Raising Irish Spirits

Growth in Irish whiskeys and Irish creams is due to far more than the luck of the Irish.


Ask people what the fastest-growing spirits category is and they’re likely to say vodka or maybe cordials. They’d be correct in identifying these categories as tremendously successful, but they’d be wrong in assuming one of them is the fastest-growing. That honor goes to Irish whiskey. There’s no doubt the cocktail craze has held the drinking public’s fascination for a couple of decades now. A whole new generation of consumers has come of age in an era when white goods have dominated and products like cranberry-flavored vodkas are de rigueur. For the most part, brown goods, especially whiskey, have seen little growth during that time.


For several years, however, Irish whiskey has outpaced every other category in the industry, though it is obviously measured from a very small base relative to other larger spirits categories. Irish whiskey as a whole was up 19% in 2006 to 732,000 9-liter cases nationally, and though final numbers aren’t in, it grew at a double-digit pace again in 2007. [In the control states, total Irish whiskey sales were up 18.0% on a 12-month rolling year from August 2006 to August 2007.] Irish distillers have more tricks up their sleeves this year, suggesting the category’s expansion is far from finished.


Consumer interest in Irish whiskey may well be a result of the cocktail culture. One reason white goods have been so successful is due to their mixability and the fact that they can be used in so many different types of drinks. That feature, along with consumers’ insatiable desire for new flavors and experiences, has led producers to create flavored white goods, and has led consumers to try more flavorful spirits.


   “Although much has been written about the cocktail phenomenon among the white spirit categories, whiskey has enjoyed the renewed enthusiasm for cocktails as well,” said Wayne Hartunian, Jameson brand director at Pernod-Ricard USA. “Old favorites like the whiskey sour, whiskey and Coke, whiskey and ginger, and the Manhattan have been updated and have found a new audience among younger men and women looking to expand their drinks repertoire.”


Vodka makers have been able to capitalize on changes in consumer tastes quickly, and turn on a dime, introducing the flavor of the week in as much time as it takes to distill a vat of neutral grain spirit. Whiskey makers, on the other hand, are more akin to turning aircraft carriers, taking years of aging and blending to produce a new product. With new products now coming onto the market, distillers can maintain consumer interest in whiskey and expand their choices.


   Another trend that Irish whiskey uses to its advantage is consumer interest in authenticity. Particularly in categories viewed as affordable luxuries, consumers look for products with heritage, originality, or preferably both. Irish whiskeys not only represent a unique style of whiskey, their heritage dates back to the origins of whiskey itself – uisce beatha, or “water of life,” first distilled by Irish monks in the 5th or 6th century in alembic “pot” stills.


Irish whiskey has been one of the world’s favorite spirits. In the 1800s, when French vineyards were decimated by phylloxera, blended whiskey filled the void left by the lack of French cognac. At one time there were more than 1,200 licensed distilleries in Ireland and another 2,000 or more illegal ones. Trade wars with England, however, dealt Irish distillers a blow, and American WWII vets returning from England helped make Scotch, rather than Irish whiskey, a favorite here. As the few remaining distilleries in Ireland regained their footing, they concentrated on the smooth blended whiskeys preferred in Irish pubs.


Today’s Irish whiskeys, in fact, have been called the perfect stepping stone from white goods to more flavorful brown goods. Less smoky than Scotch because most aren’t peated, many Irish whiskeys also are triple-distilled which makes them very smooth.


“There are two trends going on,” said Jim Brennan, product manager for Tullamore Dew at Skyy Spirits. “Traditional whiskey drinkers now are trying Irish whiskeys, and younger drinkers are coming into the Irish whiskey category for its smoothness.”


“Irish whiskey is much more approachable than Scotch,” said T. Kelley Spillane, executive vice president of sales for Castle Brands. “Many are blended for smoothness. They have an almost sweet taste.”


Celtic Tigers


Jameson exemplifies the style, and accounts for much of the category’s growth. “Jameson is far and away the number-one selling Irish whiskey brand,” Hartunian said. “With double-digit growth again in 2006 of 21.9% – the eighth year in a row – it’s the primary driver of category growth in the U.S.”


With about 60% of U.S. Irish whiskey sales, Jameson was up to 439,000 cases nationally in 2006, and sold more than 2 million cases worldwide. The brand was up 19.8% in the control states, on a 12-month rolling year from August 2006 to August 2007.


Jameson has built on its appeal to younger drinkers by investing aggressively in programs that target the demographic. “On-premise initiatives and specialty programs such as the Jameson Comedy Tour, Jameson Bartender Ball, Jameson Ski Slope program and ‘Get Lucky’ bar nights are in place to help drive awareness and trial of the brand among younger, socially active consumers,” said Hartunian.


