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Major Spirits Marketers Seize On Irish Whiskey Opportunity

October 30, 2017

Irish whiskey continues to surge, with the category advancing by double-digits both in the U.S.—its top market with a 41% share—and internationally. Globally, Irish whiskey exports rose 18.5% to €256 million ($302m) for the first six months of 2017, according to the Irish Whiskey Association, with the U.S. up by a robust 22%.

The number of Irish whiskey distilleries has increased from only three in 2006 to 18 today—and investment in at least 12 more facilities is in the works. In the U.S., volume rose 15% to 3.5 million cases last year, according to Impact Databank. With another year of double-digit growth projected for 2017, Irish whiskey has become synonymous with opportunity for suppliers.

Pernod Ricard-owned Jameson has dominated the category’s development in the U.S. market, accounting for about 80% of overall volume. While Jameson is projected to reach 3.2 million cases in the U.S. this year, up from 2.8 million cases in 2016, Pernod is also promoting experimentation through its single pot still portfolio, which includes Redbreast, Midleton, Powers, Green Spot and Yellow Spot. “Redbreast, the Spots and Midleton are in growth mode,” says Sona Bajaria, vice president for high end Irish whiskey at Pernod Ricard USA. “There’s been a resurgence of single pot still whiskey, which is truly unique to Ireland.”

Other leading suppliers are also seeding super-premium and limited-edition bottlings. In October, William Grant launched Tullamore Dew Cider Cask ($39.99 a 1-liter), a fall seasonal offering finished in hard apple cider barrels for three months. Tullamore Dew overtook Bushmills in 2015 as the number-two Irish whiskey brand in the U.S., and crossed 200,000 cases last year.

Bushmills enjoyed its first U.S. increase in three years in 2016, jumping 15% to 195,000 cases. Proximo recently extended Bushmills with Red Bush ($23), a blend of triple-distilled Irish single malt and Irish grain whiskey matured in first-fill Bourbon casks. Earlier this year, brand owner Casa Cuervo unveiled plans for a £30 million ($37m) expansion of its Bushmills distillery in County Antrim.

Beam Suntory recently added a new single grain offering to its Kilbeggan range, which is finished in a mix of ex-Bourbon and fortified wine barrels and sells at $30. Beam Suntory has also introduced a limited-edition 16-year-old single malt under its Tyrconnell brand retailing at $100. Beam Suntory’s Cooley Distillery in County Louth was acquired from the Teeling family in late 2011 for $95 million.

In turn, the Teelings started their own company, and recently partnered with Bacardi in the U.S., moving from Infinium Spirits. As part of the deal, Bacardi took a minority stake in Teeling, which is known for its flagship 46%-abv Small Batch Irish whiskey ($40). Single Grain ($50) and Single Malt ($60) round out the core lineup. Meanwhile, Brown-Forman and its partners, the Conyngham family, opened the $50 million, 600,000-case Slane Irish whiskey distillery in September. The inaugural 40%-abv expression of Slane ($29.99 a 750-ml.)—crafted from sourced whiskies—debuted in New York this summer, with expansion to follow.

While Diageo sold Bushmills to Casa Cuervo in 2014, the drinks giant has decided to revisit the category through a €25 million ($28m) investment in a new Dublin distillery that will produce an upscale brand called Roe & Co. In the meantime, the newcomer, which has yet to launch in the U.S., is being sourced from unnamed third-party distilleries.

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