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Irish Whiskey: From Renaissance to Maturity?

7/13/2022
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Does the sustained momentum of the post-pandemic recovery witnessed in 2021 point to several more years of uninhibited growth for Irish whiskey or is it expected to face similar challenges to more mature spirits categories? A more diverse geographic reach would ensure that Irish whiskey can avoid saturation, while in mature markets brands will also need to continue diversifying and innovating to build distinct attributes beyond aged expressions.

Irish whiskey still in early stages of its journey to become truly global spirit

Following the 2021 rebound in the US and in other major markets including Australia, France, Germany and South Africa, Irish whiskey is forecast to record a slowdown as it reaches greater maturity. Sustaining growth momentum may increasingly rely on strategies by key players to diversify their geographic reach, a shift made more urgent by the lack of access to the Russian market.

Asian markets remain largely untapped, with India offering the greatest opportunities. Although domestic brands are expected to remain heavily dominant due to affordability, Irish whiskey has gained traction alongside single malt Scotch options among affluent afficionados of whiskies, despite prohibitive import tariffs. As India negotiates free trade agreements with the UK and with the EU, potentially resulting in a drastic reduction of the 150% duty on imported spirits, Irish whiskey may start flowing into the market.

In China, the rising popularity of single malt Scotch whisky among young cosmopolitan consumers highlights the opportunities for premium Irish whiskey, notably through e-commerce with the support of social media platforms and influencers. Owned by the Amber Beverage Group since 2021, the brands The Irishman and Writers' Tears are likely to accelerate expansion in Asia Pacific, while the Hyde brand entered China in 2021 following its successful launch in Japan in 2019. The Japanese market illustrates how Irish whiskey can occupy a premium niche, and value sales growth is forecast to remain driven by a growing appreciation of high-end whiskies combined with a rising interest in spirits from various origins.

Beyond Asia, promising emerging markets in Latin America include Argentina and Brazil, as the EU is negotiating a free trade agreement with the Mercosur bloc, which may lead to an elimination of the tariffs on spirits exports.

Irish Whiskey

Source: Euromonitor International 

Increasing cross-pollination with other categories to target new audiences

Irish whiskey increasingly seeks to attract consumers from adjacent categories by incorporating attributes from other types of alcoholic drinks to innovate.

The influence of Japanese whisky is gaining traction for premium and luxury expressions, notably through rare casks finish using Japanese wood. Mizunara oak casks were chosen by Method and Madness for its limited-edition single pot still, and by Glendalough, which expanded its range with this cask finish with a new 7-year expression, while ageing in Japanese sugi cedar wood casks was adopted by Roe & Co Japanese Sugi.

Offering stout cask editions, made popular by Jameson, has also been recently adopted by niche brands to create a distinctive pairing between Irish whiskey and stout, a beer style closely associated with Ireland, with recent launches including Hinch under the Craft & Casks Imperial Stout Finish.

Many Irish brands have recently entered the market, including Foxes Bow and Lost Irish, which eschew traditional visual codes for their marketing and packaging, thereby giving the category a fresh and dynamic identity while still anchoring their positioning in terms of authenticity and local provenance.

As young adults across developed markets increasingly seek to reduce their alcohol intake, which favours the continued rise of spirit-based RTDs, flavoured Irish whiskey variants targeting a younger audience are set to play an ever more prominent role, including through innovative flavours such as cold brew coffee, which was successfully pioneered by Jameson.

Although shifts in drinking habits are set to bring challenges, they also create possibilities for cross-category reinventions, a journey which Irish whiskey is well-positioned to embark upon, as a category shaped equally by the recreation of old brands as it is by the building of new ones.

To find out more, please read Euromonitor International’s latest global briefing, Irish Whiskey: From Renaissance to Maturity.

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