Around 55% of the growth in exports in 2019 came from the Irish whiskey category, which now accounts for around half of drinks exports (a total of €727m), according to the latest figures from Bord Bia, Ireland’s food board.
The US is the key market for Irish beverage exports: accounting for 40% of exports in 2019 to a value of €676m ($750m). Whiskey dominates exports to the US, with premium products driving growth.
However, Bord Bia warns that the trade war between the EU and US could result in further expansion of tariffs, which could affect Irish whiskey.
Tariffs ‘undoubtedly represent a setback’
Tariffs are already challenging the Irish cream liqueur sector: dairy-related tariffs imposed by US authorities on EU products have impacted Irish cream liqueur exports.
“Notwithstanding the issues of tariffs that now present a genuine impediment to growth for Ireland’s cream liqueur sector in the US, America’s strong performance and central role in the success of Irish beverages is likely to continue in 2020. Whiskey will continue to be the mainstay of that growth.
“The development of new distilleries and whiskey offering in Ireland speaks to the general positivity in the sector, which can reasonably be said to have been transformed in the space of a decade.
“However, the dependence for much of this growth on the US market brings its own risks, particularly in light of the potential for the sector to be inadvertently caught up in global trade disputes.
“For Irish cream liqueur producers, the challenges currently presented by the North American market undoubtedly represent a setback. The industry will redouble its efforts to remain competitive and recalibrate its marketing strategy accordingly. Assistance for the cream liqueurs category will be a priority for Bord Bia’s spirits strategy in 2020, which will commit to protecting existing business while developing new opportunities.”
GIs and Brexit
Gin has been a strong export performer for Ireland in recent years, albeit starting from a low base. Exports in 2019 rose 17% growth to €9m.
“While the continued popularity of gin among UK consumers, and its central role in the pervading cocktail culture, means growth can be expected to continue through to 2020. The US is a market with growing possibility for some manufacturers. Although a niche offering in the Irish export context, it has a part to play in the overall diversity of the sector.”
Although the UK is less important for Irish beverages than other export industries, Brexit remains a ‘significant concern’ - particularly given the good performance of whiskey, cider and gin in 2019.
Leaving the EU will also mean removing participation in the EU’s protected geographical indication designation scheme, which covers Irish whiskey among other beverages.
Key markets for Irish drinks
The US accounted for 40% of Irish drinks exports in 2019 to a value of €676m.
Irish exports to EU markets increased by 10% to €418m. Exports to France rose 45% to €86m; and exports to Germany also increased 20% to €84m; and exports to The Netherlands rose 51% to €34m (although the country’s role as a global trading hub means a substantial amount was for onward export).
Latvia remained an important market, although declined 13% in value to €48m.
Canada, an important market for cream liqueur and an increasing one for whiskey, saw a 2% increase in exports to €72m.