“Jameson consumers are looking for products and brands that are not pretentious and offer great taste and authenticity,” he said. “They view Jameson as one such brand. Jameson has also gained a foothold among non-traditional whiskey consumer segments by promoting cocktails that appeal to younger consumers and women such as the Jameson and ginger, Jameson lemon-lime and Jameson and cola.”


The brand makes a point of spending year-round, not just around the St. Patrick’s Day period, building consumer awareness through ad spending of nearly $4 million, including both national and local print, on-line and radio.


After taking over the brands, Diageo has been helping Bushmills make some noise in the marketplace. The brand grew 11.9% in 2006, to 151,000 cases nationally, after about a 1.5% increase the prior year, and Black Bush was up to 13,000 cases. Bushmills, which lays claim to the oldest distilling license in Ireland granted in 1608 by King James, is celebrating 400 years of history and heritage this year.


“We did a few programs right away when we purchased the brand two years ago to drive awareness,” said Bill Topf, vice president, Scotch and Irish whiskey marketing at Diageo. “Now the brand is in place to drive home key messages. This will be a very exciting year for us. After all, how many 400th anniversaries do you get? What better way to leverage what we’re all about?”


As part of the celebration, Bushmills kicked off a “Twin City” program to find a U.S. city that best represents the culture and heritage of the town of Bushmills. The brand will choose finalists from applications that towns and cities send in, and consumers will be able to vote for their favorite. The winning city will receive a $20,000 grant.


   Bushmills also has embarked on a new national print ad campaign. Three executions feature the 400th anniversary, the Bushmills distilling team, and Bushmills New York Times award for “best Irish whiskey.” The brand’s master distiller, Colin Egan, will travel to a number of cities during the year to conduct tastings and talk about Bushmills and Irish whiskey.


     Both Bushmills Black and Malt 10 get new outer “tube” packaging this year to celebrate the 400th anniversary, and Bushmills Black also will offer a special on-pack flask package this year as well.


During the St. Pat’s Day period, the brand will be part of a Diageo triple-brand promotion featuring Baileys and Guinness as well.


Tullamore Dew, the number-two brand in Ireland and number-three brand here, also anticipates continued growth. Brand sales were up 9.1% in 2006 to 48,000 cases, and sales globally are outpacing the category, according to Alan Lewis, president of importer C&C International. Last year, the brand saw even higher velocity numbers, and is adding more distributors as a result.


“It’s also why we’re going from a regional ad support program to a national ad program,” Lewis said. Coming off a holiday period in which Tullamore Dew featured its first-ever glass-pack, the brand has launched a national print ad campaign in magazines such as Men’s Journal.


   On-premise, the brand has a new “Dew & Brew” promotion to push the popularity of drinking Irish whiskey with beer. The increased consumer awareness should help off-premise, and consumers now can go online and generate personalized T.D. labels for themselves or to give as gifts.


For St. Patrick’s Day, the brand has revived and redesigned its iconic “crock” package. The ceramic features a white base with gold inscription, topped off with the traditional green neck and cork stopper in keeping with the original crock introduced 60 years ago. Consumers also will be able to take advantage of tri-branded coupons good for up to $10 on the purchase of Tullamore Dew, Carolan’s Irish Cream or Irish Mist.


“Whiskey drinkers have a broad repertoire of brands to choose from, including Scotch, American and Irish whiskeys,” Lewis said. “We want to make Tullamore Dew the brand of choice when they try Irish whiskey, and do the same for younger drinkers, making it easy to switch from Jack Daniels and Coke to Tullamore Dew.”


Powers, another traditional brand imported by Pernod-Ricard USA, saw sales increase 0.7% in 2006 to 25,000 cases, and continues to show growth, especially in Irish bars and pubs here in the U.S. Pernod-Ricard will support it with strong POS materials to keep awareness and interest high.


 


Small Brands Take Root


Smaller brands, too, have been buoyed by the category’s growth. “There’s definitely increased consumer interest both for mainstream brands and high-end brands,” said Kristy Crane, marketing manager at Sazerac, which imports brands from Ireland’s independent distillery Cooley. “Awareness is being driven by the big players, but we’re playing off that.”


Kilbeggan, which was up 8.3% in 2006 nationally to 13,000 cases, continues its upward trend with a new package. The brand is being supported with an Irish coffee program this winter, and for St. Patrick’s Day will be part of a “Pot O’ Gold” program designed to encourage consumer trial. Displays at retail will feature pots on the counter filled with Irish promotional items as incentives.


The Tyrconnell, a single malt Irish whiskey, is a solid offering for Sazerac, offering consumers the complexity of a single malt whiskey with the smoothness of traditional Irish whiskey because the malt is kiln-dried, not peated.


