Irish Whiskey Looks To Benefit As On-Premise Reopens

The Irish whiskey sector has been among the fastest-growing categories in the American spirits market over the past decade, and had been on track to surpass 5 million cases in the U.S. for the first time ever in 2020. But the pandemic had a significant impact on the category, as last year’s off-premise gains weren’t enough to overcome on-premise losses, with total depletions slipping 0.5% to 4.6 million 9-liter cases, according to Impact Databank. The U.S. is still the largest market for Irish whiskey in the world with 40% share of global volume, and it accounted for 57% of all export shipments on a value basis, at $313.9 million in 2020.

Pernod Ricard dominates Irish whiskey with an 80% market share—primarily due to No.-1 brand Jameson—but the ranks of its competitors are growing, albeit from small volume bases. Among them are William Grant & Sons (Tullamore Dew) and Proximo Spirits (Proper No. Twelve and Bushmills). Jameson’s U.S. depletions fell nearly 4% last year to 3.6 million cases, its first decline in 25 years, according to Impact Databank, as on-premise restrictions subdued its performance. But the brand has gotten a boost lately from a new line extension, Jameson Cold Brew (91,000 cases in its launch year of 2020), as well as from its higher-priced Black Barrel variant (+17% last year).

Proper No. Twelve, in which Proximo recently gained a controlling stake, has been the category’s standout lately, surging more than 77% to 232,000 cases in 2020, and has climbed to No.-3 overall among all Irish whiskies in the U.S. in only its third year on the market. Beyond the top brands, other fast-growing Irish whiskies last year included Bacardi’s Teeling (+10%), as well as Pernod Ricard’s Redbreast (+19%), Midleton (+21%), and Spot (+19%). As the market matures, brand-owners are looking to premiumize by increasingly pushing their high-end releases—including single malts, super-premium blends, and Ireland’s signature single pot still whiskey.

Before the pandemic, Irish whiskey had been on pace to surpass Scotch whisky consumption in the U.S. by 2025. But the unexpected decline last year has upended those projections, and while on-premise reopenings are gaining steam, it’s far from certain Irish whiskey will reach the 5-million-case threshold this year.

In the 13 weeks ending April 24 in Nielsen channels, Irish whiskies fell 3% by volume compared to the year prior, as they lapped consumer pantry-loading early in the pandemic. Irish whiskey volumes grew 6% during the first quarter of 2021 in control states, but they lagged the growth of both American and Canadian whiskies in that channel, which accounts for nearly one-quarter of the total U.S. spirits market.—Juan Banaag

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