Spirits sector shows marked recovery in 2021
The Spirits Market Report 2021 showed that domestic spirits sales rebounded last year, up by 8% to 2.55 million 9-litre cases.
“These increases reverse the falls in sales in 2020 and move both domestic sales and exports ahead of their 2019 figures,” states the report.
The Spirits Market Report 2021 showed that domestic spirits sales rebounded last year, up by 8% to 2.55 million 9-litre cases, as hospitality venues reopened in the second half of the year.
Unlike other categories of alcohol, the spirits sector suffered less from Lockdowns due to its being less dependent on the on-trade – only 13.6% of spirits by volume is sold via hospitality – but industry figures point to visitor numbers to Irish Whiskey distilleries last year being down 87% on the 2019 pre-pandemic peak levels. However Irish spirits tourism is reportedly “bouncing back strongly” this year.
Irish spirits sales were responsible for 24.7% of the alcohol category in 2021, up 12.3% on the previous year’s share of 22%. Cider was the big loser, with a 2021 share of just 5.8%, down nearly 16% on its 2020 share of 6.9%.
Irish Whiskey, Irish Creams & Poitín
Irish whiskey sales volumes overall were up 23% to 14 million nine-litre cases for 2021 while Irish Creams were up 18% to 9.8 million cases and Poitín was up 94% to an estimated 4,827 six-litre cases. It should be remembered, however, that Poitín is sold in six-litre cases rather than nine-litre cases and it sells in the thousands of cases rather than the hundreds of thousands or millions as yet. Nevertheless, the increase represents a halting of the decline in Poitín sales seen in recent years. This is attributed to e-commerce and “some success for the category in Dublin airport”.
e-commerce & GTR channels
e-commerce was responsible for €18.44 million of spirits sales in Ireland last year, but some €41 million was spent on beer via e-commerce and €50 million on wine; e-commerce was responsible for €4.5 million being spent on cider.
The reopening of international travel resulted in a modest recovery of spirits sales in the Global Travel Retail trade last year but a full recovery is anticipated to be in line with travel returning to pre-pandemic levels, states the report.
Ireland spirits
Focusing in on the fourth Quarter of 2021, sales/excise receipts for spirits jumped by around 42% compared to the Q3 take. This happens every year.
Vodka (30% of the spirits market), Irish Whiskey (25%) and Gin (14.4%) were the most popular spirits in Ireland in 2021.
At 740,000 cases, Vodka sales were up 4.12% on 2020’s 711,000 case figure while Irish Whiskey sales were up 4.8% to nearly 620,000 cases. At 357,000 cases sales of Gin showed growth of nearly 13% on 2020’s 316,000 case figure.
Overall alcohol consumption continues to decline here, down by 4.7% to 9.56 Litres Per Adult last year.
Ireland’s protected by Geographical Indication spirits (Irish Whiskey, Irish Cream and Poitín) performed strongly, with global sales up by 21% in 2021. The US, the UK and Canada were the top three markets for Irish GI spirits exports.
Volume sales of GI spirits to the US were up 13% to 8.2 million cases from 7.3 million, with UK volumes up 18 % to under 2.4 million cases from just under 2 million in 2020.
Sales of GI Irish spirits into Canada remained level at around 1.2 million cases last year. Germany imported 1.3 million cases last year, 37% up on 2020’s 932,000 figure and Russia overtook Ireland for spirits consumption, importing 881,800 cases last year over its 2020 figure of 658,700, indicating growth of 34%.
Ireland’s own GI case numbers were 760,980 in 2021, up nearly 30% on the 2020 figure of 591,000 cases but we slipped from second sixth place in the market table after Russa.
Irish Whiskey globally
Irish Whiskey’s spectacular global growth was notable once again, with sales reaching 14 million cases in 2021. Last year also saw Russia become the second-biggest customer for Irish whiskey after the US, overtaking the UK in the process, however this is unlikely to be the case this year.