Connemara, Cooley’s traditional peated single-malt whiskey, won a gold medal at this year’s San Francisco World Spirits Competition for its 12-year-old. The brand also has a cask-strength whiskey in addition to original Connemara, all of which appeal to Scotch drinkers and others looking for a smokier, more traditional taste.


    Knappogue Castle, from Castle Brands, is another single malt Irish whiskey, but like The Tyrconnell isn’t peated. A vintage whiskey, Knappogue sold out its first five bottlings. So far, advance orders for its 1995 vintage, introduced last May, have eclipsed sales of the 1994 vintage, according to Spillane.


    Clontarf, the company’s other brand, comes in three styles – Classic, Reserve and single Malt. Notably, Castle’s Boru Vodka has undergone an impressive package redesign and the company is looking for it to create more interest in Irish vodka.


“There’s a lot more interest in the brand at the retail and distributor levels,” Spillane said. “People are looking for alternatives to major brands, and an article in Money magazine gave us some great exposure.”


Look for a limited run of special edition golf balls for Father’s Day this year from Castle Brands.


Other high-end brands such as Midleton Rare and Red Breast, from Pernod-Ricard, also are enjoying solid growth due to their quality and the exposure generated by the major brands.


 


Growing Choices


The choices for consumers that Lewis referenced are increasing. As more and more consumers discover the Irish whiskey category, distillers continue to make things interesting by introducing new and varied products.


Sidney Frank introduced Michael Collins less than two years ago, and the brand sold 12,000 cases its first year on the market.


This year, Jameson is introducing two new superpremium whiskeys to the line. Jameson Vintage Reserve, a creation of Jameson’s master blender, contains some of the distillery’s oldest whiskeys and is aged in port pipes. Suggested retail price is $250. Jameson Gold Reserve is a creative blend of three different whiskeys matured in virgin oak.


As part of its 400th anniversary celebration, Bushmills is launching a special edition whiskey, out before St. Pat’s Day. Bushmills 1608, a blend of three whiskeys, will be available through December. After that, it will only be available in limited quantities in duty-free stores. With five core products in its portfolio, the brand doesn’t expect to add any others in the near future.


Tullamore Dew adds a new 10 year-old in early spring in addition to its regular T.D. and 12 year-old T.D. The new product gives the brand an additional price point and consumers a stepping stone as well as another reason to try Tullamore Dew.


The Tyrconnell plans some new offerings this year, possibly new vintages and wood finishes, though the distillery hasn’t yet decided what it will release.


And Greenore, a single-grain whiskey new from Cooley last year, will expand distribution and introduce its 10 year-old vintage. Distilled from both malted and unmalted barley then laid down in single-use bourbon casks, the first bottling was an 8-year old. They’ll be followed by a 16-year old and finally an 18-year old.


 


Cream Rises


Whiskey, of course, isn’t the only spirit Ireland’s famous for. Thirty-three years ago, some clever, inventive types combined Irish whiskey with fresh Irish cream and other flavorings. The result was Baileys Irish Cream and the start of an entirely new spirits category. Now there are cream liqueurs from countries around the world made with a variety of spirits and ingredients, but the true creams are Irish.


Baileys itself, of course, could be said to be the only true Irish cream. It’s certainly almost a category unto itself. Brand sales were 1.337 million cases nationally in 2006, up 4.2% from the prior year, and industry estimates for 2007 are about 1.5 million cases nationally.


“Baileys is in such a dominant position, it drives the category,” said Peter O’Connor, Baileys global brand ambassador. “It has risen to the level of a mainline spirit, and now really transcends the liqueur category. It was originally seen as a cordial, like Grand Marnier or Drambuie, and drunk primarily by women. It’s really gone way beyond that with the creation of the cocktail culture.”


     Recognizing that the brand had broader appeal, Baileys’ strategy for some time has been to promote year-round. Winter programs have emphasized tie-ins with sports like skiing. Summer programs have emphasized tastings to get consumers to try the product and experience its organaleptic properties. Last summer the brand promoted the “Shiver,” a 70 ml shot of Baileys blasted in a blender with ice for about a minute. The result is like liquid Baileys ice cream.


       Starting with the recent holidays, the brand this year is pushing consumers to incorporate Baileys into their cocktail culture even more strongly with “Shaken Baileys.”


     “The vast majority of Baileys at home is drunk straight up,” O’Connor said. “Cocktails in the on-premise trade are all about making a statement, and due to the demise of formal liqueur occasions – the after-dinner drink – Baileys is behaving like a true spirit, not a liqueur. So, why not rim a martini glass with sugar, shake Baileys with ice and pour and garnish it with a piece of chocolate or caramel?”


