Irish whiskey is the world’s fastest growing spirit, though coming from a low base, according to a report by Davy Stockbrokers.
The Dublin stockbroker said the renaissance of Irish whiskey has helped whiskey to outpace growth in the rest of the food and beverage sector, which itself outperformed the rest of the Eurofirst 300 stocks in the past week.
With beverages sales across Europe growing at a 13.5% rate, and European food producers growing at 1.2%, they are markedly outperforming the FTSE E300 companies, which have fallen 2.6%.
In a special focus on whiskey in its food and beverage report, Davy notes: “The Irish whiskey category has undergone significant change in the past number of months. Most notably, Beam, the US spirits giant, acquired the lone remaining Irish-owned distillery when it paid $95 million [€75m] for the Cooley distillery. Beam will now compete in the Irish whiskey space against category leader Pernod Ricard [Jameson, Paddy, Powers], Diageo [Bushmills] and William Grant [Tullamore Dew].”
Davy noted: “Beam has already earmarked the Kilbeggan brand as the group’s new priority Irish whiskey brand from among the Cooley stable. As a result of Beam’s acquisition of Cooley, the majority of third-party brands as well as much of the private label Irish whiskey market will now disappear.”
The stockbroker also notes that Cooley had previously been the main supplier of liquid for much of these smaller brands, but predicts that Beam will now discontinue these contracts where possible.
The Davy report notes that Irish whiskey has fallen a long way over the past century.
Davy’s analysts note: “While Irish whiskey is the fastest-growing whiskey category in the world, it is coming off a low base. Scotch is now a 90 million case-a-year industry globally compared to Irish whiskey at around 5 million cases. For comparison, American whiskey is a 30 million-case industry and Canadian whiskey sells 20 million cases annually.”
Jameson is Ireland’s strongest export brand by a significant margin, accounting for around 3.4 million of the five million cases exported annually. Davy is predicting that Beam’s acquisition of the Cooley distillery may see a greater degree of competition emerge in the category in future years.
When Jameson recently surpassed the sales marker of 1 million cases to the US market, Irish Distillers Pernod Ricard chief executive Alex Ricard said: “We are delighted with the progress of Jameson globally. Almost 230 years since the Jameson Distillery was founded, this is a huge achievement for the brand, one I am sure John Jameson would have been proud of.
“As well as our increasingly valuable consumer connection, it is the passion of the people behind the Jameson brand that is one of the greatest reasons for our success. Combine this with the global reach of Pernod Ricard and you have a recipe for global success.”
Jameson has been the driving force in the Irish whiskey category and represents two-thirds of global volume and three-quarters of US volumes. Tullamore Dew (William Grant) holds the number-two position with approximately 600,000 cases sold per annum; Bushmills (Diageo) sells about 500,000 cases per annum.
© Irish Examiner Ltd. All rights reserved