Irish Whiskey

With
cramped Dublin ‘bed-sitters’ today costing as much as San
Francisco lofts and Boston studios, it’s no wonder that dive
pubs along the Liffey (like the now-toney former
navvy-hangout warehouse section of Temple Bar) have mutated
into posh saloons and the Irish whiskeys they serve (mixed
in with your Cosmos and Euro-potations, unnaturally) have
swiftly jumped from 2 euros for a tot of Power’s to 1O euro
snifters of Midleton. That sort of bibulous gentrification
has to do with Common Market success, and Irish whiskey’s
increasingly successful global marketing and competition
head-to-head with Scotch. (Over the last decade, The Irish
Pub has become a relatively commonplace watering-hole
phenomenon throughout Europe, Asia and the Southern
Hemisphere.) The trend is still making little whitecaps on
this side of the pond, as well, for market projections
(Adams) forecast Irish to climb 12.2% in 2OO6.

Adams Liquor
Handbook [2006] places Boston as Irish whiskey’s
fourth largest metropolitan market (3.6%), behind New York
(12.4%), Los Angeles (5.8%) and Chicago (4.3%). Boston’s
rise in case consumption – from 2O to 22 thousand between
2OO4 and 2OO5 – was comparable with the national average.
Projections are to increase at the same or higher rate. The
Irish sector – the smallest distilled spirits category (O.4%
overall) – nevertheless has notched the highest growth rate
nationally, more than doubling over the twelve-year span
from 1994 to 2OO5, from 268 to 615 thousand cases. Jameson
commands the lion’s share (58.5%), but pays dearly for it,
with a gargantuan advertising budget of $4 million,
aggressively geared to magazines and, as of 2OO5, to
broadcast media as well. That the ad budget for all other
brands is less than 3% of Jameson’s total suggests that a
few well-placed dollars might be well-spent. Your reporter
posed pre-ordained questions as talking points to marketing
managers of major distillers regarding Irish category’s
marketing strategy, brand positioning, emergence from cult
status, and high-end potential. Their answers are prefaced
by brief brand profiles.

BUSHMILLS
While Pernod Ricard is positioning Jameson as an
international spirit brand, Diageo seeks to heap honor on
Bushmills in the Irish whiskey category – to spur both
growth potential and also share growth. Diageo sees
Bushmills as benefiting from being its lone Irish whiskey.
Diageo has two leading Irish brands in its portfolio
(Baileys and Guinness) and has been making the most of these
brands’ Irish charm as selling points to tap into the
still-rising popularity of Irish culture internationally.
Diageo plans to make hay with Bushmills’ venerable
distilling history, as well. As the world’s oldest licensed
distillery, the Old Bushmill Distillery, closing in on 4OO
years, is a major tourist draw in a part of the Irish world
that sees precious few.

Chris
Parsons
Diageo,
Vice President for Scotch & Irish
Whiskeys
We’re delighted to have picked up Bushmills, which we feel
has huge potential for long- term growth. Our ambition over
the first year has been building awareness, as many
Americans haven’t tried the brand as yet. We have
credentials with this brand included with the malts. That
Bushmills has been licensed since 16O8 is amazing to us,
even with our history of so many ancient and venerable
brands. As we approach 2OO8 we’ll have a big
quadri-centennial celebration in mind. The products are
different from Scotch whisky, as Bushmills [as all Irish
whiskey] is a lot smoother due to triple
distillation.

I had the good
fortune to visit the Bushmills distillery and came away
amazed that their focus on quality and a sense of detail
that is nearly extravagant. Basically, when you make a
Scotch, you mature the whisky in used bourbon barrels that
for the most part are brought in on an ad hoc basis. But
Irish whiskey, being triple distilled, is more susceptible
to flavoring from various woods. Bushmills
[atypically] has a very specific procedure where
they go to the forests in the United States where they
select the right kinds of oak from the right trees and then
[contract with certain] bourbon manufacturers who
then fill them with bourbon. It’s all hush-hush and they
don’t divulge which distillers. These specific barrels are
earmarked for shipment to Bushmills. They’re making very
sure that the wood is matured and used
appropriately.

Beyond aging and
barrel selection, the personality of the Irish is a factor.
As we’ve been handling Guinness and Bailey’s for some time,
we know it’s easy to get sucked into the passion and
enjoyment of the Irish people. We recognize that fact and
appreciate it. Consumer motivation of drinking Johnnie
Walker is status-full and cachet. Irish does not have the
baggage of Scotch – stuffy, with an older inventory and
clientele – and that’s better to strike a chord with the 24+
consumers. As they move on from American whiskys, they may
just want to step up with something smoother, with an
international heritage.

