Monday, February 3, 2014

3/2/2014: Good Plans = Good News: Irish Whiskey

Those of you who have been reading my work over the years know that I am big supporter of independent craft whiskey distillers in Ireland and been arguing in favour of policy supports to strengthen indigenous sector here.

So it is good to see some serious growth in the sector here. The latest numbers, provided by the Irish Spirits Association are below:

While still trailing behind Scotch, we are starting to gain some ground. The key here is, however, the number of distilleries. At only 4, Irish whiskey sector remains firmly captured by big, commoditised, lower-quality price-competition focused producers. The sector is still lacking innovation and competition.

The positive is that over the next couple of years there some 11 additional distillery projects underway or being planned in Ireland. By 2020, the sector potential is projected to double to over 12 million cases exported annually, from current 6.2 million. But even at these levels, Irish whiskey will remain under-represented in the global markets compared to Scotch, unless Ireland gets serious at pushing up the value of its whiskey. And this can only be done by careful and rapid innovation and focus on high quality, specialist whiskeys.

The ISA clearly identifies core markets for Irish whiskey as the US, followed by the UK, with "...emerging markets such as Russia and China present significant opportunity for future export driven growth in the sector." Surprisingly, India is not cited. Neither is Japan. Both are big whiskey markets and both offer significant upside for quality premium whiskeys. 

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