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Irish Spring: Exceptional Growth Continues as Americans Embrace Irish Whiskey

Posted on  | February 22, 2012   Bookmark and Share
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Had a Pickleback lately? Chances are the answer is “no” if you are older than, say, 35. But the quirky drink, a curious double shot ritual involving Jameson and pickle brine, exploded in popularity a couple of years ago, catching the zeitgeist of hipster bartenders and their young customers and adding yet another boost to the rocketing popularity of Irish whiskey in the U.S.

The Pickleback is just one benchmark in the growing trend to return Irish to its pre-Prohibition standing as the country’s favorite imported whiskey. Sales continue to surge—a September 2011 Nielsen report indicated the category was up 21.5 percent over the previous 52 weeks, hitting nearly 1.4 million cases. The unprecedented boom and attendant attention has shaken up the category quite a bit as the year closed. In December, Beam Global grabbed the last independent producer in Ireland, Cooley Distillers, supplier of many contract and private label whiskies as well as their own four labels—Greenore grain whiskey, Kilbeggan blended whiskey, Tyrconnell single malt and Connemara peated single malt.

Also in December, Pernod Ricard subsidiary Irish Distillers announced plans for a 100 million Euro investment in the expansion of its distillery in Middleton, now operating at full capacity. Irish Distillers aims to triple the sales of Jameson by over 9 million cases by 2020—sales of the whiskey totaled 3.5 million cases in 120 countries last year, about 1 million in the U.S.

William Grant & Sons is considering County Offaly as the potential site for a new Tullamore Dew distillery. According to reports in the Irish Times in December 2011, the company met with county officials to discuss the project, which would mark the return to production in its hometown of Tullamore.

As you might expect in such a relatively small business—only four large distilleries now operate—such signs of investment buoy all. “When you have great things happen in your category and segment, it brings in a broader audience,” says Yvonne Briese, VP of marketing, Diageo NA Whiskey.

Momentum and Promotion

As the overall leader and the company that controls nearly three-quarters of the U.S. market, Jameson continues to lead the growth, outpacing the category overall. Recently, they’ve followed increased advertising support—the latest seen on cable TV, digitally and outdoors focuses on the apocryphal heritage of John Jameson—with a limited launch of Jameson Black Barrel. The whiskey, made with a higher proportion of pot still spirit aged longer than regular Jameson in bourbon and sherry casks, is only available in New York State currently.

There are other new releases heading to market in advance of the March selling season. Pernod Ricard is also working the ultra-premium end with a February release of Redbreast 12 Cask Strength, a non-chill filtered version of the single pot still brand. Aiming to give the boom in flavored whiskies an Irish accent, Bushmills has just released a 70 proof honey version. And California’s Concannon Vineyards teamed up with Cooley to launch Concannon Irish Whiskey, matured in bourbon barrels for a minimum of four years with a portion finished for four months in Concannon Petite Sirah wine barrels, giving it a fruitier note in what the importer calls the Concannon Effect.

Irish whiskey has continued to grow at an impressive rate for a number of reasons, said Cooley global brand ambassador John Cashman in an interview before the Beam takeover was announced. “Until 20 years or so ago, Irish whiskey was seen as something consumed only by the Irish community, but then things Irish became cool again,” he said, citing the international boom in Irish-themed pubs and even the emergence of pop groups such as U2, the Cranberries and Sinead O’Connor. In addition, he thinks current young legal age drinkers, raised with a taste for sweet beverages, have found Irish a natural fit when they first
consider whiskey.

The growing U.S. market has inspired Tullamore Dew to significantly increase its advertising and marketing presence, says global brand ambassador John Quinn. “We’ve been looking at the opportunity, because nearly a third of all Irish in the world is sold in the U.S., and we asked ourselves why we weren’t spending more.”

Tullamore is very successful in Europe, and the second largest selling Irish overall, but it’s only since the Grant takeover that broad marketing initiatives like the current “Irish True” campaign were possible. New bottle and label designs are coming soon to help build the brand here, as well as an East Coast–based brand ambassador.

Raising the Bar On-Premise

According to Wayne Hartunian, VP for whiskies and Cognac for Pernod Ricard, the introduction of Jameson Black Barrel, designed with cocktails in mind, will provide a trade-up opportunity between Jameson and Jameson 12 Year Old. While most whiskey makers pay more attention to the off-premise, Hartunian points out that Jameson is “extremely strong on-premise and has been for a while.” Pernod’s research indicates bartenders often pick Jameson as their brand of choice for shots.

Importers of Michael Collins at Sidney Frank have noted the on-premise surge, says director of public relations Kate Laufer. “We’re seeing the trade embracing the brand through creative cocktails, as well as reintroducing contemporary cocktails with a twist. The bartenders enjoy the unique taste profile that Michael Collins brings with its double distilled production method.”

Laufer hits on a key point in the growth of Irish whiskey: Fans are discovering different distillations regimes (only Cooley regularly produces double-distilled whiskey), peat levels (Cooley again, although 100 years ago most Irish whiskies were peated), ages and finishes. Cashman compares the evolution to the way beer drinkers pick different styles for different occasions and expects more experimentation among suppliers.

Novelty Becoming the Norm

While in limited supply, expressions that extend the range of Irish have been available for some time: Knappogue Castle, which built its reputation on vintage bottlings, has continued to push the boundaries, most recently with Knappogue Castle Twin Wood 17-year-old single malt Irish, the second in the brand’s Twin Wood series following a 16-year-old variant last year. Named for its use of both bourbon barrels and sherry casks, only 4,500 bottles of Twin Wood 17-year-old will be available, retailing for $100
a bottle.

Jameson has developed an Irish category management program for the off-premise, perhaps anticipating the expansion of styles, suggesting that retailers shift Irish away from Scotch whisky and adjacent to North American whiskies, where the category is more likely to compete.

Hartunian notes that while the core Irish drinker is between 25 and 34, there’s an increasing interest among 21 to 25 year olds as well. That’s helped push Irish up in months other than December and March, the traditional key periods.

“It’s a very vibrant segment of the whiskey category, so we look at it and see a lot of opportunity,” says Briese of Diageo. “Being number two, we see the leader paving roads for us to find our own special place with the Irish whiskey consumer.” That includes not only Bushmills and Black Bush, which has developed a cult following, but also higher-marque aged malts, all part of the “Since Way Back” marketing and affiliation program.

Can the Irish get Edgy?

As with many spirits, Irish whiskey is to a large extent bound up in a sense of tradition. But in today’s market, innovation is often the key to breakout marketing. While Tullamore Dew has the tradition side covered for William Grant & Sons, the importer has fresh ideas in mind for The Knot, a strong (100 proof), sweeter variation on the Irish theme. The name and front label—featuring a Celtic knot—nod respectfully to tradition, but back label sets the tone for an edgy approach:

“By cracking this seal of The Knot you accept that drinking is never to be taken lightly and promise to act in a responsible fashion—not like some blithering idiot. You promise to drink The Knot straight up in a proper shot glass, rather than mixing it in some sort of novelty, tiny umbrella, fruit fiasco. And finally, you vow that you will never drink to anything that you are not prepared to go through with. If, in any way, you are not willing to abide by these conditions, by all means, please refrain from opening this bottle.”

Targetwise, The Knot is clearly aiming for a hip, young demographic, as evident in the spoofy website shotoftheknot.com, with retro black and white imagery and rather salty videos.


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