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Even In A Boom Time For All Whiskies, Irish Whiskey’s Growth Numbers Stand Out

November 26, 2013

Few categories can match Irish whiskey’s recent growth trend. Irish whiskey advanced by 18% in the U.S. market last year to surpass the 2-million-case threshold, according to Impact Databank. It’s been a remarkable ride for a category that, until recently, took a backseat to other whiskies for most of the year. “It’s become evident that both the industry and consumers are no longer so heavily focused on St. Patrick’s Day when it comes to Irish whiskey. Instead, it’s evolved into a 52-week proposition,” says Ken Reilly, category marketing director at William Grant & Sons USA, which markets Tullamore Dew, the U.S. market’s third-leading Irish whiskey brand.

Irish whiskey’s U.S. growth rates have been healthy across the board, as each of its top four brands have risen steadily over the past half-decade. Still, Jameson remains the market’s only big seller at 1.6 million cases last year (+20.1%). The other leading Irish whiskey brands—including Bushmills, Tullamore Dew and Powers—collectively sold less than 350,000 cases in 2012. But all those brands—as well as new entrants like Beam Inc., which has an Irish whiskey range led by Kilbeggan and fast-rising 2 Gingers—are seeking to nibble away at Jameson’s nearly 80% share of the category.

Though a late arrival to the flavor game, Irish whiskey increasingly is embracing the phenomenon. Bushmills Irish Honey found quick success in the U.S. after its early 2012 launch, and Diageo is now unveiling the honey-infused extension in a host of markets around the globe. Paddy became the latest to enter the segment in recent weeks, when it introduced honey-flavored Bee Sting and Devil’s Apple in the U.S.

But much of Irish whiskey’s innovation has been at the higher end. After years of impressive volume growth, the category’s leading players are focusing on premiumization. Tullamore Dew is currently advancing quickly in the U.S., but its share of the U.S. Irish whiskey market is less than 5%, compared to a global share of 12.6%. “In many ways, we’re looking to grow Tullamore Dew in the way that William Grant (which acquired the brand from Ireland’s C&C in 2010) has grown Hendrick’s, and that’s with an on-premise focus where we’re actively educating bartenders and consumers about the brand,” says Reilly. William Grant is doing this in part by taking the brand further upscale through line extensions. Tullamore Dew Original ($21-$25 a 750-ml.)—a blend of grain whiskey, pot still whiskey and malt whiskey aged for 4-7 years—now comprises 95% of the brand’s business. But William Grant is putting new focus behind Tullamore Dew’s more upscale products, including its 10-year-old single malt ($35-$40), 12-year-old reserve ($40-$48) and the newest addition, Phoenix (around $55), an overproof (55% abv) extension now rolling out in limited quantities in key U.S. markets.

Jameson has also found success via the new product route, with Black Barrel Select Reserve ($35-$40). Launched in late 2011, the extension—generally aged for 12 years, compared to the core brand’s 5-7 years—is now available in around a dozen states, and will gradually roll out nationally over the next three to four years. Simon Fay, international brand director for Pernod’s Irish Distillers division, says Irish Distillers is currently working on some new initiatives for Jameson’s upscale Reserve range. Pernod Ricard still sees considerable upside for the brand. “We still have lots of opportunity, because Jameson remains quite small in a number of key footprint states like Texas, Florida and even California,” says Fay.

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