24 Oct Irish Whiskey Barrels Ahead
At the first new Irish whiskey distillery to open in this city in more than 125 years, visitors recently gathered around the copper pot stills founder Jack Teeling has named after his three daughters—Alison, Natalie and Rebecca—to learn about the distillation process.
The curiosity surrounding the Teeling Whiskey Co., which opened last year, is part of a larger wave of interest in Irish whiskey that has new ventures mushrooming across the Emerald Isle. There are now 16 distilleries in Ireland and Northern Ireland, up from four just three years ago, according to the Irish Whiskey Association. Eleven more are planned.
The spirit—which must be made only in the Republic of Ireland or Northern Ireland—jumped 131% by volume globally during the past decade, easily trumping rises of 13% for Scotch whisky and 56% for bourbon during the same period, according to industry tracker IWSR.
Irish whiskey sales remain relatively small, at 7.8 million cases in 2015, compared with 94 million cases of Scotch and 20 million of bourbon, according to IWSR. But rising demand, especially from the U.S., has turned Irish whiskey into the world’s fastest-growing major spirit.
Much of the growth is driven by Jameson, which accounts for 67% of global volumes.
Created in 1780, the brand has soared since its 1988 acquisition by Pernod Ricard SA PDRDY 0.02 % . The French company focused its marketing budget on Jameson, sometimes at the expense of sibling whiskeys such as Paddy, which it recently sold to New Orleans-based Sazerac Co.
Jameson’s sales at constant currency jumped 16% for fiscal 2016. Pernod aims to boost the brand’s annual volume to nine million cases by fiscal 2020 from 5.7 million cases in fiscal 2016, driven by countries including South Korea, India and Japan.
The brand has won a broad fan following in the U.S., where it holds 78% of the Irish whiskey market.
Jameson’s appeal comes from being an easy-to-drink whiskey that “doesn’t take itself too seriously,” said Jean-Christophe Coutures, chief executive of Pernod’s Irish Distillers unit, which also includes other Irish whiskey brands such as Redbreast and Powers.
“A neat glass of Jameson is my drink of choice,” said 28-year old Cristina Battagliola, a Philadelphia-based DJ. “My tastes are geared towards Irish whiskey, and Jameson is just a brand that’s more prominent in bars. I don’t like Scotch or rye.”
Some say Jameson represents a singular success.
“It’s not the Irish-whiskey sector that’s hot, it’s certain brands that are hot,” said Diageo DEO -0.01 % PLC Chief Executive Ivan Menezes in July. Diageo sold its Irish-whiskey brand Bushmills in 2014 to Jose Cuervo International Inc. “We put in a lot of investment and a lot of marketing but we could not get Bushmills to accelerate,” Mr. Menezes said.
Jameson’s dominance, however, hasn’t stopped other distillers from piling into the Irish-whiskey arena, hoping to emulate the brand’s success.
“The consumer appears to like the liquid, is our learning from watching Jameson,” said Mark Brown, CEO of Sazerac, whose May deal to buy Paddy marked its entry to the category. “There is clearly something about Irish whiskey.”
Brown-Forman Corp. BF.A 0.87 % , which is based in Louisville, Ky., is spending $50 million to build an Irish whiskey distillery 30 miles north of Dublin, its first outside the U.S., hoping to ride the Irish whiskey-growth wave.
Jose Cuervo also is optimistic. “Brands may be growing at different paces, but Irish whiskey is a category that is growing,” said Jose Cuervo General Counsel Cristobal Mariscal.
During the 20th century, Irish whiskey was hammered by Prohibition in the U.S., trade sanctions on sales to the British Empire and later World War II. Licensed Irish whiskey distilleries plunged to just two by the mid-1980s from 88 in the mid-19th century, according to the Irish Whiskey Association.
The current renaissance comes amid a large wave of interest in brown spirits, particularly in the U.S.
As new competitors emerge, Jameson is working hard to protect its market share. The brand last year launched what it describes as a “modern” Irish whiskey, aged in beer-seasoned oak barrels. “It’s a way for craft-beer drinkers who wouldn’t have considered whiskey as an option to now try it,” said David Quinn, head of whiskey science for Jameson.
The brand also recently introduced a range of three super-premium whiskeys, each produced in a way that emphasizes one of three parts of Jameson’s production process: blending, distillation in copper pot stills and maturation in casks.
“We want to be on the innovative edge of Irish whiskey,” said Brian Nation, head distiller for Jameson. “We’re pushing the boundaries and playing with the brand.”
Mr. Teeling said his approach to competing with Jameson is not to. He sees Jameson and its variants as “gateway” drinks paving the way for consumers to trade up to Teeling, which applies single-malt finishing techniques to a blended product.
“There will always be people who want to get away from Jameson,” Mr. Teeling said. “They need the likes of us to stay interested in the category.