Irish whiskey’s billion dollar baby
Words by Joseph v Micallef The revival of the Irish whiskey industry has been driven in large part by the tremendous expansion of its sales to the US market. In 2002, sales to wholesalers of Irish whiskey in the US were just $74 million, approximately 434,000 9-liter cases of whiskey. According to the Distillers Council of the US (DISCUS), roughly 11,000 cases represented lower-priced product, 413,000 cases were classified as High-End Premium and 9,000 cases were classified as Super Premium. High- End Premium represented just $6 million in sales to wholesalers. Jump ahead 16 years to 2018, and the transformation of Irish whiskey sales in the United States is staggering. In 2018, total sales of Irish whiskey to wholesalers reached $1.011 billion. This is the first time in its history that the Irish whiskey industry has achieved sales of over one billion in any export market anywhere in the world. The growth rate in Irish whiskey sales to America over that 16-year period is 1268%, or just short of a 13-times increase. Little wonder that Irish whiskey is the fastest-growing whisky category in the world. A detailed breakdown is even more remarkable. During this period, unit sales grew from 434,000 cases to 4,686,000 cases. Sales of lower-priced whiskey grew from 11,000 cases to 40,000 cases, an increase of 255%. Sales of High-End Premium whiskey, the category where most Irish whiskeys are priced, grew from 413,000 cases to 4,091,000, an increase of 888%. In revenue terms, sales increased from $66 million to $793 million. It is sales of the Super Premium category, however, where the sales increases are most astounding. Between 2002 and 22018, shipments grew from 9,000 cases to 555,000 cases, an increase of over 5901%; that’s a 59-fold increase in 16 years. In dollar terms, sales of Super Premium whiskey increased from $6 million to $211 million, a 3384% increase in revenues. No surprise that the Irish whiskey category in the US is on fire. As remarkable as the growth of Super Premium Irish whiskey has been, it still pales compared to the $678 million in Super Premium Scotch whisky sales in the US. Overall, the Scotch whisky market in the US is approximately $2.3 billion, more than double the size of the Irish whiskey market. Still, considering the Irish whiskey industry’s late start into the American market, and that only a fraction of Ireland’s 35 operating or planned distilleries have yet to achieve significant distribution in the US market, the success of Irish whiskey sales in the US is impressive.
Average bottle cost tells a different story. Irish whiskey in the US is more expensive than Scotch and Canadian imports and is second only to Japanese whiskey in average bottle price. In the Super Premium category, the results are slightly different, Irish whiskey is less expensive than Super Premium Scotch whisky, which is typically 50% more, although, on balance, Super Premium Scotch whisky is older than its Irish counterpart.
These statistics reveal both the opportunity and the potential weakness of Irish whiskey sales in the US. Irish whiskey producers have, on average, been able to command a premium price compared to their other whisky cousins. The novelty of Irish whiskey has helped. That novelty may not disappear soon, especially as new Irish brands debut in the US, but it won’t last forever either. The Super Premium market is one that has shown the fastest growth and one that Irish whiskey producers have shown they can be competitive in. There is still a lot of growth left in that market as the consumer trend to drink less but better continues. It is a significant opportunity for Irish whiskey producers to expand their sales, provided they have the liquid to do so. Time will tell. Until then, the US will remain the Irish whiskey industry’s, billion-dollar baby.
