Retailers are sharing a pot of the green from Irish beverage sales, especially the fast-rising whiskey category.
Though Ireland’s banks may have fallen on hard time, the luck of the Irish continues when it comes to that Emerald Isle’s whiskies, cordials and ales. Indeed, the Irish whiskey category is the proverbial pot of gold; U.S. sales have been growing in the double digits for years now and show no signs of abating. The reasons for this popularity are several, including the spirit’s natural approachability and relative affordability, new expressions expanding its range and appeal, the whiskey’s ancient heritage, and its, well, ‘Irishness’ ‘ the convivial connotations attending the entire Irish drinks category.
‘Irish whiskies are getting a cult-like following,’ reported Patti Robinson, owner of Heritage Wine & Liquor in Centennial, CO. The products are moving more than they did two years ago, she noted. ‘Customers are very curious about Irish spirits.’
Pot of Gold?
Among the spirits categories, Irish whiskey was the best performer, percentage-wise, in the U.S. market in 2009 [the last full year for which there are complete statistics available] with an increase of 13.0%. Pernod Ricard’s Jameson Irish Whiskey continues to be the category’s leading brand, according to Beverage Information Group (BIG), gaining 19.2%, to 815,000 9-liter cases in 2009. Indeed, its sales comprise almost 70% of all Irish whiskey sold in the U.S. Powers Irish Whiskey, another Pernod Ricard brand, is No. 4 among leading brands according to BIG; sales were up 6.7%.
‘The category has fared very well and continues to be the fastest-growing one. Jameson has accelerated growth and become the fastest-growing premium spirits brand,’ according to Wayne Hartunian, vice president of Whiskies & Cognac for Pernod Ricard USA. He notes that the Jameson brand has nearly doubled in size over the past three years. ‘Growth is very strong in both the on- and the off-premise, and much of it is organic growth versus price promotion.’
The venerable Bushmills, from Diageo, is the second best-selling irish whiskey in the U.S., with sales volume of 169,000 9-liter cases (BIG), while its brother brand, Black Bush, ranks sixth in U.S. sales in the category.
‘The Irish whiskey segment is definitely growing ahead of other whiskies,’ agreed Yvonne Briese, marketing director at Diageo for North American Whisky and Irish. ‘The category has been growing for five years, which we’ve been keenly aware of.’
Other major players in the category include number-three ranked Tullamore Dew, whose sales were up 8.1% (BIG), and Kilbeggan, owned by Sazerac, which ranks fifth among the leading brands.
Other Irish Exports Prosper
Irish eyes are smiling not just on whiskies, but on Irish creams and other cordials and Irish beer brands as well.
Speaking of the just-concluded festive season, retailer Robinson noted, ‘During the holidays, cream liqueurs are a huge category for us.’ Baileys, she added, is one of the store’s top-selling liqueurs.
‘We don’t have data for 2010 yet, but I think it’s been a better year than 2009 for the industry as a whole, for the category and especially for Baileys Irish Cream,’ said Bill Topf, vice president, marketing, for Diageo Liqueurs and Gins. Baileys is clearly the leader in the cream category, says the VP. ‘And we expect good things moving forward.’
Winchester Wine & Spirits in Winchester, MA, carries an array of Irish whiskies as well as a number of Irish cream liqueurs. ‘They all sell well,’ said staff member Justin Giuliano.
Another major player in the Irish cream category, Carolans, had another positive year, according to brand manager Paul Caffrey of Skyy Spirits. ‘As the number-two Irish cream in the world, Carolans delivers a unique combination of true premium quality at a very affordable price.’
Other players in the Irish creams category include Saint Brendan’s Irish Cream, owned by Luxco, and named for a Sixth Century monk; and Heaven Hill’s entrant O’Mara’s Irish Cream, which released Chocolate and Caramel versions in 2009.
As for Irish beer and ale, that segment is doing well, judging by category leader Guinness. ‘We came off a good year last year, celebrating our 200th anniversary, and this year, during our core selling season, St. Patrick’s Day, we had strong growth,’ said Guinness brand director Patrick Hughes.
Aside from solid growth, there is other news from the Irish drinks category: an acquisition, re-packaging and new entrants.
