Irish whiskey was once the most popular spirit in the world and, at its peak, there were 88 distilleries in the country. However, the forces of war, trade embargos and commerce took their toll and from the early 19th century, the industry declined so that only a handful of distilleries remained by the 1960s.

Each suffered from chronic under-funding, loss of confidence and lack of development.

This eventually led to the formation of Irish Distillers in 1966, when the remaining players – John Power & Son, John Jameson & Son and the Cork Distillery Company – decided to merge and fight together as one.

In a further attempt to remove duplication and combine resources, Irish Distillers decided to consolidate production on one site, at Midleton, Co Cork.

A number of years later, it acquired the Bushmills distillery in the north, effectively ensuring that one company controlled all whiskey distilling on the island.

Yet all this consolidation and home market dominance wasn’t enough to bring it back to the top of the world. By the 1980s, the Irish whiskey industry was on its knees, with just 1% share of the global market.

Meanwhile, with over 100 distilleries, its main competitor Scotch was booming, and capturing an ever-greater share.

But now after nearly 100 years of decline, Irish whiskey is making a comeback.

Today, the global whiskey market is worth €8bn and Scotch continues to dominate with a 60% share.

Ninety-five percent of our production is exported and, over the last 10 years, exports have grown 220%. Exports grew 14% last year to reach €307m, accounting for 4% of the global market.

Last year, Ireland exported 6.2 million nine-litre cases worldwide and this is expected to almost double to 12 million by 2020 and double again to 24 million by 2030.

The USA, which accounts for 45% of exports, is the largest market for Irish whiskey and offers the largest potential for growth due to the large Irish diaspora. Germany, France and the UK make up 20% of sales, with Russia making up a further 10%.

The surge in whiskey sales is being driven by changing consumer tastes in the US, where brown spirits have become popular with younger drinkers. A similar trend is happening in Russia and Europe, where a growing number of drinkers are moving from vodka to whiskey.

Investment

Thanks to investment by multinational companies, such as Pernod Ricard, William Grant & Sons and Diageo, in Irish whiskey brands, consumers around the world are slowly learning about the heritage and mellow taste of Irish whiskey. For example, William Grant & Sons bought Tullamore D.E.W. for €171m in 2010 and Beam bought Cooley for €95m in 2012.

As the resurgence of the category continues, new players are also coming into the field, adding to the three distillers. The industry is set to invest €1.1bn in Ireland in the next 10 years, with more than a dozen new distilleries planned.

Last year, Irish Distillers cut the ribbon on an upgraded Middelton distillery at a cost of €200m.

John Teeling, the former owner of Cooley, is investing €45m in two new distilleries in Dublin and Dundalk on the old Diageo site.

Walsh Whiskey also recently turned the sod on a €25m distillery in Carlow and last week, the first whiskey flowed into casks at the opening of a new €35m distillery at Tullamore D.E.W.

Heritage

There is a resurgence in demand for traditional products such as whiskey in developed markets. But to be called either Irish or Scotch, the whiskey must be distilled and aged in their respective countries.

The main difference between Scotch and Irish is the distillation process. Scotch is distilled twice, while Irish is distilled three times, giving it a more mellow flavour.

Immediately, the name distinguishes not only the country of origin, but also the production process and, eventually, the flavour.

Irish whiskey is an excellent example of provenance marketing, where consumers associate certain geographies with the best products (for example, French wines, New Zealand lamb and Swiss cheese).

Although Scotch rates highly, through brand investment and clever marketing around heritage and tradition, Irish whiskey brands are now commanding premiums.

Each Irish whiskey brand is telling a unique story and selling an individual experience to differentiate itself in a crowded and competitive market.

For example, Tullamore D.E.W. is a triple blend of grain, pot still and malt whiskey and is matured in Bourbon and sherry casks.

What can dairy learn?

Consolidation is a prerequisite for efficiency in the Irish dairy sector. As small global players, we will never have the scale to compete with the Fonterras of this world.

Not long ago, the Irish whiskey sector had a single player in Irish Distillers that tried to take on the big players of Bourbon and Scotch. It did not succeed.

It was not until multinationals such as Pernod Ricard, who own Jameson, swirled in that success happened and the Irish whiskey story was brought to a global audience.

If the status quo remains in the Irish dairy sector, it will suffer duplication, inefficiency and price discovery in global markets. Ultimately, selling commodities in this scenario returns poor value to Irish farmers.

What if the dairy sector dramatically shifted its story and started to talk about its heritage and tradition of making a cheese or butter in a co-op?

What if there was a tourist centre about Irish cheese or butter for global consumers to buy into the experience?

With Origin Green, Bord Bia is attempting to differentiate Irish food in international markets by playing on our rain-drenched country and grass-fed herd. This is a good start and is creating an Irish dairy story.

The next step is to develop premium brands across the sector, playing on a co-op’s particular heritage and creating a unique story and experience for the customer.

It is not long ago that each co-op created its own unique butter or cheese, made in a specific way from a particular blend of milk.

Kerrygold butter is a €0.5bn global brand and can sit proudly on shelves across the world. However, 50 years after its creation, we still wait for the next successful global brand built on heritage and tradition.

Is it time each co-op looked at its foundations and built its own brand, rich in pride and heritage?

Or will it take a Pernod Ricard or William Grant to invest in the dairy industry and tell the world our unique story?

Whoever it is, the story needs to be told to build brands that will return real value to farmers.