Posted on | February 28, 2013
Written by | Jeffery Lindenmuth
Small but Potent, the Irish Whiskey Category is Proving to be Popular by Demand
You can’t credit success like this to the luck of the Irish: for 2012, Irish whiskey showed growth in every key global market, including a volume increase of 24% to 1.71 million nine-liter cases in the U.S., the number one market for Irish whiskey, according to Impact Databank.
“It shows no signs of stopping,” says Hannah O’Leary, brand ambassador for Jameson, the world’s leading Irish whiskey, owned by Pernod Ricard’s Irish Distillers. “The whole category is sort of a runaway freight train. People were once concerned that Jameson shots would be a fad, but there are no signs of slowing.” Jameson is indisputably the engine of this train, with 76% of Irish whiskey sales in the U.S., representing about 86% of growth, according to O’Leary. The growth of Irish whiskey is so dramatic, and prolonged, that this once heavily consolidated category is inviting impressive new investment.
Keys to Success
“I think it’s fair to say that our goal is to grow the category. Success is when Irish whiskey does well. We aim to grow the whole pie,” says O’Leary. While Irish whiskey remains a popular bar shot (about 60% of Jameson consumed in shot), the expanding usage opportunities and new consumers portend more, and broader, growth.
The industry hopes to develop a gradual trend toward year-round drinking, flattening out the dramatic peaks of December (holiday) and March (St. Patrick’s Day) consumption, notes O’Leary. There is also growth to be had in long drinks, especially Jameson and ginger ale, which appeals to the important female market for Irish whiskey. And, while Irish whiskey has largely sat idle for America’s cocktail renaissance, there are signs that, too, is changing, with the appearance of Irish whiskey-based punches and cocktails on trendsetting lists, like New York City’s Dead Rabbit Grocery and Grog, featuring drinks inspired by a place and time when Irish whiskey was the whiskey in America.
Investing in the Future
In anticipation of current and future demand, Pernod Ricard’s Irish Distillers are investing $127 million to expand the Midleton Distillery in County Cork, where they produce Jameson and other brands, effectively doubling capacity. “We are laying down 70,000 casks per year and the capacity on the pot still side will double as well, which I was really glad to see,” says O’Leary.
The pot still component for Jameson, made in single batches like single malt Scotch, is critical not just for Jameson, but also to supply the premium brand Redbreast, made with 100% pot still whiskey, as well as Powers Gold Label, a sleeper brand that is higher in pot still whiskey than standard Jameson. Unlike the heavily advertised Jameson, these other Irish entrants from are soaring in popularity by word of mouth alone.
Tullamore DEW, the second largest global Irish whiskey brand after Jameson, is also investing for the future, in an effort to satisfy the brand’s double-digit growth in the U.S. since William Grant & Sons took over the brand in 2010. In addition to a newly constructed visitors center, a new facility will come online in 2014 at a cost of nearly $45 million.
The new distillery will ensure supply of Tullamore DEW Original, with its unique triple-blend of malt, grain and pot still whiskey, while offering the freedom to create and diversify, according to Ken Reilly, category marketing director. “Irish whiskey is a dynamic category with new styles emerging, honey for example, and older styles resurrected, like peating and pure pot still,” says Reilly.
Some of the most innovative products to broaden the spectrum of Irish whiskey hail from the Cooley Distillery, founded in 1987 to produce the Kilbeggan, Connemara, Tyrconnell and Greenore brands, and acquired by Beam Global in late 2011. According to Bob Gorman, director of marketing for world whiskies at Beam, the acquisition not only gave Beam a controlling interest in 50% of Irish distilleries (Cooley started operation of a second distillery in the town of Kilbeggan to contribute to the whiskey of the same name in 2007), but also filled a “glaring omission” in their whiskey portfolio—a premium Irish whiskey able to stand should-to-shoulder with Maker’s Mark and Laphroaig. Beam has also imported five brand ambassadors from Ireland to canvas key U.S. markets.
