Irish whiskey remains red hot.
The category sold nearly 4.7 million 9-liter cases in the U.S. last year, according to DISCUS, which represents a 10% gain over 2017. Altogether that brought $1 billion in revenue for distillers — a 12% jump from the year prior.
This category has recovered from its past nadir in the early and mid 20th century. Once upon a time, Civil war, U.S. prohibition, British trade embargos and changing consumer tastes all took part in ravaging this industry. By 1966, only three Irish distilleries remained operational (Jameson, Powers and Cork Distilleries Company).
Beginning in the 1980s, the category gradually crawled back to life, before booming in current times. The number of Irish distilleries doubled between 2014-2016, and now totals nearly 30.
The category remains dominated by one brand. Jameson accounts for nearly 80% of Irish whiskey sales. Which means that many consumers are aware of Irish whiskey, but have not yet explored through it. For craft distillers, this can mean opportunity.
Altogether the category is poised for continued gains. A number of trends in Irish whiskey have helped lead this incredible resurgence.
1) The Innovation Explosion
As the craft boom expands people’s palates, and their willingness to explore, Irish whiskey has seen an unprecedented amount of innovation.
“If you asked us this question [about innovation] six years ago, it would be a simpler answer compiled of Sherry casks or perhaps some wine casks,” says Tony Carroll, global brand ambassador of Knappogue Castle Irish Whiskey. “But nowadays it’s become a lot more open-minded and experimental.”
“We now see Irish whiskey finished in Japanese Mizunara casks, Bordeaux /Pichon Baron Casks and Virgin Hungarian Oak, etcetera,” Carroll adds. “This of course leads to variety and curiosity for the consumer, which is a winning strategy for whiskey producers. It also allows the consumer to develop their whiskey palates and become a more confident, knowledgeable participant.”
Consumers have responded by reaching for bottles, even if the cask finish or production method is new to them. Experimentation has fueled sales.
“That’s really showing that consumers are driving this demand, because they want to leverage up on their taste profiles,” says Sabine Sheehan, global brand ambassador for Lambay Irish whiskey. “Consumers want to try something new.”
Lambay hails from CIL US Wines & Spirits, the American subsidiary of Camus Wines & Spirits. The brand enjoys access to Camus ex-Cognac French oak barrels, in which Lambay whiskeys finish.
“Mixing grape with grain is a complex process,” says Sheehan. “We’re the only Irish whiskey brand with a French master blender. That French expertise in finishing gives us our advantage.”
Irish whiskey itself has a natural advantage when it comes to the wide range of barrel finishes possible.
“Irish whiskey lends itself to being delicate and fruity, and as such works amazingly well in a huge range of barrel finishing,” explains Alex Thomas, master blender for the Irish single malt The Sexton.
The rising amount of innovation in Irish whiskey has also pushed up the price of some bottles. Consumers have not hesitated, however, to open their wallets for whiskeys that deliver quality.
“In the last 15 years, the quality of Irish whiskey products has increase exponentially,” says Dan Liguori, VP and GM at Mark Anthony Crafted Spirits. The company’s portfolio includes the premium Irish whiskey brand Glendalough. “That’s what the consumer is looking for now: quality. That’s elevated a category that was perhaps thought of as a commodity before, and now is premiumized.”
The Glendalough lineup includes their 13-year-old single malt finished in Japanese Mizunara casks, which retails for between $80-$100. The distillery also sources Irish wood for casks from the nearby Wicklow forest. “The authenticity and terroir we have in the Wicklow forest — it’s great to use sherry and Japanese Mizunara with Irish whiskey, but we do also have something innovative our own backyard,” explains Liguori.
Glendalough grew 50% last fiscal year in the U.S., Liguori adds. It’s brands like that which have helped alter consumer opinions about this category.
