Apart from increased export earnings, Jameson’s phenomenal sales growth has important spin-offs for Irish agriculture and the rural community, as well as creating a slipstream opportunity for other Irish whiskey brands.

€100m investment

To meet the growing demand for Jameson, Irish Distillers – owned since 1988 by French drinks giant Pernod Ricard – is currently investing €100m to double production capacity at the Midleton distillery, where the company’s entire Irish range – Jameson, Paddy and Powers – is produced.

A further €100m is being spent developing a new satellite maturation facility at Dungourney, Co Cork, bringing the total investment to €200m.

When I toured the Midleton distillery recently in the company of general manager Tommy Keane, it was a hive of activity as teams of construction firms – mostly local – strove to meet a March 2013 deadline to have the “pot still” component of the new distillery completed.

The 120-acre site, which opened as a greenfield operation in 1975, has an invaluable heritage as it adjoins the original Midleton distillery – built in 1825 but perfectly preserved.

Visitor Centre

This is now a popular visitor centre that attracts 100,000 visitors per year in tandem with a similar Jameson visitor centre in the original Jameson Distillery on Bow Street in Dublin’s Smithfield.

Jameson Irish whiskey is now a global phenomenon achieving 23 years of consecutive growth; reaching the milestone of 4m cases in 2012 (a case is equivalent to 9 litres).

Of course, whiskey needs time to mature. Each year, three new warehouses are built in Midleton and filled with 33,000 two hundred litre casks. Due to consistent sales growth, the 120-acre site, now packed with 43 warehouses, will reach capacity by August (see main picture).

With a five year maturation process for many of the components of Jameson Irish whiskey, today’s production is geared to meet projected annual demand of 6m cases in 2016 and 8m cases by 2018/2019.

A few miles out the road at Dungourney, a massive new warehouse complex is being created to cope with the next phase of growth and remove the risk associated with holding all Jameson production on one site. The first warehouses in this 85 acre facility, nestled 1 mile from the road in a forest purchased from Coillte, are due to be filled in October 2013.

BRAND PROMOTION

Global giant Pernod Ricard of France owns Jameson and has invested heavily in driving its march to number 25 in the wor ld’s top alcohol brands. Their focus on consistent marketing has seen an estimated €70m per year invested in promoting the brand globally.

The investment and global distribution network is paying massive dividends for Jameson; the brand was selling just 466,000 cases per year in 1988 when it was acquired by the French drinks giant.

When I asked general manager Tommy Keane if it was prudent to base massive expansion on forecasts that could prove to be based on a fad, he explained that the brand has grown consistently for 23 years in succession.

“All of the forecasts over the past 10 years have delivered,” he explained.

“Jameson is selling to 120 markets worldwide, with double digit growth in 51,” he added. “The Irish whiskey category – led by Jameson – is the fastest growing whiskey category in the world, but we are growing off a very small base. The Scottish industry is 20 times our size”.

For instance, Diageo’s Johnnie Walker brand sells 18m cases per year, while there are 11 Scotch whiskey brands selling over 2m cases per annum.

Keane oozes enthusiasm for the Jameson brand, but is also passionate about the distillery’s local contribution. For Irish grain farmers, the distillery is an important buyer of Irish barley and malt, with a current annual requirement for around 35,000 tonnes. The main supplier of malt is the Cork based Malting Company of Ireland, which is owned by Dairygold and Glanbia. Athy based Boortmalt also supply malt.

A further 50,000 tonnes of maize grain is imported annually from the south of France. Tommy Keane maintains that ripe grain of its type cannot be grown in Ireland, with the Scottish industry also importing from the same source.

The good news is that the current investment will increase the proportion of Irish grain ingredients used by Irish Distillers.

Tommy Keane explains that Midleton produced 34m litres of alcohol in 2012 using two processes – 22.6m of “grain whiskey” and over 11m litres of “pot whiskey”.

“The investments underway will double our distilling capacity for pot still whiskey from 11m to 22m litres per annum,” Tommy Keane explained.

Pot stills utilise more barley and malt. This investment will also double grain distilling capacity to 44m litres of grain whiskey.

The feed industry in Ireland will also benefit from continued growth of Jameson – each year 46,000 tonnes of wet and dry distillers grain by-products are sold from Midleton to Pat Denns, McDonnell Brothers, Dairygold and others.

So Irish farmers, and the east Cork region in particular, have plenty of reasons to hope that the stunning Jameson success story continues.

KEY POINTS

Jameson Midleton

Original distillery operated in Midleton from 1825 until 1975, but is now a visitor centre.

Current 120-acre distillery site opened in July 1975.

111 full time staff at Midleton distillery; expansion will add 30 and another 30 in bottling.

Bottling is undertaken at Fox & Geese in Dublin.

Irish Distillers Group was formed in 1966, after a merger between Irish whiskey distillers John Power & Son, John Jameson & Son and the Cork Distillery Company.

After a complex takeover battle, publicly quoted Irish Distillers was acquired by French-based Pernod Ricard in 1988.

Having begun whiskey production in 1781, Jameson’s Bow Street distillery in Dublin closed in 1971, with production transferred to Midleton.

Current distillery produces 22.6m litres per year of grain whiskey and 11m litres per year of pot still whiskey.

The Midleton distillery operates on a 24 hour basis for 47 weeks of the year, closing for Christmas and Summer maintenance.

1m casks currently maturing on site in 43 warehouses (new warehouses contain 33,000 casks). Each cask holds 200 litres.

Estimated €60m annual contribution to local economy each year, including 35,000 tonnes of barley and malt.

Primary malt supplier is Cork based Malting Company of Ireland (owned by Glanbia and Dairygold).

A tonne of dry maize produces 495 litres of alcohol, while a dry tonne of barley produces 410 litres.

Jameson, Powers and Paddy brands produced from Midleton, as well as numerous sub-brands and aged products.

Jameson has a 63% share of the Irish whiskey category.

Sales volume increased 15%, with value growth up 18% in the year ending June 2012.

Sales value in 2011 grew 29% in the USA (now over 1m cases per year), with 49 of the 50 states in double digit growth.