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Building Boom: With Irish Whiskey On Fire, New Distilleries Are Sprouting

September 4, 2014

In the forlorn Liberties section of Dublin, once home to textile mills and long before that whiskey making, brothers Stephen and Jack Teeling are building the city’s first new distillery in 125 years. Scheduled for completion by December, the facility will start producing 100,000 cases of malt whiskey annually next year. “This is no boutique distillery,” says Stephen Teeling, sales and marketing director for Teeling Whiskey Co. “The Irish whiskey category is expanding rapidly, and we wanted to build a facility that could contribute serious volumes to the marketplace.”

Meanwhile, new Irish whiskey player Dublin Whiskey Co., is investing £10 million ($16.6m) to develop a 300-year-old site on Mill Street, also in Dublin’s Liberties section, as a distillery and visitors center. Work will start in early 2015, and the site should be ready for whiskey production by late next year. Dublin Whiskey Co. will create a range of single malt and Irish pot still whiskies, with a capacity of more than 2 million bottles annually.

For most of the past three decades, the Irish whiskey business has been notable for a mood of near-complacency. Just three distilleries—the Jameson facility in Midleton near Cork, the Cooley Distillery in County Louth (once managed by the Teeling family and now owned by Beam Suntory) and the Bushmills facility in Northern Ireland—supplied virtually all the world’s Irish whiskey. Now, amid frenetic growth, new players are jumping into the category and laying plans for fresh products and new distilleries.

By one count, there will be a total of 10 Irish whiskey distilleries in operation within the next few years, and applications for two dozen more are in progress. One of the most notable distillery developers is William Grant & Sons Ltd., owner of the Tullamore DEW brand. After a 20% rise in U.S. sales last year to 114,000 nine-liter cases, the company is now set to open a new $15 million facility in Tullamore. The distillery will have an annual capacity of 1.5 million cases—nearly double the brand’s current global volume of 850,000 cases. Previously, Tullamore DEW sourced its whiskey from Midleton, Bushmills and Cooley.

“This new project amounts to one big vote of confidence in the Irish whiskey category by William Grant,” says Ken Reilly, the company’s category marketing director. “There are a number of companies currently building or planing to build distilleries in Ireland. All of us are making a strong bet on the future.”

Other new distilleries include West Cork Distillers (which owns the fledgling Kennedy and Cavanagh brands), the Dingle Distillery on Ireland’s southwest coast and the Belfast Distilling Co., housed in a former prison in Northern Ireland’s administrative capital. Other new brands are sourcing whiskey to sell now rather than waiting for their own facilities to be built. Those labels include Irish Mist, owned by Gruppo Campari; Donegal Estates, marketed by Star Industries in Syosset, New York; and Uisce Beatha, imported by Marsalle Co. in suburban Chicago.

Marsalle’s Uisce Beatha (Gaelic for “water of life”) is debuting in a half-dozen markets this month at $35 a 750-ml. bottle. For now, Marsalle’s whiskey is also coming from old Cooley stocks that aren’t owned by Beam. Vice president of sales and marketing Robert Shea notes that Irish whiskey isn’t nearly as crowded as other spirits categories. “Just one brand dominates the business,” he says. “We think that lack of variety leaves room for other brands to flourish.”

The category’s leading player, Irish Distillers (Pernod Ricard), isn’t standing pat. In the face of strong demand, Pernod Ricard unveiled the $160 million distillery expansion last year to boost production of Jameson. The facility’s capacity doubled, but the company is still short on some crucial stocks. Its Jameson Black Barrel ($35 a 750-ml. bottle) launched in New York in 2011 and expanded to 15 markets a year ago. The expression goes national this fall, though it will be highly allocated. “We’ve had to forego introducing Black Barrel to some international markets because we face so many supply constraints,” says Paul Di Vito, vice president of marketing for Irish whiskey at Pernod Ricard USA.

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