“The whole premise of why Cooley was set up is to revive the traditions of Irish whiskey that were lost when it became a monopoly,” says Stephen Teeling, senior global marketing manager for Irish whiskey at Beam, who very much embodies the passion of his father, the creator of Cooley. “We were the first to offer cask-strength, port and sherry finishes with Tyrconnell, peat-smoked whiskey. We’ve spend over 20 years building that story, talking with pride about Irish whiskey.”
Beam’s Irish flagship, Kilbeggan, is retails around $24, just a few dollars above category leader Jameson. “Jameson did a great job of recruiting and we have these younger consumers coming to Irish whiskey, especially in shots. Where we see a big opportunity is with those who want to step up to a more premium pour,” says Teeling.
While Kilbeggan trades heavily on heritage, Beam’s newly acquired 2 Gingers, also crafted at Cooley, offers a more casual approach, with its whimsical name and modern packaging. Launched in Minnesota by restaurateur Kieran Folliard, 2 Gingers owes much of its success to a trademarked drink, Big Ginger, comprised of 2 Gingers Irish Whiskey, ginger ale and a lemon and lime wedge.
Cooley Distillery is also responsible for Sidney Frank Importing Company’s, Michael Collins brand, which includes a double-distilled blended Irish whiskey and 10 Year Old Single Malt, distinguished by its use of peated barley. According to Kate Laufer, director public relations at Sidney Frank, the blend attracts mainstream Irish whiskey drinkers as well as bourbon lovers, a fertile ground considering that Irish whiskey sales still pale in comparison to bourbon’s 16 million cases. Cocktails have also been key, as promoted in advertising and on the website.
Like Michael Collins 10, Knappogue Castle 12 Year Old, from Castle Brands Inc., points to the increasing importance of age statements, especially in winning consumers of high-end Scotch, where age statements are a defining measure of quality. Knappogue ceased making the annual vintage whiskies that emerged in the early ’90s in favor of a flagship 12 Year Old, while leaving room for special editions true to the brand’s super-premium positioning. The newest is Knappogue Castle Twin Wood 14 Year Old Single Malt, bottled at 92 proof, following aging in both bourbon and Oloroso Sherry casks.
Perhaps the surest sign that the Irish whiskey category is far from peaking: Concannon Irish Whiskey was enthusiastically embraced by both on- and off-premise accounts during the 2012 launch, says James Parker, VP of sales for The Wine Group Spirits, which markets the brand. Concannon may be a new name but also embodies four generations of family heritage. Park expects sales to double in 2013.
With a passion for the past and optimism for the future, the last thing these Irish producers require is luck. New expressions are growing the category both up and out, exciting sophisticated whiskey lovers with single malts and specialty finishes that challenge Scotch malt whisky, while soft, sweet, drinkable blended Irish whiskies appeal to converts from vodka, beer and bourbon.
In addition to quality, however, Irish whiskey may have one thing going for it above all else—just being Irish. Says O’Leary: “I’m Irish, and like a lot of Irish-Americans, that makes these whiskies an important part of my heritage and a matter or personal pride.”
Don’t Forget the Creams…
Whiskey is not everyone’s cup of tea—which is one reason why Irish cream liqueurs have proven popular since being introduced in the 1970s. While still dominated by Baileys, the market’s ability to absorb other brands and variations is proof that it’s important for stores and bars to offer these as well.
Distinctions among Irish Creams—which are essentially 34-proof, shelf-stable blends of whiskey, cream, sugar and sometimes additional flavorings—are not as critical as with the whiskeys. For sweet-toothed drinkers, these smooth liqueurs are delicious on the rocks or in coffee.
Reliable brands include Carolans, Duggan’s, McCormick’s, Molly’s and Saint Brendan’s. To make a selection of Irish Creams stand out, consider adding flavor variations (Baileys recently added hazelnut to its range that includes caramel, coffee and mint chocolate). And a basket of minis by the register are sure to disappear come mid-March.
