Whiskey is Irish
Irish whiskey was once the highest selling spirit in the entire world, outselling vodka and gin by large volumes! It was close to 70% of all global whiskey sales! Today it only represents 4%. What happened?
Several factors contributed to the decline. Irish distilleries did not want to adopt new technology such as the Column still. This was a far more efficient way to make whiskey, but the Irish slammed it as “not real whiskey” and called its product, the “silent spirit”. The Scots, however, had no such qualms and started to produce a more cost-effective and lighter tasting, blended whiskey.
Then, the Irish famine hit, where Ireland lost nearly 50% of its population. The Irish War of Independence caused a trade war which resulted in Great Britain placing an embargo on Ireland’s exports to Commonwealth countries (Ireland’s biggest trading partner).
Around the same time, America (Ireland’s second-biggest trading partner) enforced prohibition. This decimated the already vulnerable Irish whiskey’s market. Americans could no longer buy it and sales to Commonwealth countries were blocked. Sales fell by 99%! This rapid decline, coupled with the trading embargo to commonwealth countries, paved the way for Scotland, a much smaller whiskey producing country, to dominate the market. Distillery count in Ireland fell from hundreds to a mere four (Jameson’s, Powers, Cork Distillers and Bushmills). Jameson and Powers merged with Cork Distillers to form Irish Distillers in 1966. Later, in 1972, Bushmills joined in, giving Irish Distillers total control of all whiskey produced in Ireland (both in the Republic of Ireland and Northern Ireland). Had this necessary “joining of forces” not taken place, Irish whiskey would very likely have all but disappeared.
A Monopoly Ended
Irish Distillers enjoyed this monopoly on whiskey for nearly 30 years until Cooley Distillery in Dundalk started. This was the first independent distillery to open in Ireland, and take on Irish Distillers’ monopoly for nearly 70 years!
There are four forces driving the whiskey market growth:
1. More young drinkers are opting for brown spirits. Whiskey is cool again!
2. Emerging middle classes around the world create a bigger market.
3. The opening of Eastern Europe and Russia is potentially a huge market.
4. Heavy investment into the production and global marketing of Irish whiskey by giants such as Pernod Ricard and the Irish Whiskey Association.
Recently, a prominent sports star successfully released his own brand of Irish whiskey. Others followed suit, aggressively buying up mature whiskey stocks. Aided by social media, this has become a trend, which has created a buying frenzy.
Irish Market Set To Double
Irish whiskey sales are expected to hit 12-14 million cases by 2020. This kind of demand, considering the available supply, forces prices to rise, similar to the Japanese market. Today, Japanese whiskey sells for €100 a bottle, compared to Scotch and American whiskey selling at €20, and Irish whiskey, which sells at €40. Even more compelling, is how Japanese law allows purchasing of Irish or Scotch whiskey to blend in with Japanese whiskey, while the Irish cannot buy from Scotland, America or Japan to help meet their demand, as Irish law only allows whiskey made in Ireland to be sold as such.
For the Irish whiskey market to keep up with predicted demand, experts say that they must have 900 million LPA (Litres of Pure Alcohol) in reserve. Even with all its distilleries producing at full capacity, Ireland will struggle to produce 120 million LPA. Currently, they are producing nowhere near this amount.
The future looks very bright. Experts predict Irish whiskey will become the most valuable of all whiskeys. The first bottle of a 3-year-old Dublin whiskey sold for $10,000 at auction in September 2018.
“The potential [growth] is massive when we compare Ireland to Scotland — with over 130 Scottish distilleries in operation,” says Irish Whiskey Association Chief Executive Miriam Mooney. Export sales for Irish whiskey will double by 2020 and double again by 2030, the organisation predicts.