The Irish drinks industry is famous worldwide. Irish whiskey and Guinness are household names across the world. Irish whiskey, in particular, has seen massive growth in recent years.

At the centre of the selling points of these brands are the Irish farmers who grow a key ingredient – the grain. However, it surprises many to hear that a large proportion of Irish drinks output is not produced from Irish grain.

In this article, the Irish Farmers Journal examines the amount of grain used in the drinks industry, the main buyers of that grain and producers of malt and other grain products, as well as the imported grain used in the production of these drinks.

What grain do Irish farmers produce for the drinks industry?

According to a report from Tillage Industry Ireland, farmers in Ireland grew 40,200ha of malting barley per annum from 2014 to 2018. This area will have increased slightly since then.

Irish farmers produce malting barley which can be divided into two categories – brewing and distilling. Some feed barley is also supplied, along with barley for roasting, which is used in beer production. The Crops 2030 report estimated that 300,000t of Irish barley are used by the drinks industry each year. Some 220,000t of this is malting barley, 35,000t is feed barley and 45,000t is roasting barley.

Drinks Ireland states that more than two-thirds of the grain used by the brewing and distilling sectors is Irish. However, there are dramatic differences between producers in the amounts of Irish grain used.

Maltsters

A large majority of the grain is initially turned into malt. There are two main maltsters in Ireland – Boortmalt and the Malting Company of Ireland (MCI). There are also some small maltsters.

Boortmalt is by far the largest producer here in Ireland, with a capacity to take in 180,000t of barley.

Boortmalt is actually the largest maltster in the world since it purchased Cargill’s malting business in 2019. The company has 27 plants on five continents, producing three million tonnes of malt each year.

It is owned by the French farmers’ co-operative, Axereal. The company came to Ireland in 2010 when it purchased Greencore’s malting business.

Boortmalt previously had branches dotted around the country. Now a large amount of its grain is assembled by merchants across the country and sold to Boortmalt via the grain merchant rather than the farmer.

The MCI is supplied by Dairygold and Glanbia. MCI takes in approximately 42,000t of malting barley each year.

Drinks industry

Over the past decade, the Irish drinks industry has seen huge growth. In 2010, there were just four operational distilleries in Ireland; there are now 39. In 2012, there were 17 breweries. This climbed to 64 in 2016 and to 77 in 2021.

Diageo (the home of Guinness) and Heineken are the two big ones, while there are 75 micro-breweries, which carry 125 micro-brewing brands, according to the latest Bord Bia report from 2018.

In 2019, Diageo used approximately 144,000t of Irish barley, 10% of the country’s barley crop and almost 50% of the barley used by the entire drinks industry.

Irish barley

Between 2014 and 2018, Boortmalt was estimated to handle approximately 125,000t of malting barley per anum, which was transformed into approximately 100,000t of malt. This figure has since increased to 180,000t of green barley intake capacity.

The report estimated that, on average, 7% of the 40,200ha of malting barley does not meet malting specifications and is sold as feed barley. In the period 2014-2018, the average premium for malting over feed was €23/t and €10/t was paid for roasting barley.

In 2020, the harvest base price for malting barley was approximately €27/t over feed at Glanbia and €30/t over feed at Dairygold (input purchases, transport and shareholdings may affect these prices).

From 2014 to 2018, an estimated 127,000t of malt was produced per year from Irish malting barley, with a total of 137,000t of malt produced including imported barley. Since that time, Boortmalt has expanded its capacity in Athy to malt an additional 30,000t at its new Buhler maltings plant, which was commissioned in January 2020.

Approximately 93% of the malt produced in Ireland is used in Ireland but about 10,000t of that malt is produced from imported barley, according to the Tillage Industry Ireland report. There are also some malt imports into the country.

Malt imports increased to 66,506t in 2019. This spike in imports coincided with the collapse of a malting steep at the Boortmalt plant in July 2019. In 2020, imports returned to 23,353t. So far in 2021, malt imports are down significantly at just over 2,000t from January to May.

Barley is not the only grain used in the drinks industry and it has been conservatively estimated that approximately 115,000t of maize is imported for use in distilling each year.

Much of this maize was originally thought to come from France, but import figures in the past number of years show significantly less maize being imported from France. Over 90% of the maize imported into the Republic of Ireland comes from Canada, Ukraine, Brazil, and France, plus Northern Ireland and Britain, even though they don’t produce maize grain. Product transiting through Britain and Northern Ireland is not documented for origin by the Central Statistics Office. In 2020, just 52,289t of maize grain came from France.

There are no official figures available on the amount of maize or barley imported for use in the drinks industry. While this grain is subject to testing, neither the Department of Agriculture nor the Food Safety Authority could detail to the Irish Farmers Journal the exact numbers involved.

Carbon footprint

The Teagasc National Farm Survey put the carbon footprint of Irish tillage at 1.18t CO2eq/ha. However, over 70% of emissions on mainly tillage farms are associated with their cattle enterprises. It is worth noting that Irish Distillers pay a sustainability premium of €15/t on the non-malting barley they purchase.

Drinks Ireland called for a commitment to increase tillage area in the Agri-Food 2030 strategy. A statement to the Irish Farmers Journal from Drinks Ireland stated: “We still believe that this target requires more detailed definition, to include a focus on reversing the loss of land planted under spring barley.”

Terroir

One major breakthrough for Irish grain in recent times is from work carried out by Teagasc and Waterford Distillery, which has proven terroir exists in Irish grain and that different flavours can be tasted depending on where crops are grown.

This research was published in February 2021 and proved that soil type and local factors like a sea breeze, for example, can affect the taste of the new-make spirit produced from individual barley sources. Terroir is commonly used in French wine.

How has COVID-19 affected sales?

Drinks sales were hit badly by COVID-19 and while malting barley demand was reduced in some parts of the world, its price held close to €220/t (Free-On-Board Creil, July) over the course of the pandemic and demand is increasing once again. In Ireland, demand for distilling barley increased as brewing barley demand declined.

Figures from Revenue for the first quarter of 2021 showed that alcohol consumption had declined by 19.7% when compared to the same period in 2020.

Beer sales were down by 34.5%.

This is largely due to the fact that 60% of beer sales in Ireland are in pubs, restaurants and hotels. At the same time, spirit sales fell by 8.2%.

In 2020, alcohol sales in Ireland fell to their lowest levels in 30 years, declining by 6.6% on the year previous.

Exports were also affected. Irish beer exports fell by 17% in 2020, from €305m to €254m.

The biggest hit was on the US market, where exports dropped by 45%.

Sales of Irish whiskey went from 60m bottles in 2010 to 144m bottles in January 2020. Irish whiskey exports from the island of Ireland were valued at €890m in 2019.

According to Drinks Ireland, before the pandemic hit Irish drink exports travelled to 140 countries and were valued at €1.44bn in 2019, contributing €2.6bn in VAT and excise payments to the Exchequer.

Upcoming research

An increasing level of wheat is being used in whiskey production and research is continuing into its use, along with other grains, with some distilleries also using rye and oats to produce whiskey.

A research project is currently under way in Teagasc and the Institute of Technology Carlow to assess the usefulness of these grains. Wheat is thought to be one of the most suitable replacements for imported maize.