Manufacturing & Supply Chain

Drinks Ireland/Spirits, the Ibec representative group for the wider spirits sector in Ireland, has published its annual Spirits Report. The figures published show the total export value of the sector was €1.3 billion, which represented a 9% decline on the previous year. This decline is attributed to a highly competitive global market and tough economic headwinds which have complicated the market for drinks categories worldwide. The long-term trajectory of the sector remains growth-oriented, but government support and a fair and balance regulatory environment will be crucial moving forward.

Strong export growth has been achieved by Irish Spirits (Irish Whiskey, Gin, Irish Cream and Poitín) over the last decade, which has delivered significant economic contribution, created jobs, and indeed increased tourism visits throughout the island of Ireland.

However, since early 2023, key factors that contributed to more challenging export market conditions include higher inflation levels and cost-of-living, driving higher interest rates, leading to weaker consumer spending. While our sector has strong future growth ambitions, it is clear that progress cannot be taken for granted and businesses need a supportive environment to deliver for the future.

Domestically, Irish Spirits volume sales were marginally down by 1.4% in 2023, reflecting general trends in alcohol consumption here. Vodka, followed by Irish Whiskey, Gin, Rum and Irish Creams were the most popular categories at home.

Irish Whiskey exported 14.9 million cases in 2023. However, the export value of the category declined by -14% to €875m, due in large part to the challenging market conditions outlined above. The overall growth trajectory for this sector remains positive, and this short-term decline should be viewed in the context of 2022 sales of Irish Whiskey leaping by almost €200m (+25%) versus 2021 to €1bn in value.

The United States continues to be the key export destination for Irish Whiskey, accounting for more than one in three bottles of total global sales. Poland has become a significant market, surpassing both Ireland and the United Kingdom to become the second largest, with 16% growth in 2023. Consequently, and even with an increase of 6.7% in 2023, the United Kingdom dropped to the fourth largest market globally for Irish Whiskey.

Other key findings in the report include:

• Irish Cream saw sales of 9.5m cases with export value down by 8.7% to €370m in 2023. Drinks Ireland continues to work on the international protection of the Irish Cream geographic indication (GI) status, especially in North America.
• Cases sales of Irish Poitín rose by 13.5% in 2023, reflecting growing interest domestically and internationally. Drinks Ireland, with support from Bord Bia and Invest NI, is launching a new marketing campaign to further develop the category.
• Sales in Ireland of Gin experienced a decline of 6%. However, the premium end of the market, where many Irish producers operate, continues to perform well. In 2023, premium gins represented 32% of the Irish Gin Market, an increase from 22% in 2019.
• Vodka sales in Ireland declined in 2023 to end down by 1.2% vs 2022. However, sales of premium Vodkas doubled in share in 2023 compared with 2019.
• Ireland continues to have some of the highest excise rates on alcohol across Europe.

Irish Spirits continue to lead the way in the premiumisation trend, innovating to offer consumers high quality choices and responding to changing consumer trends in alcohol consumption – that those who choose to drink are drinking less, but better. This trend is reflected in Ireland, where overall per capita consumption has declined 30% in the past two decades.

Commenting on the report, Director of Drinks Ireland/Spirits Aengus King stated: “The Irish Spirits sector has delivered phenomenal export growth over recent years, and while confronted with challenging international markets at present, has strong ambitions for future growth that will deliver for regional economic development. Sustaining businesses during challenging periods so that they continue to deliver to the wider economy in the future requires a supportive enterprise and regulatory environment. We depend on government and state agencies to work with us to ensure the best possible market access internationally, including the avoidance of tariff barriers; the protection of our important geographic indication (GI) status for Irish Whiskey, Irish Cream, and Poitín across global markets; and increased investment through state agencies and support for exporters for export promotion and development.”

Chair of Drinks Ireland/Spirits and the founder of Rademon Estate Distillery in Co Down, David Boyd-Armstrong, said: “As a distiller, I, like my fellow distillers and spirits producers dotted all over the island, have an ambition for further growth and a hope for the future. Despite the current market conditions, I am encouraged that growth is expected to return in the period ahead. However, we need the right encouragement and supports to sustain businesses and ensure a return to this place of growth.

“The last decade has been wholly positive, with Spirits exports in particular lauded as a key all-island economic success story, not just for exports, but for job creation, innovation and investment that have had both positive direct and indirect economic impact. Now, as increased international competition and the cost of doing business are biting, we cannot afford to be complacent.

“While still robust, Irish Spirits need support and promotion to build on the progress already made, and this must be underpinned by a fair and balanced regulatory environment.”