From The Land Where Whiskey Was Born

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IRISH WHISKIES AND LIQUEURS, LIKE EVERYTHING ELSE FROM THE EMERALD ISLE, ARE ENJOYING A DRAMATIC RESURGENCE.

BY BOB KEANE 0402im1

Ireland is a land of contrasts It is a place both ancient, with castles and thatched roofs, and modern, with satellite dishes and computer technology. That’s also the case with its two major spirits exports — Irish whiskey and Irish creams. The former traces its origins back to missionary monks who brought the art of distilling during Europe’s Dark Ages and the latter only to 1974 when Baileys Original Irish Cream made its debut. And like Ireland itself, which has been revitalized in the last few years, both types of spirits are on a roll.

Although Irish whiskey can claim a longer lineage than its peers from Scotland, Canada or the U.S., it remains the smallest of all whiskey categories. In fact, with a total volume of only 430,000 cases and less than 0.5% of all U.S. distilled spirits consumption, it remains far and away the smallest of spirits categories. Irish has a long way to go before it begins to approach the multi-million case volumes of the other whiskey categories, but year in and year out it has been achieving relative volume increases that are the envy of other whiskey marketers.

Irish is also somewhat unique in that many of the brands in the category come under the same marketing umbrella. Pernod Ricard USA can claim about 85% of all the Irish whiskey consumed in the U.S., due to the fact that in the 1980s its European parent acquired Irish Distillers and, as a result, most of the dominant Irish whiskey brands.

The category leader remains Jameson, which according to Suzanne Freedman, senior brand manager, Irish Whiskey, Pernod Ricard USA, has been growing at a rate of about 15% annually. Jameson18

Jameson, from Pernod Ricard USA, recently added this 18 Year Old to its line of Irish whiskies.

While marketers of Irish whiskey have talked for years about moving the category beyond St. Patrick’s Day and Irish coffee, it’s only in the last few years that it actually seems to be happening. A great deal of the credit is certainly due to the Jameson advertising strategy, which has stressed the fact that Jameson is a great spirit, not that it’s Irish. The brand has spent money on magazines and outdoor, and the company is going to continue supporting the brand in 2004.

“We put every last nickel into advertising the brand,” said Freedman. “We’re putting almost $4 million into advertising this year on a new ad campaign” that will reach beyond the print pages. We’re going to be on the radio, on the Internet, and obviously outdoor advertising, which is a big part of our marketing mix for the brand.

“So we feel that awareness is a big issue for Jameson and we’re spending as much money on awareness as possible. Recruiting new consumers into the brand is also key to growth, so we are investing quite a bit of money in event marketing.” This effort will include a concert series taking place in many of the brand’s major markets.

Jameson may be the most visible brand of Irish whiskey, but it’s far from the only brand on the move upward.

Bushmills, which claims more than a quarter of category sales is number two in volume with 115,000 cases. “We took over the brand in 2001,” said Freeman, explaining that due to the complexities of the transition, that year was not particularly strong for Bushmills. “In 2002 the brand showed a 4% increase and 2003 we’re looking at 4% to 5% as well. It’s one of the priority brands within the Pernod Ricard portfolio. One thing we’ve discovered about Bushmills is that people who drink the brand love it. There’s a high level of loyalty with Bushmills, there just aren’t enough people drinking it right now. We’re trying to cultivate the people that are drinking it and bring people into the brand more on a grassroots level.” Tullamore

Though small in overall sales volume, Allied Domecq’s Tullamore Dew has been growing rapidly.

The other Irish whiskies in the Pernod Ricard portfolio (Powers, Redbreast, Midleton) have much smaller volumes and rely on the overall increase in interest in Irish whiskey as a starting point. “Because we import and sell 85% of the brands in the category,” said Freedman, “we leverage that by putting together display materials that feature all the brands in our portfolio for the retailers.” For St. Patrick’s Day a “quadrama” pole topper will be available, “essentially a three-dimensional piece with eight different panels that feature all the brands. Other pieces designed to take advantage of the March 17th holiday include framed posters featuring the distilleries of Ireland and the whiskies of Ireland.

Pernod Ricard’s excitement about what’s going on in the Irish whiskey category is shared by other marketers as well. “There’s this exciting discovery of what the Irish whiskey category is really all about,” said Mark Marcon, brand manager for Tullamore Dew and other Irish products in the Allied Domecq portfolio. “It’s still fairly small but it’s growing like wildfire.

