For centuries Scotland and Ireland have fought over who was the first to invent whisk(e)y, and now the two nations are set to lock horns over a key export market, the United States, where Irish whiskey sales are fast gaining ground on their Celtic cousins.
Up until the 1900s Irish whiskey was leading the market by a significant margin, especially in the United States. This lofty reputation took a hit following the Irish War of Independence and Prohibition in the US, leaving Irish whiskey trailing Scotch throughout the second half of the 20th century.
Over the last decade this gap has narrowed significantly. The trade group Drinks Ireland/Irish Whiskey Association has just released a report entitled “Irish Whiskey 2010-2020: The restoration of the Irish whiskey industry across our shared island” which charts the industry’s impressive growth.
According to the report the US accounted for 42% of all sales in 2019, making it the largest market for Irish whiskey, compared with 28% in 2010. Even more telling are statistics which reveal that in 2010 Scotch whisky sales were 470% greater than Irish whisky. In 2019 this gap fell to just 76%. In total, the US has accounted for 51% of all Irish whiskey sales growth over the last decade. The report claims that Irish whiskey could overtake Scotch whisky sales in the US by 2030 if this growth rate continues.
Looking at the wider picture, Irish whiskey has blossomed over the last decade as the world’s fastest-growing spirits category with a CAGR (compound annual growth rate) of 9.1%. Total Irish whiskey exports were valued at €890m (US$1.1 billion) in 2019.
William Lavelle, head of Drinks Ireland/IWA, commented: “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 blossoming of Irish whiskey over the past decade is positive news for investors who can expect an uptick in future demand. Appetite for Irish whiskey is expected to remain strong from US-based collectors, especially given that 85% of Irish whiskies have been able to escape the 25% tariffs currently imposed on imports of Scotch whisky. While this tariff system remains in place, Irish whiskey has a golden opportunity to reclaim its former position at the heart of the US whisk(e)y market.