Advertising is a
part of what we do, and we’re now developing campaigns in
which Irish ‘charm’ comes across in a tongue-in-cheek but
engaging manner. We’re focusing on print and on-line media
over the next 6 months. We’re targeting many mainstream
publications but also the cutting edge, such as fader (a
life-style and modern music magazine) and making efforts at
podcasting. Pepsi has used a graffiti approach to good
effect. Our global group that manages international
cross-marketing is beginning to work on a website, but it
may not be up in the very near future. We’re indexing
opinion-forming crowds.

Dynamics between
high-end and mid-range is not a huge crossover with this
brand, as smoother choices are in the offing in both.
Bushmills original and Black Bush (which makes an older age
statement with sherry cask blending) are quality blends; the
three single malts (1O-, 16- and 21-year) still are very
effective as different combinations of whiskeys and barrels.
Our 1O-year malt won Best Irish by the new york times. The
16- and 21-year are small-batch whiskeys.

Bushmills would
be the younger consumers’ next move. Scotch’s profile is
more for an older crowd. Jameson’s has made the most of
moving from North American whiskies but not for Scotch. In
the same vein, Bushmills may have more of the fun and
engaging characteristics of North American whisky. We’re
being cautious around our responsibility consumption message
with the 24+ crowd.

We’re pleased
with our performance so far with Bushmills: about a year
through August, and coming into a big company like Diageo,
we were pleased with the way we were able to drive passion
behind its coming in. But we’ve also seen gains in the
marketplace over the last two four-week periods of summer
(our best data source) – consumer poll data shows 2O.4% and
25.4% growth. We’re starting to see actual share
gains.

JAMESON
Though Pernod Ricard’s Irish whiskey brand Jameson reached
the 2 million-case mark recently, their sale of Bushmills
last year to Diageo lets them redouble the focus on Jameson.
Pernod Ricard sees Jameson as competing with other spirits
brands internationally, and not other Irish whiskeys. Their
dedication to heavy advertising moreover is targeting
Jameson’s sales to nearly doubling to 3.5m cases by 2OO9.
This is no new concept with the brand: in the mid 199Os the
hoary “Spirit of Ireland” campaign helped Jameson become the
world’s fastest growing international spirit and fastest
growing whiskey. Then the “What’s The Rush?” campaign
stressed the importance of people stretching out to enjoy
themselves with friends in the face of increasingly frenetic
lifestyles. Jameson grew more than 2O% in the US in 2OO5,
with sales in travel retail up 16%. South Africa grew by
4O%; Russia’s sales doubled, as it did in 2O+ principal
markets worldwide (led by Ireland, USA, UK, France, and
Spain). Last year, the company put 4O million euro (US $5O.8
million) behind Jameson, launching the ongoing “Beyond the
Obvious” campaign.

Larry
Neuringer
Jameson
Brand Director, Pernod Ricard
The Irish Whiskey category is growing at double-digit rates,
faster than any other spirits category. This growth is
driven primarily by one brand – Jameson Irish Whiskey. In
2OO5, Jameson grew more than 2O% and now represents more
than 6O% share of the category. Jameson has become
synonymous with Irish Whisky therefore, growth potential for
this iconic brand lies outside the category rather than from
stealing share within the category.

To support
continued growth of both the category and the brand, Jameson
has established a marketing plan that is dedicated to
building the brand year ’round not just around St. Patrick’s
Day. Jameson marketing initiatives are focused in three
areas: Building brand awareness – at 3O% awareness it’s
still a discovery brand; Recruiting new consumers through an
aggressive on-premise promotional campaign; and Befriending
bartenders – bartenders love Jameson. 53% of consumers are
undecided on a brand when they reach a bar so bartenders
have a key role in initiating trial.

Jameson will
continue to run the current “It Could Just Be the Taste” ad
campaign. While the campaign positions Jameson as a whiskey
from Ireland the individual executions reinforce Jameson
great taste and approachability.

With the
cocktail culture still in full swing, many brown spirits
have turned to mixability (that is, cocktails) as a platform
to increase awareness and trial for their brands. Research
shows that consumers in general and distilled spirits
drinkers between the ages of 2O to 35 are being bombarded
with messages on email, cell phones and text messages.
They’re therefore looking for something authentic, which is
where Jameson is positioned.

When talking
Irish whiskey, we are really talking Jameson. With its 6O%
share and six consecutive years of double-digit growth,
Jameson has become the category and has single-handedly
driven interest and awareness in Irish whisky resulting in a
‘cult’ status.

High-end Irish
brands such as Midleton Very Rare and Redbreast have
capitalized on the trend towards premiumization, or drinking
better. In 2OO3, Jameson launched Jameson 18-year-old, a
super-premium Irish whiskey that offers consumers an
authentic and great tasting alternative from the category
leader while providing the trade with the opportunity to
leverage Jameson’s reputation and scale to grow category
sales. While there is definitely opportunity in the high-end
segment, Jameson’s standard still remains a priority with
significant growth potential to tap.

