Irish Whiskey: From Renaissance to Maturity?

June 2022

Despite a rebound in 2021, notably in the US, Irish whiskey may be increasingly challenged by RTDs and world whiskies. A more diverse geographic reach could help the category sustain growth and avoid saturation, for which Irish whiskey brands will also continue building premium credentials and innovating to create distinct attributes beyond aged expressions. While shifts in drinking habits may intensify challenges to the category, they also open up possibilities for cross-category reinvention.

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Key Findings

Strong recovery in 2021 but can growth be sustained?

Following years when its growth trajectory seemed almost gravity-defying, Irish whiskey’s COVID-19-induced downturn has proved to be short-lived, with a strong rebound seen in 2021, particularly in its largest market, the US. However, the category is set to reach a greater maturity and may be increasingly challenged by RTDs and other spirits, notably world whiskies.

Reaching beyond North America and Western Europe to avoid saturation

Although North American and European markets are not fully mature and retain potential for growth, notably Germany and Poland, a more diverse geographic reach, notably by focusing on expansion in Asia Pacific and Latin America, will be increasingly essential for Irish whiskey to sustain growth momentum and avoid saturation as the category becomes more crowded.

Premiumisation: Innovations beyond aged expressions remain key to future success

Due to the limited amount of aged expressions available, Irish whiskey brands have successfully innovated in creating distinct types of premium positioning ranging from the archetypical Irish whiskey style, single pot still to the innovative uses of cask ageing. Whether brands are entirely new or have a long heritage, they will remain focused on authenticity, history and provenance.

Learning from other drinks categories and exploring cross-pollination innovations

While competition with whiskies of other origins and spirit-based RTDs is expected to intensify, this presents not only challenges for Irish whiskey but also opens possibilities for cross-category innovations, through new flavours, new cask ageing methods and limited editions, notably through potential collaborations with Japanese whisky, US whiskey and stout beer.

Shifts in consumption habits favouring RTDs and rise of the sober-curious consumer

The long-term trend towards preparing cocktails at home may lead spirits players to target new consumption occasions through new recipes and packaging and brings potential for flavoured whiskies. The rise of sober-curious consumers and moderate alcohol use among young adults may encourage further shift towards drinking less but better and may favour RTDs over spirits.

 

Scope of the Report

Scope

Key findings

Key findings

Targeting new markets to sustain growth momentum

US drives global recovery in 2021, but small markets remain largely untapped
Solid performance expected across major markets despite slowdown in Europe
Irish whiskey resilient amid recovery of Japanese whisky and emerging “new world” whiskies
Global expansion opportunities hinge on favourable legal framework and trade agreements
Shift towards Irish whiskey in key markets, but still no clear breakthrough in smaller markets
Price polarisation in other blended Scotch whisky: A model to sustain growth in Irish whiskey
Premiumisation supports Irish whiskey’s high unit prices despite rising affordability in Europe
Asia Pacific markets underdeveloped but recent market entries show renewed opportunities

Intensifying competition between premium brands

US: Jameson drives the overall category as plethora of premium niche brands join the fray
Single still pot and beyond: Premiumisation makes the category increasingly crowded
Consolidation expected to gather momentum in Irish whiskey following M&A activity in 2021

Premiumisation and innovation strategies to target new audiences

Beyond heritage-based positionings and aged whiskey: Innovations targeting new audiences
Jameson Orange in a quest to create new consumption occasions for Irish whiskey
Titanic Distillers offers a distinct Irish whiskey experience to build distinct brand attachment
Foxes Bow an innovative brand through its recipe, its packaging and with crowdfunding
Waterford Distillery showcases sustainability and natural ingredients with biodynamic recipe
Sustainability goals intertwined with brand experiences as core elements of brand identities

Shift in consumption habits blurs category boundaries

Increasing cross-pollination with other categories: Japanese whisky, US whiskey and stout
Spirit-based RTDs: A growing challenge for Irish whiskey but also a source of inspiration

Conclusion

Key takeaways: Wider geographic reach, differentiation and sustainability as growth pillars

Alcoholic Drinks

Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.

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