Irish whiskey sales forecast to exceed Scotch in US by 2030

Sales of Irish whiskey in the US are expected to overtake Scotch in the next decade, according to a new report by Drinks Ireland.

The Irish Whiskey 2010-2020: The restoration of the Irish whiskey industry across our shared island report by Drinks Ireland/Irish Whiskey Association (IWA) looked at the sector’s performance over the last 10 years.

The US remains by far the largest market for Irish whiskey accounting for 42% of all sales last year, up from 28% in 2010.

The report also noted the performance of Irish whiskey versus Scotch. In 2010, sales of Scotch were running 470% ahead of Irish whiskey, whereas in 2019 the gap was down to 76%. As such, the report predicts that sales of Irish whiskey in the US could overtake sales of Scotch over the next 10 years, the first time this has been the case since before prohibition in the 1920s.

Irish whiskey is the world’s fastest-growing spirits category of the past decade, growing volumes by 140%, the report noted. This equates to an average compound annual growth rate (CAGR) of 9.1%. Global sales of Irish whiskey grew from 60 million bottles in 2010 to 144m bottles in January 2020. The value of Irish whiskey exports from Ireland reached €890m (US$1.1 billion) in 2019.

Furthermore, the Irish whiskey industry has invested €1.55bn (US$1.9bn) in total over the past 10 years, led by capital investment in distillery developments. The number of Irish whiskey distilleries also grew from four in 2010 to 38 in 2019.

William Lavelle, head of Drinks Ireland/IWA, said: “In 2010, there were just four distilleries operating on the island of Ireland. Now, only 10 years later, we have 38 distilleries working in towns and villages throughout Ireland, creating jobs, attracting visitors and resulting in the restoration of distilling to areas which once had rich traditions in whiskey production.

“We have seen hundreds of millions of euros invested in distilleries in leading distilleries such Tullamore and Midleton, while new distilleries such as Teeling Whiskey Distillery in Dublin 8 and The Shed Distillery in Drumshanbo, Co Leitrim, have played a pivotal role in the regeneration of their respective communities.”

The industry also employed 1,640 people directly prior to the coronavirus pandemic. The number of staff directly employed in visitor centres peaked at 409 in 2019.

Challenges ahead

The report also looked at the opportunities and challenges for the category in the years ahead. The report highlighted that Irish whiskey ‘should become increasingly competitive in the premium-and-above price over the next decade, in turn delivering increased value-added to the industry’. In addition, market diversification ‘offers major opportunities’ along with the emergence of a ‘re-imagined on-trade space’ once bars and restaurants reopen after Covid-19.

It also noted that there has been a 60% drop in the area planted under spring barley since 1985, which must be reversed to ensure there is enough supply for the sector. Other challenges include Brexit, the emergence of fake products and distilleries and ‘increasing concerns’ over available bottling capacity for Irish whiskey in the country.

Lavelle said: “Irish whiskey can look forward knowing there are still many opportunities out there, from the potential that market diversification offers in terms of growth in Asia and Africa, to the opportunities on offering from the emergence of e-commerce as a major new sales channel for spirits.

“However, our industry also faces challenges, from the declining spring barley base in Ireland to the threats posed by protectionism and the divergence Brexit will bring to our all-island industry. Our industry has proven to be resilient and we will get through these.”

David Stapleton, outgoing chairman of Drinks Ireland/IWA, said the industry will bounce back in 2021 after experiencing an “extremely difficult year”.

The report noted that the ‘immediate goal’ for the sector is to return to the 12m case sales in 12 months target. A target for sales growth over the next 10 years will be deliberated in due course once data for 2020 is available.

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Author: Nicola Carruthers

Timothy Kelly

Tim is the Founder & Master Distiller at Felene. He developed his passion for the spirits and hospitality business while growing-up and working in his family's restaurant and liquor store business. Tim’s passion for the epicurean lifestyle has found it’s latest manifestation in the Felene Distillery. Tim is a 5-time Gold Medal Award winning Distiller. He has won a Platinum medal at the Prestigious Los Angeles Spirits Awards and his signature vodka was named Best-in-Category by the American Distilling Institute. Mr. Kelly is also a prolific author and writer and his blog is filled with ideas, discoveries, observations and recommendations to help his readers enjoy life’s simple epicurean pleasures.

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