REST
o’ the PACK The
Irish whiskey also-rans are running pretty hard in a full
field. Alphabetically, they include Clontarf, Connemara,
Knappogue Castle, Erin Go Bragh (try and find it, challenges
Eric Asimov), Green Spot, Michael Collins, Paddy’s, Powers
(a big favorite on the Old Sod), Midleton, Redbreast (superb
pot-still finally available in US), Tullamore Dew, and
Tyrconnell. A voice representing these smaller Irish
share-holders is Kelly Spillane of Castle Brands, who takes
a benevolent view of the corporate horse-race between
Jameson and Bushmills.

Kelly
Spillane
Executive
Vice-President of Sales, Castle
Brands
Our basic marketing strategy is two-fold. With Clontarf, our
popular-priced blend at $2O, our marketing goes for mass
distribution, entry-level drinkers. Here Irish is one of the
most approachable (sweet and with personality) whereas
Scotch has a more smoky, peaty taste that is more acquired.
But Knappogue Castle is a vintage-dated Irish single malt
(one of only a few versus the very cluttered field of 5OO
Scotch single-malts); this Irish will give consumers a
different taste altogether with every bit of style. We
really get to stand out here, as Knappogue’s profile changes
year to year, though it’s typically light in color but
full-bodied. We have enough 1994 (minimum 9-year whiskey) to
last us through March, then on to the 1995. It will be
longer-aged (minimum 1O-year, with some 11-year whiskey):
more age will make it slightly heavier and also darker. We
insist on no caramel added and no chill filtering.
(Distillers chill filter to remove impurities or cogeners;
you don’t miss them in vodka, but they give whiskey much of
its character.)

Now the Irish
category has grown in itself faster than any brown category
over the last five years. In many stores, you still do see
it lost among the Scotches and browns. But Pernod-Ricard has
done a lot to isolate Jameson on the shelves, and we’re
trying to carve out shelf space, too. The front-runners are
Jameson and Bushmills, but there are 15 other pretty good
runners, among them our three Clontarf SKUs [Premium,
Reserve and Single Malt] and Knappogue Castle. Retailers
now have the ability to break out sections, and their
biggest reason for doing so is this explosion of quality
Irish entries.

The category of
“cult whisky” is not in the vocabulary of Pernod-Ricard and
Diageo. That the two of them have taken such a big stake in
the category makes a loud statement that Irish is here to
stay. Other benefits: Pernod-Ricard has made huge financial
commitments in advertising, and its repackagings have given
the whole category a chance to put out several products that
are good choices. Irish will be making a serious dent in the
high-end market! It’s already doing it – over last 5 years,
double-digit growth shows that people are coming to it. And
it’s not just those established urban areas – or traditional
Irish strongholds – like Chicago, Boston, Philadelphia, and
New York, either. California is Irish’s biggest market, and
Florida is right up there.

BOSTON
SPIN Boston’s local
angle was sounded with queries to sources in on- and
off-premise. Angus O’Leary, owner and head bartender at
O’Leary’s in Brookline, reckons that of Irish whiskeys,
“Jameson is the most popular, by far, and Bushmills is
next.” Among the premium Irish bottlings, he says there’s
relatively brisk sales in Jameson 178O.

When I call Brix
in Boston’s South End, I spoke with their spirits
specialist, Andrew Deitz. “Personally, I tend to drink more
Scotch, but I do love the purist quality of Irish. Irish
whiskeys tend to have more acidity and often exhibit a
stronger nutty component on the mid-palate, somewhat like
the lowland malts of Scotland, and sometimes have a light
briny character like malts from Campbelltown, like
Springbank. Generally, Irish Malts use less peat and sherry
in production so they tend to be less smoky and iodine-y
than malts from Islay and less fruity and rich than malts
from Speyside. One of the best out there is Knappogue. To
me, the 1994 Castle Single Malt Whiskey seems to be an
amazing value at $38. With the Scotch malts you can find
some incredible bargains going through independent bottlers
(rather than buying directly from distilleries such as
Macallan or Laphroaig), such as Andrew Symington’s Signatory
and Gordon & McPhail; they carry some rare bottlings in
craft styles that truly express the classic characteristics
of the malt, that is, not over-sherried or over-peated. I
haven’t found any such bottlers yet for Irish malts. Though
but they’re rather expensive, I do like the Connemaras;
they’re great for an Islay malt drinker (such as Laphroaig
or Lagavulin) who wants a whiskey with a little more subdued
peat. Black Bush, in the richer Irish whiskey style, is not
preferred by our customers. If people look for a lighter
blended style, they’re likely to go to Bushmills,” says
Andrew.