“We’re changing consumer attitudes away from Irish whiskey being a shot of Jamo with a beer,” says Sheehan of Lambay. “Though of course we’re thankful for Jameson for opening the mindset of bourbon consumers to try Irish whiskey. Once they’re here, these consumers then explore through our portfolio, because they recognize the opportunity for new flavors.”
“These consumers now have a little bit of extra money in their pockets, perhaps, and want the bragging rights that they have discovered the newest Irish whiskey,” Sheehan adds.
Where we see much of that experimentation, and openness to buying higher-end bottles, is with the younger LDA generation.
“Over the past five years alone, the volume of Irish whiskey sold in the U.S. has grown by over 60%, and Millennials are driving the majority of this growth, as they are increasingly willing to spend more on better quality alcohol,” says Thomas of The Sexton.
Owned by Proximo Spirits, The Sexton single malt Irish whiskey launched in 2017. To Thomas’ point, younger generations also enjoy learning more about what they’re drinking.
“The category also has over 400 years of history and storytelling, which fascinates those who want to learn more about the whiskey they enjoy and expand their knowledge,” she adds.
3) Irish Whiskey Mixology
So much of consumer education takes place on-premise. Bartenders have become gatekeepers in the craft age, and this has helped fuel the growth of Irish whiskey.
“Irish whiskey is now on almost every mixology menu,” says Sheehan of Lambay.
It helps that Irish whiskey as a style is a natural base spirit for mixologists to build upon.
“Irish whiskey being not overly boozy, and lighter with a citrus flavor, that has gained an acceptability from a cocktailing standpoint,” says Liguori of Glendalough. “It’s offering something more balanced, where the alcohol isn’t outshining other ingredients.”
“In cocktails Irish whiskey can offer balance, and acceptability of other ingredients,” he adds. “And that is really helping with the category’s resurgence. You’re seeing the Irish mule, the Irish Old Fashioned, the Irish highball.”
Sheehan agrees. “As a spirit, it has an approachable taste profile,” she says. “It’s know for its smoothness, its floral palate, and its mixability with other ingredients. It makes life easier for bartenders.”
Which, in turn, makes life easier for Irish whiskey.
“Irish whiskey is not a beer and a shot anymore,” says Liguori. “The key for Irish whiskey is to embrace mixology.”
4) Appealing Broadly
The smoothness and approachability of Irish whiskey also makes it less intimidating than other brown spirits. And that has expanded the consumer demo.
“We’re highlighting the subtle nuances and smoothness of our whiskeys,” explains Sheehan of Lambay, “as opposed to the burning of bourbon.”
“Irish whiskey isn’t as heavy or overbearing,” adds Liguori of Glendalough. “The lighter flavors make it more accessible to people’s palates.
Which positions Irish whiskey as a starting point for people newer to the overall world of brown spirits.
“We believe Knappogue and Irish whiskey as a whole is a lot more welcoming to the new 25-35 demographic, as it’s a much-less-aggressive taste profile than our cousins bourbon and Scotch, which sometimes can be a mouthful to get through,” says Carroll of Knappogue. “Irish whiskey is smooth and is also very appealing to a growing consumer in the whiskey category: females.”
Whiskeys from this category also tend to have comparatively lower ABVs, which ties into the consumer trend of drinking “healthier” alcohol.
“You look at what consumers gravitate towards now, products like White Claw hard seltzer and even 0% ABV beers,” says Liguori of Glendalough. “People are drinking higher quality, but lower ABV. That means lighter whiskey is more acceptable.”
5) Attracting Bourbon Drinkers
Which is not to say that Irish whiskey is too light to attract drinkers away from other brown-spirits. To the contrary, brands have reported cross-category purchasing from bourbon fans.
“The floral and sweetness of Irish whiskey crosses over for bourbon drinkers, as opposed to something more peated or rough like in Scotch,” says Sheehan of Lambay.
The general nature of bourbon consumers also makes them ripe for out-of-category experimentation.
