© The Financial Times Ltd 2013 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
September 8, 2013 6:17 pm
It was a favourite tipple of Queen Elizabeth I, who had casks of it delivered to her court in the 16th century. Dr Samuel Johnson was also a fan of its “pleasant and mild flavour”. Now, after 100 years of near terminal decline, Irish whiskey is making a comeback.
Exports of the spirit are surging in key markets, multinationals are investing in the main brands – Jameson, Bushmills and Tullamore Dew – and the number of distilleries is set to triple over the next five years. The resurgence of whiskey, known as uisce beatha (water of life) in Irish, is part of a wider growth in Irish food and drinks’ exports that is helping Dublin emerge from its financial crisis.
“Interest in Irish whiskey is huge, particularly in the US, Russia and eastern Europe. Forty of the 130 markets where we sell Jameson are seeing double or triple-digit sales growth,” said Peter Morehead, production director at Irish Distillers, which is owned by Pernod Ricard, and makes the top-selling Jameson brand.
Last week Irish Distillers cut the ribbon on a €200m expansion of its distillery in county Cork, which will double production capacity to about 16m nine-litre cases a year. Pernod Ricard said Jameson sales grew in value by 17 per cent in the year to the end of June, making it the second-largest brand contributor to its growth.
Scottish spirits group William Grant & Sons, which bought whiskey maker Tullamore Dew for €171m in 2010, is investing €35m in a new distillery. More than a dozen other Irish whiskey distilleries are either in construction or at the planning stage.
Overall Irish whiskey sales grew 10.5 per cent last year to 6.2m nine-litre cases, faster than all other types of brandies, Scotch, US whiskey, tequila and cognac. Sales of Irish whiskey have increased every year since 2008 when 4.4m cases were sold.
The surge in whiskey sales is being driven by changing consumer tastes in the US, where brown spirits have become more popular among younger drinkers. A similar trend is occurring in eastern Europe and Russia, where a growing number of spirit drinkers are graduating from vodka to whiskey and scotch, says Mr Morehead.
The main difference between Irish whiskey and Scotch is in the distillation process. Scotch is distilled twice while Irish is distilled three times, giving it a lighter and mellower flavour.
Irish whiskey has ditched its stuffy image and is attracting young female drinkers and a celebrity following. Pop diva Lady Gaga declared her love for Jameson at a show in Dublin and afterwards took a tour of the Old Jameson Distillery. Rihanna namechecked the same brand in her party track “Cheers (Drink to That)”.
In the 19th century Irish whiskey dominated the brown spirits market with more than 80 distilleries estimated to be operating in Ireland. But a combination of technological change, the loss of access to Commonwealth markets following Ireland’s independence from Britain and the prohibition era in the US devastated the industry, which was surpassed by Scotch whisky.
Last year 96m nine-litre cases of Scotch were sold and there were about 100 distilleries in Scotland. In comparison, the number of fully operational distilleries in Ireland last year was just three.
John Teeling, an Irish entrepreneur who sold his Cooley whiskey company to Beam for €95m, says whiskey sales are likely to grow strongly due to continuing demand in the US, eastern Europe and Asia – where sales are very low.
Last month Mr Teeling bought back into the whiskey market by acquiring a former Diageo brewery in Dundalk, which he plans to convert into a distillery with an investment of about €35m.
He joins a growing band of entrepreneurs entering the sector, which have announced plans to set up distilleries, including one at the notorious Crumlin Road jail in Belfast, which counted Gerry Adams and Ian Paisley among former inmates during “The Troubles”.
Oliver Hughes, who made his name establishing a craft brewery in Dublin in the 1990s, opened Ireland’s fourth whiskey distillery in Dingle late last year.
“Irish whiskey was in the doldrums for years and is coming from a low base,” he said. “But the future is bright with annual growth rates of 15-20 per cent likely for the foreseeable future.”
Copyright The Financial Times Limited 2013. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.