A notable development is William Grant & Sons’ acquisition of the Tullamore Dew Irish Whiskey brand, effective January, 2011. ‘Whiskey is part of William Grant’s foundation; the company was built on Glenfiddich Scotch Whisky,’ said category marketing director Ken Reilly, explaining some of the reasoning behind the acquisition. ‘We have a bourbon in our portfolio as well. What was missing was a premium Irish whiskey. Tullamore Dew is the second largest premium Irish whiskey in the world, a strong contender globally.’
At presstime, William Grant was still developing its marketing plan for the brand. ‘The challenge for Tullamore Dew is trial and awareness,’ noted Reilly. ‘We’re looking to accelerate that in 2011. One of the things we’re going to focus on at the retail level is the visibility of the brand and the correct shelving so that consumers can find Tullamore Dew quickly.’ A redesign of the label is in the works for 2011 as well.
William Grant also plans to place more emphasis on telling the brand’s back story, and communicating its heritage to consumers. ‘For example, the Dew stands for Daniel E. Williams, who was the architect of the brand, and there are parallels to William Grant’s story,’ pointed out Reilly.
For its part, Pernod Ricard added to its stellar lineup of Irish whiskies with the summer launch of Redbreast 15 Year Old, which joined the already successful Redbreast 12 Year Old in the U.S. market. The high-end 15 Year Old whiskey is distilled from malted and unmalted barley in copper pot stills and matured for a minimum of 15 years in Sherry casks and bourbon barrels; it’s bottled at a higher 46% alcohol.
A relatively new entrant to the category is Kellan Irish Whiskey, another smaller brand produced at the independent Cooley Distillery. Kellan is a blend of malt and grain Irish whiskey, double distilled and aged over four years in American oak bourbon barrels. One of the marketing thrusts is its mixability. To that end, the whiskey is packaged with a logoed cocktail shaker with proprietary recipes for drinks like the ‘Shamrocked Kellan’ and the ‘Irish Trinity.’
Michael Collins Irish Whiskey, also from the Cooley Distillery, has just released a new 10 Year Old Single Malt, as well as new packaging for line, which also includes a blend. Imported by Sidney Frank Importing, the single malt is double-distilled in long-necked copper stills, from both malted barley and peated malted barley, and then matured in small bourbon seasoned casks for a minimum of 10 years. A 750 ml bottle has a suggested retail of $39.99; the blend retails for $26.99-$28.99. They are available beginning this month nationwide.
In the liqueur category, Irish Mist successfully launched a new packaging format late last year, and the Skyy Spirits brand has seen a significant resurgence in the past nine months as a result, said brand manager Caffrey. ‘We know that current consumers of Irish Mist are fiercely loyal to the brand, and while we appreciate this loyalty, we recognize that we need to introduce new, younger consumers to the delicious sweet taste of Irish Mist,’ he explained.
On the beer front, Guinness made news late last year when the Irish brewery re-introduced to the U.S. market, after nearly a century’s hiatus, Foreign Export Stout. [See sidebar for full story.]
What’s Driving Growth?
Irish whiskey goes down easy for novices to brown goods; it also appeals to whiskey geeks, especially in the higher expressions; and best of all, comparatively speaking, the price is right. Especially when Irish is shelved with Scotch, bourbon and other whiskies, there is crossover trial.
‘Irish whiskies are very approachable liquids, smoother, lighter-tasting,’ opined Diageo’s Briese. ‘For a non-whiskey drinker, it’s an easy to try, easy to adopt liquid, which frankly is what we think is happening. There has been a high degree of trial of Irish whiskey brands over the last several years.’
‘Due to its taste profile, [Irish whiskey] is more approachable,’ echoed Hartunian at Pernod Ricard, ‘and has a strong image of being cool.’ He sees trending towards increased shelf space for the category and stocking of additional skus.