“I think bourbon, with its small batch bourbons, really started the rediscovery of whiskey by the American consumer. Now, they’re intensely curious about different whiskies, and your former bourbon aficionado or Canadian aficionado or Scotch aficionado is now a whiskey aficionado,” Marcon continued. “You’ve got people who have a repertoire of drinks. They have their favorite in the Canadian category and their favorite in the Scotch category and now they’ve added Irish whiskey to that repertoire. They’ve discovered that it has a very pleasing and unique taste and that it’s very smooth.”

SUPERPREMIUMS

In recent years, as overall whiskey consumption has declined, suppliers, in all categories have introduced a range of superpremium and occasionally rather esoteric bottlings. But as Pernod-Ricard’s Freedman noted, that the product’s attributes have to be readily apparent to the consumer.

“Jameson had an offering in the line called Jameson 1780,” she explained. “That was the 12 Year Old offering and the product was fantastic, but what we realized was that people had a difficult time remembering 1780. It just didn’t roll off the tongue. So we renamed it the Jameson 12 Year Old and we repackaged it. And now the consumers can understand it and they know exactly what it is. It’s the same liquid, but we recognized that when you’re on a shelf in a retail store you can’t expect the salesman to sell it for us so we need to make sure that our communications are clear.”

Another high-end offering in the line is Jameson Gold. Unfortunately, according to Freedman, that product never really caught on, not because it wasn’t a great whiskey, but because people didn’t understand what it was. “So what we did was make a decision corporately to just make that a duty-free item.”

Instead of Jameson Gold, retail outlets are now being offered the Jameson 18 Year Old Master Selection. The product is described as “an artful blend of whiskeys aged principally in Spanish Oloroso sherry casks for 18 to 23 years,” and then finished in bourbon barrels. “We are sensitive to the fact that there’s limited shelf space and rather than have the Gold and the 18 Year Old out there, we’ve shifted our emphasis,” said Freedman.

The Jameson offerings aren’t the only superpremium Irish whiskies in the Pernod Ricard portfolio. Bushmills offers probably the most extensive selection in the category with Black Bush, a 10-year-old single malt, a 16-year-old single malt with a three wood finishes (American bourbon oak barrels, Spanish Oloroso sherry butts and large old port wine pipes) and its latest offering, a 21-year-old single malt aged in used bourbon and sherry casks and finished in Madeira drums. This latest product was introduced in October and retails for $100 (750 ml).

“A lot of retailers get excited about the higher-end products,” noted Freedman. “It helps us to build relationships with them, and it helps us to sell the standard blends.”

Kilbeggan 750 ml new label Tyrconnell 750ml

Heaven Hill Distilleries offers Kilbeggan and The Tyrconnell Single Malt Irish Whiskey.

The most exclusive of the Bushmills offerings are single casks. “We offered a handful of retailers within the U.S. the opportunity to buy a full barrel of whiskey,”explained Freedman. “We had bourbon, sherry and rum casks available, each 14 years old. There were three of each. Sam’s in Chicago bought one of each, Binny’s in Chicago bought one of each and Young’s Market in California bought one of each, which they are selling to a small number of high-end retailers.

“They’re wildly expensive. Each cask yields about 20 cases, and we sent our master distiller over to do tastings and dinners. It’s a great way of communicating to the trade and consumers. And the whiskey’s really good.”

Susan Wahl, Heaven Hill’s brand manager for Kilbeggan and Tyrconnell Irish Whiskeys, agrees that such offerings help suppliers and retailers move Irish whiskey away from just St. Patrick’s Day and other traditional Irish settings and more into the mainstream. Using the single malt Tyrconnell as an example, she noted that the groundwork done by Scotch and bourbon producers with their single malt and small batch products helps brands like Tyrconnell, an Irish single malt, because consumers are already familiar with the proposition. “And here we have a product with a point of difference and cachet,” she said.

Wahl’s point is echoed by Allied Domecq’s Marcon. “As the whiskey aficionado starts to get more sophisticated they’re looking for the different sensations on their palate,” he noted, using Tullamore Dew’s 12 Year Old, as an example. “They’ve come to appreciate this product. I don’t think it’s so much the industry as it is the consumer that’s driving it.”

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