The two Baileys flavors which rolled out nationally last year-Hint of Mint and Hint of Caramel – are doing quite nicely, O’Connor said. “We’ve experienced no cannibalization of the original flavor,” he said. “They’re just being drunk on different occasions, which says consumers are drinking Baileys more often overall.”


The brand will continue its support of the John Legend tour this year, as well as Amy Scott concerts. Legend will appear in responsible drinking ads for Baileys. The brand also will do television ads for all three flavors with more ads aimed at Hispanics.


Carolans, the number-two brand globally, grew 5.3% nationally in 2006 to 337,000 cases. Carolans gets a refreshed look this year with updated graphics on the label, and a promotion through the first quarter pushes Carolans and coffee with neck hangers, POS, recipes and more at retail.


   “Our taste is preferred over the leader in the category in taste tests,” said Lewis, “and we protect Carolans recipe religiously. We have the highest butterfat content of any brand.”


Most of the brand’s marketing efforts are concentrated during the colder weather months, but POS is available year-round. For St. Pat’s Day, promotional materials will feature both Carolans and Tullamore Dew, and as mentioned earlier, a tri-branded coupon.


O’Mara’s, from Heaven Hill, continues to gain steam at retail due to its unique distribution channels. Because the brand is wine-based rather than spirit-based, Heaven Hill has been able to get the brand into more retail venues like grocery stores through non-traditional distribution channels.


“Now we’re having as much success in traditional outlets as non-traditional,” said Reed Hafer, O’Mara’s brand manager. “We’re at a point where it’s pretty much an even split between accounts like club stores and more traditional national retail accounts.”


In March, the package gets an updated look-“authentic, but more contemporary,” according to Hafer. New POS support will feature the tag, “The smoothest cream rises to the top,” and the brand debuted a new gift pack for the holidays, too. Tastings will continue to be a key strategy for the brand, and like Baileys, O’Mara’s has been promoting a granita-style drink.


St. Brendan’s tries to distinguish itself as authentic with a different packaging look than others and a focus on the traditional Irish cream made with Irish whiskey and real Irish cream.


“Baileys’ new flavors have put a new wrinkle on the category,” said Dan Streepy, vice president sales and marketing for Luxco, “but we’re focusing on traditional creams. We want to give as many consumers and retailers the opportunity to taste the product as possible.”


The brand will concentrate on local events and POS materials to spread the word.


Castle Brands also markets a value brand in Brady’s Irish Cream. “The category has always been Baileys and everyone else,” Spillane said. To differentiate Brady’s, the brand emphasizes the fact that it controls product quality from the recipe and whiskey distillation through processing. The brand is supported with a full range of POS materials.


     The continuing growth of Irish spirits shows they’re not a flash in the pan. And while everyone is Irish on St. Patrick’s Day, there’s no reason why we can’t enjoy Irish whiskeys, creams, liqueurs and beers all year long.      


 


 


 


Liqueur and Potent Poitin


 


With St. Patrick’s Day fast approaching, be sure to take advantage of all the spirits Ireland has to offer. In addition to fine whiskeys and Irish creams, Irish distilleries make some fine liqueurs and interesting poitins (pronounced po-cheen).


Irish Mist, a traditional cordial like Drambuie or Grand Marnier, is being repositioned this year as an “Irish whiskey liqueur.” The folks at Skyy plan to conduct as many tastings as possible in conjunction with Tullamore Dew tastings so consumers strongly associate the two.


Celtic Crossing, from Castle Brands, is offering drink recipes and a party kit at St. Patrick’s Day, and has plans for a Cinqo de Mayo promotion, too. “It makes great Margaritas,” said Kelley Spillane, executive vice president, sales. “Just trade Celtic Crossing for Triple Sec.”


The brand is working on a cold shot program for the summer, negotiating to place cold shot machines in on-premise accounts. The consumer demand could spill over into a bump in summer off-premise sales.


Other Irish liqueur brands to include in your shelf mix are Ballylarkin Irish Liqueur, a delicious blend of citrus and vanilla and a hint of Irish whiskey, and Eblana Irish liqueur from Cooley Distillery, which offers the full flavor of Irish Whiskey with toasted almond, coffee and peanut overtones.


Poitin, a form of Irish moonshine based on the original uisce beatha, now is distilled legally (and undoubtedly illegally still by innumerable Irish farmers). Made from grain, both peated and unpeated, and often potatoes, poitin (or potcheen) has long had a reputation for great strength.


Brands available today include Bunratty Potcheen, Knockeen Hills Irish Poteen, Poitin 50, Dillons and Hackler. Many are available in different strengths.


Sláinte!

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