Millennials keep Irish whiskey sales strong
U.S. sales of Irish whiskey this past year jumped 9.4% compared to a year before, bringing distillers about $1 billion in revenue, according to CNBC.
The product's popularity helped spirits take market share away from beer, which they have done for nine straight years, David Ozgo, chief economist for the Distilled Spirits Council, told CNBC. Millennials willing to spend more money on higher-quality alcohol are a major driver of Irish whiskey sales in the U.S., he added.
The volume of Irish whiskey sold in this country has increased by 61% during the past five years, according to the Irish Food Board.
The rise in Irish whiskey sales comes from more spending on higher-quality alcohol, more types of the product being available, and a higher marketing spend on certain brands, according to CNBC.
Still, there's a ways to go, since Irish whiskey comprises less than 3% of total spirits case volume sold, CNBC noted. In 2013, only three Irish distillers dominated the market. Now there are 18 new ones and eight more coming online, the site reported. The current top producers of Irish whiskey are Jameson/IDL, which has an approximately 70% share of the global market and is owned by France-based Pernod Ricard; Tullamore DEW, made by William Grant & Sons; and Bushmills.
Bushmills, established in 1608, claims to be the world's oldest licensed whiskey distillery. Despite being around for 411 years, the brand isn't happy with its third-ranked production position — a 6% share of the category — and is determined to improve the situation. The company is investing more than $77 million to double capacity during the next five years at its distillery in Northern Ireland and initiated a publicity campaign in January to elevate its profile in the U.S.
William Lavelle, head of the Irish Whiskey Association, told The Spirits Business this past fall that the industry is on track to meet and even exceed its "ambitious target for export growth by 2020."
Whiskey and other spirits are growing in popularity because of new consumers, shifting millennial tastes and liquor ads on television. Irish whiskey occupies a smoother and less smoky niche than scotch and isn't as sweet as the American or Canadian varieties. Also, it's increasingly featured in cocktails including Irish coffees and whiskey sours.
Irish whiskey isn't the only type of spirit exhibiting strong millennial appeal. The demographic's cocktail culture also extends to tequila, bourbon, gin, cognac and others. Not only do millennials drink more alcohol than baby boomers or Generation Xers, but they also like to switch it up with brands and try out different products for greater variety.
Whether this current growth in Irish whiskey's popularity will continue is another question. New beverage products are emerging all the time, and there are plenty of other options — with alcohol, without it or with low levels of it — to tempt consumers who like to imbibe.
But if Irish whiskey does show staying power, it's possible big alcohol brands will look into investing more in it or other types to get in on the growth potential. Diageo, which owns Johnnie Walker, brought out Roe & Co. blended Irish whiskey in 2017 and juiced its marketing budget by 20% from the previous year.
There are further opportunities from partnerships. Big companies might even take a chapter from AB InBev's and Beam Suntory's playbook and collaborate — a partnership like aging Budweister beer in Jim Beam bourbon barrel staves and jointly featuring the product at "beer and bourbon shot" bar-based promotions.