Sláinte! Why Irish whiskey sales have soared to over $1 billion a year in the U.S.

By Charles Passy

The St. Patrick's Day favorite has grown in popularity over the past 20 years - and seems poised for more growth

A couple of decades ago, Americans in search of a sip of Irish whiskey would typically find no more than a couple of brands behind the bar or on liquor-store shelves. The category was all but forgotten, far eclipsed by the likes of Scotch or Canadian whisky, to say nothing of good ol' American bourbon.

But as we head into another St. Patrick's Day celebration, it's clear the tide has turned.

Irish whiskey (and yes, when referring to the Irish category, whiskey is spelled with an "e") has become a dominant force on the U.S. spirits scene: Annual category sales in this country - Ireland's biggest whiskey export market - have risen over the past 20 years by an impressive 1,482%, to roughly $1.1 billion in 2023 alone, based on supplier revenue, according to the Distilled Spirits Council of the United States. And to meet demand, the number of distilleries in Ireland has skyrocketed in recent years from just a few to close to 50, industry experts note.

Brands have expanded their portfolios and output as well. Jameson, arguably the best-known name in Irish whiskey, now offers everything from a Caskmates series of whiskey aged in beer-seasoned barrels to a line of canned cocktails. Production has soared over the years from half a million cases annually to north of 12 million, according to Conor McQuaid, chairman and CEO of Pernod Ricard USA (FR:RI), the American arm of the global spirits conglomerate behind the brand.

"It's been a helluva growth curve," McQuaid told MarketWatch.

Perhaps even more remarkable: The curve could continue in the years ahead. Brands are making major investments with an eye on the future. Bushmills, another of the best-known names in Irish whiskey and a brand owned by Proximo Spirits, also a liquor conglomerate, is going ahead with a $70 million expansion of its production facilities.

"That shows our commitment" to the Irish category, said Lander Otegui, chief marketing officer of Proximo, a company otherwise known for being behind Jose Cuervo tequila.

'It's been a helluva growth curve.'Conor McQuaid, chairman and CEO of Pernod Ricard USA, on the success of Irish whiskey

Brands are also becoming increasingly innovative. Irish whiskey has long been recognized for certain styles - whiskeys made with barley, malted or unmalted, or grain (or sometimes a blend of the two). But these days, seemingly anything goes in terms of what's in the spirit or how it's aged.

The Jameson Caskmates series is one example, but there are plenty of others. Powers, another brand that's part of the Pernod Ricard portfolio, has introduced what it believes is the first-ever Irish whiskey made from 100% rye. On top of that, the brand is promoting the idea of using the rye-based spirit in a Manhattan cocktail, an effort to show the world that Irish whiskey can lend itself to boozy drinks beyond Irish coffee.

And in what might be considered the final frontier for Irish whiskey, brands are offering rare and limited-edition releases that carry hefty price tags, just as Scotch brands have long done. Bushmills released a 44-year-old whiskey, exclusively for the Dubai market, with a $12,000 cost. Midleton, yet another Pernod Ricard Irish brand, is one of the few Irish whiskies with a history of special releases, but it recently pushed the envelope with a special bejeweled bottling of a 40th anniversary edition that sold for $120,000 at auction.

In some ways, this newfound interest in Irish whiskey is a harkening back to the category's glory days.

Irish whiskey is considered one of the earliest distilled spirits to be produced in Europe, with a history dating back to the 12th Century, according to the Pot Still website. (The pot still, a type of distillation apparatus, was long used in making Irish whiskey and is still preferred by some producers today.) Jump ahead to the 19th Century and Irish whiskey was the most popular style of whiskey in the world, with a few producers leading the way, including Jameson.

But there was a reversal of fortune starting in the late 19th Century, with various economic and other factors playing into the decline, from overproduction to the Prohibition era in the U.S. By the 1960s, the category was in such trouble that the handful of remaining distillers joined forces, establishing the Irish Distillers company - the same company that eventually became part of Pernod Ricard.

"They had forgotten they had invented whiskey," said veteran spirits authority Robin Robinson of the state of affairs for the Irish whiskey industry during those dark days.

What changed? Irish whiskey has always been known to have a highly drinkable quality, without some of the edge or smokiness that can be found in Scotch. That may be something of a generality, since there's great variety in both Irish whiskey and Scotch. But experts say that those new to whiskey certainly appreciated the approachability of much of the Irish product and began to embrace it as an alternative to those full-flavored single-malt Scotches that had been all the rage for a while.

But drinkers didn't necessarily find their way to the category - and to individual brands - on their own. Jameson, in particular, played a major role in promoting itself, beginning with a campaign to educate bartenders about the brand starting in the late '90s, according to Pernod Ricard's McQuaid. And a popular television spot, depicting brand founder John Jameson diving into the sea to save a barrel from being lost forever, helped cement the brand's popularity.

McQuaid adds that Jameson also started to find its way into pop culture - specifically in such TV shows as "The Wire" and "Mad Men."

"It was of the moment," he said.

But how long can the moment last? Some question if Irish whiskey can really continue to grow. Noah Rothbaum, another spirits authority and author of the forthcoming "Whiskey Bible," says the fact that the category has broadened so much may work against it, since drinkers have become accustomed to a certain style of Irish whiskey that's indeed all about drinkability.

"We used to say it was smooth and honey-like. Now all those things have to be qualified with the word 'usually,'" Rothbaum said.

Naturally, those in the industry dispute the idea of any kind of retrenchment. And they say that Irish whiskey will always have a certain signature character, especially stemming from the fact that Ireland's relatively temperate climate ensures that during the aging process.

"I haven't come across an Irish whiskey that doesn't have that signature softness," said Jack Teeling, founder of the Teeling Whiskey Company, another Irish producer to emerge in recent years.

Plus, Irish whiskey has the benefit of St. Patrick's Day, an occasion when all the world wants to celebrate Irish culture - and by extension Irish food and drink. Aidan Mehigan, founder of Natterjack Irish Whiskey, an upstart brand, says the March holiday is like having a second Christmas on the calendar for Irish whiskey producers.

"It puts everyone's eyes on us," he said.

-Charles Passy

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-18-24 1014ET

Copyright (c) 2024 Dow Jones & Company, Inc.