The US was Irish Whiskey’s biggest customer, importing some 5.8 million cases of Irish Whiskey in 2021, up 17% on 2020’s figure of 4,928,500. Russia imported 716,900 cases, up 34% on 2020’s 534,300 figure while the UK, now in third position, imported some 643,900 cases, up 21% on 2020’s 531,000 figure. Germany, in fifth place after Ireland, imported 580,000 cases of Irish Whiskey, up 33% on its 436,000 figure the previous year.
Irish Cream Liqueurs
Meanwhile, Irish Cream’s global sales followed a similarly strong trajectory and are expected to top 10 million cases for the first time this year. Ireland’s domestic market saw it consume an estimated 141,380 cases.
Top markets for Irish Cream Liqueurs are the US (2.5 cases, up 6%), the UK (1.7 million cases, up 22% from 1.4 million cases) and Canada (805,050 cases, down 4% from 2020’s 839,000 case figure)
RTDs & NoLos
The growth of Ready To Drink and NoLo products has emerged as a key trend.
IWSR identified RTDs as one of the stand-out categories during the pandemic, increasing in volume by 14% in 2021 on top of 26% growth in 2020 notes the report.
“RTD sales in Ireland mirrored this trend with cocktails and long drinks (plus 60%), hard seltzers (plus 46%) and flavoured alcoholic beverages (plus 27%) all seeing market share increases in 2021.”
This expansion was seen primarily in the off-trade, with most RTDs being imported into the country.
“However there has been a steady increase over the last three years in local produced RTD products which is likely to continue,” predicts the report.
At 170,400 cases, sales of Irish-produced RTD brands rose by 7.4% between 2020 and 2021, but at 976,700 cases imported RTD brands showed far greater growth of over 37%.
Last year, Flavoured Alcoholic Beverages accounted for just under 50% of RTD sales here while cocktails and LADs accounted for just under 25%. Hard Seltzers accounted for just over 13% as did Wine Spritzers and Coolers.
The off-trade was responsible for just under 90% of RTD sales in 2021.
The growing popularity of NoLo products here in Ireland is another of the country’s emerging trends.
While beer and cider brands lead this trend, the NoLo spirits category has started to emerge with sales up by 314% last year albeit from a low base of 7,250 cases . This compares to No Alcohol Beer selling 731,110 cases here last year, up 36% and Low Alcohol Beer selling 261,110 cases, up 81%.
As for No Alcohol Cider, sales were up 52% to 77,780 cases.
US whiskey & Bourbon
US whiskeys and Bourbons had a good 2021 here with sales up 25.6% to 2.8 million cases following a decline of nearly 40% in 2020 due to the effects of the EU tariffs.
“Last year was another challenging one for Ireland’s spirits sector which again demonstrated strong resilience in the face of the Covid-19 pandemic,” said Drinks Ireland|Spirits Chair Bryan Fallon, Managing Director of Heaven Hill Ireland, brand owner of Carolan’s Irish Cream liqueur and Irish Mist Honey liqueur, “It was positive to see a rebound in domestic sales and exports in the second half of the year as hospitality venues reopened.
“In order to enable us to fully rebound in a timely manner and further support the economy, we would call for an excise cut in the upcoming Budget. With the third-highest excise on spirits in the EU, Ireland levies a disproportionate percentage of the tax burden on distilleries who’re promoting Ireland on the global stage.”
Ireland lies behind only Finland and Sweden for the highest overall rate of excise tax despite the spirits industry here providing employment to around 180,000 people.
For the second year running, revenue raised from overall alcohol in 2021 declined by over 2% on 2020. But net excise receipts for spirits drinks increased for the 12th year in a row, bringing in €388.7 million.
Almost all the various spirit categories saw an increase in sales last year, reported Vincent McGovern, Director of Spirits at Drinks Ireland and author of the report, who points out that Irish Whiskey, Gin, Irish Cream, Rum and US whiskeys all moved past their 2019 sales figures. The notable exception to this was Vodka which, while improving on its 2020 sales, still fell short of its 2019 figure.
“As a strong export-led industry, free and open trade remains vital,” he stated. “As such a number of challenges remain for the sector including the continued fallout from Brexit.”