‘Compared to equivalent-quality bourbons and single malt Scotches, Irish whiskies are priced much more reasonably,’ noted retailer Giuliano at Winchester Wine & Spirits. ‘We do best with the higher-end, the more prestigious labels.’ Winchester shelves by type: all the Irish whiskies are grouped in the store’s whiskey section. Over the past year or so, the retailer has given more shelf space to the category and stocks various expressions from Jameson, Bushmills and Tullamore Dew, as well as selections from Michael Collins, Redbreast and Knappogue Castle, among others.
More On The Shelf
‘Irish whiskey has seen a number of new entries in the higher variants, like single malt and single pot still whiskies,’ observed Reilly at William Grant. ‘This is expanding the category’s shelf presence in liquor stores and engaging more consumers.’ Reilly reports that in many retail situations, Irish whiskey is shelved between Scotch and bourbon. ‘I think that’s a good thing because bourbon is obviously a destination segment within whiskey right now for a lot of retailers, and Scotch has got a lot of pulling power as well.’
‘We believe there is a lot of trial coming from other whiskey drinkers as well as non-whiskey drinkers,’ echoed Diageo’s Briese,. She also believes that the single malts, a relatively rare style among Irish whiskies, has crossover appeal to Scotch whisky drinkers.
‘Just as customers who have been moving up from blended Scotch to single malts, people are trying the Irish whiskies,’ said Tony Russo, president of Aries Wine & Spirits in White Plains, N.Y. ‘More connoisseurs are buying the better bottles; people are trading up.’ The retailer reports more interest in specialty products across the board in spirits these days.
Producers have responded by adding more products at the higher end of their range. Jameson offers a number of reserve expressions, including Special Reserve 12 Year Old, Signature Reserve and Limited Reserve 18 Year Old. For its part, Bushmills produces Black Bush and three malts in 10, 16 and 21 year old variants. In its portfolio, Tullamore Dew has a 10 Year Old Reserve, a 12 Year Old Special Reserve and a 10 Year Old Single Malt.
Mixing It Up At Home
‘Lately, people are more willing to experiment,’ said Robinson at Heritage. ‘The customer who might buy a single batch bourbon or single malt Scotch is the same one sampling Irish whiskey.’ The retailer also believes that most of this experimentation is occurring at home. ‘It’s still more economical to bring your own bottle home than to drink in a bar,’ she said.
‘Baileys plays well at home in that consumers don’t have to do much to make a drink with it,’ said Diageo’s Topf. He added that in some respects Baileys Irish Cream is ‘premixed’ and ready to serve, perfect for home use. Besides the Original, Baileys also comes in Mint Chocolate, Creme Caramel and Coffee. ‘It’s also a great ingredient in a number of drinks,’ he said, with recipes detailed on the website and Facebook pages.
Hartunian sees a trend toward growing mixability with Irish Whiskies, such as Jameson & Ginger Ale. But he also cites a ‘Pickle Back’ drink trend specifically with Jameson that surfaced about six months ago and is growing in several major cities in the U.S. ‘It is a shot of Jameson followed by a shot of pickle juice ‘ sounds polarizing – but it is actually very good and is developing a following of very passionate bartenders and consumers,’ he said. ‘The growth of this phenomenon has been totally organic/word of mouth, which is one of the key reasons why it is so successful.’
Merchandising and Promotions
Most Irish brands with any significant marketing budgets create promotions for St. Patrick’s Day. In the case of Diageo, for example, the company has created co-branded programs across Irish spirits and beer for that most Irish of holidays.
Jameson, of course, features year-long marketing and merchandising programs, and it plans strong increases with innovative and impactful marketing initiatives, according to Hartunian at Pernod Ricard. The ‘Taste Above All Else’ campaign aims to engage consumers with the legends of founder John Jameson. That includes more frequent and larger displays throughout the year. ‘Irish whiskey delivers significant volume lifts on display,’ he noted. In addition, four Jameson brand ambassadors from Ireland are educating consumers, retailers and on-premise staffers about the whiskey.
Since fall, Bushmills commenced a campaign with the tagline, ‘Bushmills Since Way Back, Shared Among Friends Since 1608,’ which includes traditional advertising, contests and PR. The campaign highlights the lives and brotherly relationships of artists and influencers, including Chromeo and Kai Regan, among others. For the 2011 St. Patrick’s Day, the company is looking for ways to make the marketing program broader than that one day in March, by tying into the basketball season.
