter, aged in beer barrels, is being cross-promoted in a partnership called “Caskmates Drinking Buddies” with seven different American breweries, including Angel City Brewery in Los Angeles, Captain Lawrence Brewing Co. in New York and Deep Ellum Brewing Co. in Dallas. As part of its new Maker’s Series, a year ago Jameson launched Cooper’s Croze ($70), aged in both virgin American oak casks and used Sherry casks. This year marks the debut of the second Maker’s expression, called Blender’s Dog.
Retailers, however, remain fixated on Jameson Original. “Jameson owns Irish whiskey, but beyond that many consumers don’t even realize they’re an Irish product,” says Tim Turner, category manager for wine and spirits at the 8,200-store Walgreens drug chain based in suburban Chicago. “It’s a great blend: By itself the whiskey is sweet and very approachable, yet it also lends itself to cocktail mixes and pairing with things like ginger flavor.”
While Jameson continues growing, Pernod Ricard is also investing vigorously in its pot still whiskies. Redbreast sales are up nearly 19 percent a year since 2010, according to Impact Databank. Last year, the brand added Redbreast Lustau Edition ($70) to supplement its existing 12-year-old ($60), 21-year-old ($275), and 12-year-old Cask Strength ($75) variants. Powers’ volume has faltered, but that’s no surprise, since Pernod repositioned the brand from 40-percent abv to 43.2-percent abv and raised its price from $38 to $44. Other labels include Green Spot ($60), Yellow Spot ($110) and Midleton Barry Crockett ($280).
“Some of these whiskies are made for the connoisseur who’s very committed to the Irish whiskey category,” says Sona Bajaria, vice president of marketing for high-end Irish whiskey at Pernod Ricard. There’s also another target market, she notes: women. Bajaria reveals that nearly a third of Jameson purchases are now made by women, who also purchase 20 percent of the pot still bands. Her aim is to raise those ratios. “We’re dealing with a dual market,” she says. “The end consumer in many cases may be male, but women are often the predominant shoppers. We have to be effective in reaching them.”
Elsewhere, innovation is flourishing. In March, Bushmills launched a new Red Bush expression, aged in first-fill Bourbon barrels and priced at $24, a dollar or two higher than Bushmills Original. The company is also placing more support behind its 10-year-old ($35 a 750-ml.), 16-year-old ($75) and 21-year-old ($125) expressions. The age statements continue to be important, says Bushmills master distiller Colum Egan. “Consumers are demanding higher quality, and they’re also looking for different and better tastes,” he notes. “The age statements give us points of difference.”
The differences are typically coming to light amid a general premiumization. Beam Suntory acquired its 2 Gingers brand ($15.99 a 750-ml.) back in 2012 and its volume rose quickly, but last year it was flat in the United States at 58,000 cases. The reason, explains Beam director of world whiskies Ivan Hidalgo, has been a pull-back on some promotions in favor of higher-end offerings such as Kilbeggan Single Grain ($30), launched this past summer, and Tyrconnell 16-year-old ($100), which was introduced earlier in the year and quickly sold out. “We’ll be concentrating on premium and super-premium price segments in the future,” Hidalgo says.
For many Irish whiskey brands, the core product continues to anchor sales in important ways. Tullamore DEW, for example, offers a 12-year-old Special Reserve ($40 a 750-ml.) and the 55-percent abv Tullamore DEW Phoenix ($55), along with age-statement single malts which top out with the 18-year-old ($110). But Tullamore DEW Original ($24), priced to compete with Jameson, continues to account for 98 percent of sales. “The Original is our focus,” says senior brand manager Paige Parness. “It’s nice to have line extensions, but we’re still working hard to build awareness in a crowded category.”
Among newer players, West Cork Distillers is one of the most aggressive: When it launched in the United States in 2011, it began with West Cork Original ($25 a 750-ml.). Since then it has added Black Reserve ($40) and the 62-percent abv Barrel Proof ($55). Later this year, West Cork will launch two single malts, one aged in casks charred with Irish peat and another aged in bog oak barrels. Both will be priced at $45.
West Cork’s distillery will have capacity to produce 800,000 nine-liter cases annually by the end of this year. The distillery has started to contract-produce proprietary whiskies for other brands, such as The Pogues Irish Whiskey, as well as for European grocery chains like Lidl. West Cork co-owner John O’Connell scoffs at the concerns about category saturation. “Jameson has opened the door for all of us by popularizing Irish whiskey,” he says. “We can’t have too much. Consider that Irish whiskey volume worldwide is about 7 million cases a year and Scotch is over 100 million cases from more than 100 distilleries. We’ve got lots of room for growth.”
For now, many Irish whiskey brands are waiting on distilleries. Barr an Uisce (meaning “above the water” in Gaelic), which sources from West Cork and other places, launched 1803 ($70 a 750-ml.), a 10-year-old single malt, in the U.S. market last year. It has since followed up with Wicklow Rare ($50). “It was important that we get our brand into the market first—a distillery of our own will come later,” says managing director Jason Stubbs, who adds that “the U.S. craft distilling market has definitely been our inspiration.”
Another inspiration may be Castle Brands, which startled the entire industry in the 1990s when it introduced Knappogue Castle 1951 at $500. The company subsequently released other vintages, but now is going with age statements, including Knappogue Castle 16-year-old ($100 a 750-ml.) and the upcoming Knappogue Castle 21-year-old ($140).
It was Mark Andrews, Knappogue Castle’s founder and chairman, who paved the way for others in selling high-end Irish whiskey. “Our 16-year-old sells out—we can’t keep it in stock,” Andrews says. “People will pay those kinds of prices for Irish whiskey today.” The 1951 expression, he adds, is still available, with a current suggested retail price of $3,000. In Irish whiskey, it seems the sky is the limit.