Beverage Dynamics

Beverage Dynamics Jan-Feb 2016

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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Page 54 of 71 January/February 2016• Beverage Dynamics 55 IRISH WHISKEY enjoyed another strong year — one more in a string of annual double-digit growth. The category has bulked up, now eclipsing single malt Scotch in volume, if not sales. Irish whiskey is entering a new phase. Companies large and small are investing in liquid stocks and building new distilleries. No longer is the market monopolized by a single brand and a handful of distilleries. Producers are experimenting with new variants, fi nishes and ex- pressions, enlarging the range of styles and choices. High-end products are meant to change consumption patterns, turning shooters into sippers. This evolution is refl ected in the messag- ing from the brands, with a shift in emphasis to the liquid in the bottle rather than romantic tales. POT OF GOLD One thing that's still true about Irish whiskey is its gallop- ing growth, which has caught the notice of consumers, retailers and global drinks companies. "Hands down, Irish is the biggest whiskey category in terms of growth," says Ted Farrell, president of Has- kell's Inc., a wine and spirits retailer based in Minneapo- lis. "Customers are interested in trying all the new Irish whiskeys that keep on cropping up." "The Irish whiskey category is still on fi re, and Tul- lamore D.E.W. is outperforming the category," says Lisa Pfenning, Category Marketing Director. Par- ent William Grant & Sons invested more than $15 million building a distillery in the town of Tullam- ore, which opened in late 2014. "We wanted to get into that thriving category," says John Hudson, VP, Director of Innovation for Brown-Forman. Irish whiskey, he says, has been growing double digits over the past fi ve years and now accounts for 10% of the overall whiskey share in the U.S. The Kentucky-based company is build- ing its fi rst distillery outside the U.S. A great deal of fanfare surrounded the ground-breaking last September on the estate of Slane Castle in Boyne Valley, Ireland. Brown-For- man is pouring $50 million into the construction, involving a restoration of an 18th century stables complex. Slated for completion late this year, the facility will boast a potential output of more than 600,000 cases, as well as a visitor experience center. The fi rst bottles of Slane should appear on shelves by spring 2017, Hudson says. The whiskey will undergo a triple-casking pro- cess—in used cooperage stock, Sherry casks and new oak barrels. Stats bear out the confi dence in the Irish arena. Revenues rose 10.7% in 2014 to $550 million, according to the Distilled Spirits Council (DISCUS). Volumes were pegged at 2.8 million 9L cases, which is now bigger in volume (though not sales) than the single malt Scotch category. CHANGING GUARD Before now, the impetus for growth came largely from category leader Jameson. The Pernod Ricard brand alone accounted for more than 2 million cases in 2014, according to The Beverage Information Group. Now, that dominance is being challenged by brands old and new. "Irish whiskey has seen huge growth, but most of that has been from Jameson," notes Broc Smith, owner of Sarasota Liquor Locker in Sarasota, FL. "Jameson is still popular - a big piece of that market - but now everybody wants a piece of that growth." "There's been a large multinational that has done a great job rebranding and recruiting consumers into Irish whiskey," comments Stephen Teeling, Marketing Di- rector for Teeling Whiskey Company. "They may have been recruited by that market leader, but now their palates are developing and they are looking for variations to try." "Beyond Jameson, we are seeing different ex- pressions coming out of Ireland," says George Ryals, manager at All Star Wine & Spirits in Latham, N.Y. "There are whiskeys people had been clamoring for. Paddy's wasn't available for years; now we can hardly keep it on the shelf. And high-end, rare bot- tlings like Green Spot and Yellow Spot are fi nally appearing in the U.S. market." Segmentation is starting to occur, Teeling says, which is why he and his brother Jack relaunched the family brand with innovative, more upscale liquid. Last summer, the Teelings opened a 10 mil- lion distillery, the fi rst in Dublin in over 125 years and the only operating facility in the capital of PROOF IN THE BOTTLE Irish whiskey enters a new phase. BY THOMAS HENRY STRENK

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