Baileys also launched a new campaign this past fall, with the tagline ‘Baileys & friends, Let’s do this again.’ Ads showing groups of friends enjoying good times; Baileys debuted the program on TV, and in print, digital and outdoor media. ‘It’s front and center in retail stores,’ said Topf. Another promotion during the recent holidays was the ‘Baileys Brings You Home Contest.’ Consumers posted stories or videos on Facebook about their great times with Baileys. Each week 25 winners received a $500 for a ticket home for the holidays. In conjunction with the contest, Baileys donated to the Hero Miles, a not-for-profit organization that provides free airline tickets for military service personnel and their families.. Details were communicated in stores via tear pads and callouts on POS and case cards.
Skyy Spirits conducted national sampling tours for both its Irish Mist and Carolans brands last year. Over 50,000 consumers, tasted Irish Mist in the ‘Meet The Misties’ tour. Irish Mist and Carolans will receive substantial marketing support in 2011, including an array of new POS materials, sampling programs and consumer events, according to Caffrey. An as-yet-undisclosed campaign will also launch this year, aimed at helping Irish Mist reach a brand new set of younger consumers.
The Year Ahead
The general feeling in the industry is upbeat, especially in the Irish whiskey category, which seems to have weathered the economy well.
‘We’re cautiously optimistic about 2011, about spirits in general and about Irish whiskey and Bushmills in particular, said Briese. ‘Indicators are showing a slight change of the tide.’
‘We’re seeing signs that things are slowly getting better,’ said Topf. ‘People are moving toward premium products, and volumes are growing. Consumers are not just shopping for bargains; there is a value-equation at every price point.’
The big news in the Irish beer category is Guinness’ relaunch of Foreign Export Stout in the U.S. market, after a 90-year exile. The ale arrived on these shores last September.
‘Consumers have been asking us to bring Foreign Export Stout to the U.S. There was great pent up demand,’ says Guinness brand director Patrick Hughes about the new arrival. ‘We had this great gem in our portfolio, a brand with a long, rich history. We thought it was time to bring Foreign Export Stout back.’
In this country, Guinness is best known for its Irish Stout Draught, which is nitrogenated for a velvety texture and creamy head. But globally, Foreign Export Stout (FES) accounts for 45% of Guinness’ sales.
First known as West India Porter, FES dates back to 1801, and was exported to the U.S. beginning in 1817. Exportation here was discontinued in 1920 due to Prohibition. Much like India Pale Ales, FES is heavily hopped with a relatively high ABV of 7.5% to preserve the ale against the rigors of shipping voyages. FES is intensely hoppy with strong roasted notes and a full body.
‘FES fits in with current consumer trends, a shift towards big and flavorful brands,’ notes Hughes. ‘American consumers today are looking for different beer experiences and flavors.’
‘Foreign Export Stout is an interesting beer,’ says Justin Giuliano, craft beer manager for Winchester Wine & Spirits in Winchester, Mass. ‘You don’t have to be a Guinness drinker to enjoy it, FES is definitely appealing to the micro-brew crowd.’
Giuliano attended one of the many launch parties around the country staged by Guinness to introduce retailers to the product. Beer dinners are also planned.
Print advertising in the market is introducing FES to American consumers. For retailers, point of purchase materials are designed to educate customers about FES’ origins and flavor profile. That includes shelf talkers, window decals and some sampling events, says Hughes. FES will be Guinness’ major focus for 2011 in the U.S. market.
Besides FES and Draught, the Guinness family also includes Guinness Extra Stout. Also in the Diageo portfolio is Smithwick’s, an Irish red ale, celebrating its 300th anniversary, and Harp, a pale Irish lager. Still under wraps is Black Lager, a new product in test in a few markets as yet.
The other major players in the Irish ale market are Murphy’s Stout, owned by Dutch brewing giant Heineken, and Beamish Irish Stout, acquired by Heineken in its acquisition of Scottish & Newcastle a few years ago. Also available across the U.S. are O’Hara’s Irish Stout and O’Hara’s Irish Red, from Colorado-based Distinguished Brands International.