Irish Whiskey Playbook
As the popularity and diversity of Irish whiskey continue to grow, here are some top picks, with points of distinction to help make the right recommendation.
TOP SHOTS AND CLASSIC POURS
Pernod Ricard USA; $22
Triple-distilled and renowned for smoothness, the Irish category leader is the go-to pour for shots and everyday enjoyment, earning the youth vote for its unmatched name recognition.
TULLAMORE DEW ORIGINAL
William Grant & Sons; $21
The second largest Irish whiskey in the world, Tullamore D.E.W. is triple distilled, and uses all three types of Irish whiskeys; the pot still, malt and grain whiskies.
BUSHMILLS BLACK BUSH
Matured for up to seven years in a combination of sherry casks and bourbon barrels, a generous 80% malt whiskey makes this premium blend a top shelf classic.
BOURBON LOVERS’ FAVORITES
JAMESON SELECT RESERVE BLACK BARREL
Pernod Ricard USA.; $32
A high proportion of pot still whiskey with small-batch grain whiskey, demand is soaring for this newcomer aged in bourbon barrels and sherry casks. Like bourbon, this whiskey uses considerable corn.
GREENORE 8 YEAR OLD SINGLE GRAIN
Beam Inc.; $45
Smooth and mellow, this Irish whiskey is made predominantly from corn and aged for a minimum of eight years in ex-bourbon barrels, imparting the abundant oak and vanilla notes familiar to bourbon drinkers.
MICHAEL COLLINS BLENDED
Sidney Frank Importing Co.; $24
A smooth yet flavorful blend, this whiskey includes double-distilled malt whiskey aged four to 12 years in small bourbon-seasoned casks.
BUSHMILLS 21-YEAR OLD SINGLE MALT
This rare malt spends a minimum of 19 years in Oloroso sherry and bourbon casks, followed by two years in Madeira-infused casks, delivering dark chocolate and raisin notes.
Concannon Irish Whiskey; $25
Intrinsically connecting this whiskey to its namesake winery, barrels previously used for Petite Sirah are used for aging along with bourbon barrels; the makers call this “the Concannon effect,” imparting extra fruity notes.
CONNEMARA PEATED SINGLE MALT
Beam Inc.; $42
Double-distilled using peat-dried malted barley and aged in ex-bourbon barrels, this full and rounded whiskey, balancing fruit and smoke flavors, will win fans among discerning Scotch drinkers.
REDBREAST 15 YEAR OLD
Pernod Ricard USA; $74
Like all Redbreast, this exquisite whiskey is pure pot still, a rarity crafted with both malted and unmalted barley. In addition, it is aged in bourbon and sherry casks and non-chill filtered.
TYRCONNELL 10 YEAR OLD SHERRY CASK
Beam Inc.; $74
One of a collection of specialty finishes (the others being Madeira and Port), this rich and creamy single-malt layers grape and berry fruit over sweet vanilla, caramel and dried fruits.
Beam Inc.; $24
Double-distilled in the oldest operating pot stills at the world’s oldest licensed distillery, this relative newcomer combines real heritage and great taste.
Beam Inc.; $20
A four-years-aged blended Irish whiskey, 2 Gingers was inspired by the red-headed mother and aunt of founder Kieran Folliard, who is now looking to take its cult-like devotion national.
POWERS GOLD LABEL
Pernod Ricard USA; $22
With a substantial pot still component, this full-flavored Irish blend is a true classic and sleeper hit, now that savvy bartenders have discovered the difference in its long, honeyed finish.
BUSHMILLS IRISH HONEY
Ireland hops aboard the honey trend, a natural partner for sweet and gentle flavors of Irish whiskey. And one that may put Bushmills back on the lips of consumers.
William Grant & Sons; $25
This sweetened Irish spirit is not technically whiskey, but The Knot is a hearty 100 proof, embracing the high-proof trend among young male consumers and targeting shot glasses.