The Irish whiskey industry has witnessed phenomenal growth in the past decade going from sales of under five million cases in 2010 to 12 million cases in January this year – a 140% growth (or a Category Annual Growth Rate of 9.1%).
During this time the number of operational distilleries has risen from four to 38.
Directly employing some 1,640 people pre-Covid-19, our whiskey industry has invested €1.55 billion in the all-island economy during these years while the aggregate value of Irish whiskey exports from the Island of Ireland to over 140 markets reached €890 million in 2019, €827 million of it from RoI (up from €196 million in 2010).
The report, Irish Whiskey 2010-2020: The restoration of the Irish whiskey industry across our shared island, was launched by the Minister for Finance Paschal Donohoe TD, who said, “The performance of the Irish whiskey industry over the last decade charts an extraordinary path of success. From the growth in the number of distilleries, which has done so much to ignite, or in many cases re-ignite, a passion for Irish whiskey, to the value of investment across the island and in local communities which has brought new jobs to many of our regions, this sector reflects, to a large degree, the journey we have been on as a country over the past 10 years. This year, however, has presented more than its fair share of challenges, with very few sectors spared. I have no doubt though that the future remains exceptionally bright for Irish whiskey, which is revered and enjoyed the world over and I wish the sector every success in building on this report and increasing the value of the sector further in decade ahead”.
The report shows that over the past decade the Irish whiskey industry delivered €770 million in excise on domestic sales to the Irish Exchequer. The industry also contributed €412,756 Gross Value Added per employee, the highest across the Irish food and drink sector.
Approximately 3.1 million cases of Irish whiskey – or 26% of all sales – were accounted for by brands produced on an all-island or cross-border basis.
Irish whiskey’s strength & resilience
This report demonstrates the strength and resilience of one of our island’s oldest industries, said the Head of Drinks Ireland|Irish Whiskey William Lavelle, speaking at the report’s launch, “Today is an opportunity to celebrate the revival and renaissance of the industry, its contribution to the island’s shared economy and the achievements of all those involved.”
Irish whiskey has been the world’s fastest-growing spirits category of the past decade, running well ahead of Japanese whiskey, US whiskey and agave-based spirits (ie tequila and mescal) with the US accounting for 51% of all Irish whiskey sales growth over this 10-year period.
The Irish whiskey industry currently produces well in excess of 20 times more product than demand on the Island of Ireland would justify.
At 5.0 million cases the US market for Irish whiskey has grown by 255.7% between 2010 (when sales stood at 1.4 million cases) and 2019. That’s a CAGR of 13.5% and according to Drinks Ireland|Irish Whiskey’s report, “It’s the firm assessment of our association that sales of Irish whiskey in the US can overtake sales of Scotch whisky over the course of the next decade, for the first time since before prohibition in the 1920s”.
Indeed the US remains by far the largest market for Irish whiskey accounting for 42% of all sales, up from 28% in 2010.
During this time Irish whiskey has emerged the most valuable Irish food and drink export to the US, accounting for 46.8% of the value of all Irish food and drinks exports in 2019.
Between them Jameson, Tullamore Dew and Bushmills account for over 85% of all whiskey sales and all whiskey growth, states the report.
While over 95% of Irish whiskeys are blends, “At the premium-and-above price level categories, Irish whiskey brands recorded 83% growth over the decade”.
For example between 2017 and 2019 total sales of premium Irish whiskey brands in Canada alone increased by 25%.
Here at home, Irish whiskey saw a steady 26% sales growth in all brands over the course of the decade notes the report, “However, sales of premium-and-above priced Irish whiskey jumped a massive 353% in the same period, with 83% of the growth being recorded since 2014”.
As more aged Irish whiskey comes on-stream and as the Irish whiskey industry continues to innovate and develop new premium products, Irish whiskey should become increasingly competitive in the premium-and-above price over the next decade.
Four distilleries to 38
The report also outlines how distillery developments have made a tangible and substantial contribution to local economic regeneration and to the social fabric of urban and rural communities throughout the island of Ireland.
Ireland’s 38 distilleries working in towns and villages throughout Ireland have created jobs, attracted visitors and resulted in the restoration of distilling to areas which once had rich traditions in whiskey production, pointed out William Lavelle.
Hundreds of millions of €uro have been invested in leading distilleries such Tullamore and Midleton while new distilleries such as Teeling Whiskey Distillery in Dublin 8 and The Shed Distillery in Drumshanbo, County Leitrim, have played a pivotal role in the regeneration of their respective communities, he said.
An assessment carried out by Drinks Ireland|Irish Whiskey indicates that over 100 million litres of pure alcohol was produced by Irish distilleries in 2019.
Today, it’s estimated that there are currently over 3.1 million casks in maturation on the Island of Ireland.
Opportunities and Challenges
Looking to the future the report assesses the opportunities and challenges for Irish whiskey in coming years.
“Irish whiskey can look forward knowing there are still many opportunities out there” stated William Lavelle, “from the potential that market diversification offers in terms of growth in Asia and Africa, to the opportunities on offer from the emergence of e-commerce as a major new sales channel for spirits.
“However, our industry also faces challenges, from the declining spring barley base in Ireland to the threats posed by protectionism and the divergence Brexit will bring to our all-island industry. Our industry has proven to be resilient and we will get through these.”
Resilience and recovery
David Stapleton, Drinks Ireland|Irish Whiskey Association’s outgoing Chairman said, “The report launched today gives us an opportunity to pause and reflect on how the industry has grown in just one short decade. But in doing so our gaze is firmly fixed on future horizons.
“2020 has been an extremely difficult year. However the Irish whiskey industry has proven itself to be resilient. After decades of decline, we’ve experienced a remarkable decade of recovery between 2010 and 2020. That recovery will continue. The industry is ready to bounce back in 2021 and march into the next decade with a focus on the continued growth of Irish whiskey sales.”
The industry-funded Association has seen its membership increase to 44 this year, representing over 95% of the production output of the industry and over 98% of global sales.