“Appealing to the Scotch drinker is more challenging given the loyalty in that category is significant,” says Liguori of Glendalough. “We’ve had more success with bourbon drinkers because, right now, that category has a lot of consumers just discovering it, or who are midway through discovering it, which means they’re experimenting around.”
“There are so many entries into American whiskey right now that there’s a lot of infidelity,” Liguori adds. “Those drinkers are much more apt to try something different.”
There’s also the simple advantage of proximity.
“Irish whiskey at retail is typically merchandised closely to American whiskey,” says Liguori. “Their shelf stock is closer.”
6) Cheaper Price Point
While Irish whiskey has boomed globally, and achieved premiumization, its overall price point can still represent value when compared with other brown spirits.
Scotch prices are inflated by Scotland’s high export taxes. High-end single malts can become cost prohibitive for newer drinkers. As for bourbon, its explosive popularity has resulted in the supply not always meeting demand; just finding certain bottles has become difficult. And escalating prices on the secondary market have begun to creep into retail. Bourbon is no longer cheap.
Which is all to say that top bottles of Irish whiskey will usually cost less than their counterparts in Scotch or bourbon. And you can typically find these expressions more easily.
“Since it’s a great entry level category, you have a younger demographic that can start with a blend at a cheaper price point as introduction into the category, and work their way up to a premium pot still and single malts with more complexity and robust flavors,” says Carroll of Knappogue.
7) Single Pot Still Takes Off
As the Irish whiskey category expands, more distilleries are now offering single pot still expressions.
This whiskey style is made by a single distillery from a mixed mash of malted and unmalted barley, distilled in a pot still, explains Thomas of The Sexton. Somewhat similar to single malts, the style is defined by the inclusion of unmalted raw barley in the mash, in addition to malt.
“It’s proprietary,” explains Liguori of Glendalough. “Single pot still adds character that can be singular to the distillery.”
It’s also economical.
“I believe new distilleries have chosen to go down the path of single pot still due to the lower processing and distillation costs for the whiskey production,” she adds.
Will Irish Whiskey Face Oversaturation?
As Irish whiskey reaches heights last seen before Prohibition, and increasingly more distilleries open up, one can wonder: is there enough room in the market for all these producers? Or will Irish whiskey become oversaturated?
Producers do not believe so.
Rather, they see opportunity for greater growth.
“Ultra-premium is a huge market we could tap into,” says Sheehan of Lambay. “Matching supply to that demand is a huge undertaking, but we do have a lot of young distilleries now coming online.”
To meet demand for ultra-premium Irish expressions, Lambay has planned a series of single-cask, barrel-strength bottles, clocking in between 55-59% ABV. Each release will number around 350 bottles — the first launches later this year.
Part of what’s helping Irish whiskey now is how low the category fell in the 20th century. In other words, there’s lots of room still ahead to recover.
“You look globally, Irish whiskey is still only 5% of the whiskey market share, even though it’s been in double-digit growth the last five years,” Sheehan says. “There’s still plenty of room for growth for all of us.”
“As a brand ambassador I like to push all of whiskey,” she adds. “First I educate consumers about how Irish whiskey as a category has experienced immense survival, and has a long amazing and history. Then I talk about the brand. There’s plenty of room for everybody. Particularly in North America, where bourbon is massive.”
Or, where Canadian whiskey currently totals 22-23 million cases annually in the U.S. That’s five times the 4.7 million cases of Irish whiskey sold last year.
“I think there’s still a lot of room for growth,” says Liguori of Glendalough. “When you look at Irish whiskey in the U.S., it’s still a relatively small category. There’s still tremendous room for growth from a volume standpoint.”
“I don’t think the double digit-growth tide will ebb anytime soon,” he adds. “I anticipate more growth along that trajectory.”
Kyle Swartz is editor of Beverage Dynamics magazine. Reach him at firstname.lastname@example.org or on Twitter @kswartzz or Instagram @cheers_magazine. Read his recent piece 12 Interesting Products at WSWA 2019.