an editorial supplement to The Grocer
A class act
Demand for drinks with an Irish origin has never been greater. Tim Palmer reports on the commanding key brands and innovations that have created the success story
Alcohol and the prefix "Irish" are proving to be a good combination. In the UK, products with an Irish provenance got a big boost when Irish themed events and venues were the flavour of the month in the 1990s. But as these began to go out of favour, demand for Irish drinks has continued to increase.
Irish whiskey in the UK is comfortably outperforming its Scottish counterpart, although the volume sales are nowhere near as big. Stout sales have continued to grow in the last decade and the demand for cream liqueurs is increasing.
The big volumes in the drinks business are going to three key brands: Jameson, Guinness and Baileys, and underpinning them is a raft of activity from other players.
Pernod Ricard is developing Jameson into a brand with international stature and is spending £2m a year in the UK promoting it which is paying off. While the total whisky market was static last year, ACNielsen reports the Irish whiskey sector was 13% up in value and 10% up in volume and Jameson commands 75% of the UK's Irish whiskey sector.
Other Pernod Ricard brands, including Bushmills malt, Paddy's and Powers take a further slice and most of the rest is accounted for by the blossoming own label market. This is mostly supplied by another Irish success story Cooley Distillery. Based in the Cooley Mountains 60 miles north of Dublin, it brought out its first whiskey, Tyrconnell in 1993. Two years later it produced the first own label Irish whiskey, which went into Sainsbury. Its customers now include Tesco, Safeway, Waitrose, M&S, Morrison, Somerfield, CWS Group, Booker's and Oddbins.
Marketing manager John Hart says: "We opened up the category and made Irish whiskey available to a new audience and increased the consumer base. Jameson has done well since we came on the market."
And what works in one category does just as well in another. UDV's Irish cream liqueur Baileys has total command of its market, but thriving alongside it are a raft of own label products. Baileys was the UK's top selling spirit brand in November and December and is backed by a £7m marketing budget. Worldwide it sells 3.2m cases.
The rise of own label has made no impact. Most are produced by First Ireland Spirits which supplies all the major multiples except Sainsbury, and since it started in 1994, its volumes have grown 40% every year.
Managing director Joe Lynch says: "We have been good for the category. It has expanded as we have provided a recruitment level for new consumers."
First Ireland provides for international customers. It created the Shakers range of cocktails in resealable bags sold in Asda and Tesco and it is planning to launch a bottled version called Jive in the spring.
The Irish flair for producing alcohol in a variety of guises has led to a number of innovations.Three years ago Boru Irish Vodka Company came up with the country's first Irish vodka which is now on sale in 25 countries around the world. The company has already followed this up with a range extension into premixed drinks. It has added cranberry and grapefruit juice to the vodka to create Boru Rocks which is now on sale in the Irish Republic.
BawnÓr has created 22% abv Ór Irish schnapps. This was launched in the UK last year at the London International Wine Trade Fair.
Managing director Lucien Purcell says: "The UK market is critical and not an easy one to get into.
"The alcoholic strength of Ór is what people want, particularly women. Something which is not too strong with a good taste of its own."
In the UK market for Irish beer, Guinness is king. It accounts for the lion's share of the £108m stout market in the off-trade. Total stout sales in the UK are worth £1bn a year and represent 7% of the market. Stout's off-trade value and volume declined by 1% last year, in line with the total take home beer market. This mirrors the Irish beer market which is also flat.
Through innovative packaging such as the widget in both bottle and can and by bringing down the serving temperature, Guinness has maintained interest in the sector. Its high quality and heavyweight advertising have also kept the brand in the public eye.
Second place brand Murphy's, from Interbrew UK, has clawed a 14% value share of the take home business which it has continued to increase. It is also supported by significant levels of advertising.
On a totally different scale a collection of Irish micro brewers have been shipping beer to the UK. The biggest of them, Celtic Brew now sells 10,000 cases of the three brews in its Finians range in this country.
Head brewer Dean McGuinness started the business three and a half years ago and began selling to this country two years ago. Sales are growing at 400%. He says the brewery has capacity to produce 50,000 cases and it already has plans to expand.
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