Despite a rebound in 2021, notably in the US, Irish whiskey may be increasingly challenged by RTDs and world whiskies. A more diverse geographic reach could help the category sustain growth and avoid saturation, for which Irish whiskey brands will also continue building premium credentials and innovating to create distinct attributes beyond aged expressions. While shifts in drinking habits may intensify challenges to the category, they also open up possibilities for cross-category reinvention.
This report comes in PPT.
Following years when its growth trajectory seemed almost gravity-defying, Irish whiskey’s COVID-19-induced downturn has proved to be short-lived, with a strong rebound seen in 2021, particularly in its largest market, the US. However, the category is set to reach a greater maturity and may be increasingly challenged by RTDs and other spirits, notably world whiskies.
Although North American and European markets are not fully mature and retain potential for growth, notably Germany and Poland, a more diverse geographic reach, notably by focusing on expansion in Asia Pacific and Latin America, will be increasingly essential for Irish whiskey to sustain growth momentum and avoid saturation as the category becomes more crowded.
Due to the limited amount of aged expressions available, Irish whiskey brands have successfully innovated in creating distinct types of premium positioning ranging from the archetypical Irish whiskey style, single pot still to the innovative uses of cask ageing. Whether brands are entirely new or have a long heritage, they will remain focused on authenticity, history and provenance.
While competition with whiskies of other origins and spirit-based RTDs is expected to intensify, this presents not only challenges for Irish whiskey but also opens possibilities for cross-category innovations, through new flavours, new cask ageing methods and limited editions, notably through potential collaborations with Japanese whisky, US whiskey and stout beer.
The long-term trend towards preparing cocktails at home may lead spirits players to target new consumption occasions through new recipes and packaging and brings potential for flavoured whiskies. The rise of sober-curious consumers and moderate alcohol use among young adults may encourage further shift towards drinking less but better and may favour RTDs over spirits.
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
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