Sunday, April 5, 2015

5/4/15: Irish Whiskey vs Scotch 2013-2014 data


Irish whiskey resurgence in recent years (here) has been a welcome development, in terms of offers and brands expansions, and in terms of exports growth. Between 2009-2014, average annual rate of growth in Irish whiskey exports stood at 9.86% pa.

However, owing to decades of under-development and the state policies of the past, Irish whiskey remains a poor cousin (in global sales terms) to Scotch. Over 2002-2013, Scotch posted an impressive exports growth of 7.0% pa on average, beating Irish growth over the same period. And it did so from a much higher base. Here are the comparatives:


In simple terms, Scotch exports are 3.8 times the size of all exports by the Irish drinks sector and almost 13 times the size of our exports of whiskey. All along, our state agencies and policymakers continue to measure success in volumes of sales, rather than in value. As the result, we are missing the boat in the high end, high value-added markets, going instead for the tradition market for Irish whiskey: mixer market.

Good news: with multiple new distilleries coming into production in the last 3-5 years, we are starting to see a promise of this trend being reversed, with some producers embracing quality over quantity approach. Bad news: it takes 12 years, plus, to mature premium whiskey. More bad news: Irish domestic markets for inputs into distillery: from barley to malt to electricity are either expensive (we rank third most expensive country for electricity supply to enterprises) or not available due to CAP-incentivised standardisation (lack of specialist barley is dire in Ireland, according to several smaller distillers I spoke to recently).

Update: Here is an interesting set of results from an international whiskey/whisky competition: http://uk.businessinsider.com/best-whiskeys-from-the-san-francisco-world-spirits-competition-2015-4?r=US# Note that Ireland features 3 brands (all independents) against massive dominance of Scotch.

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