FDBusiness.com

Irish gin is expected to go global this year, with exports set to rise significantly, according to Alcohol Beverage Federation of Ireland (ABFI), which has just released its outlook for 2018. In the outlook, ABFI, which represents drinks manufacturers and suppliers in Ireland, raised serious concerns about what it describes as the draconian and disproportionate advertising and labelling proposals in the Public Health (Alcohol) Bill.

Here is what to expect from the industry this year:

Irish Gin goes global

In Ireland, the growing demand for gin has been matched by an explosion in the number of Irish gin producers, with over 30 Irish gin brands now on the market. Many of these producers are also exporting, with exports of Irish gin more than trebling during 2017. While 2017 marked a breakthrough in term of exports for Irish gin producers, 2018 is set to see Irish gin going global, with exports expected to grow significantly in the US, Canadian, UK and German markets.

The Irish Whiskey Renaissance will bear fruit

Production of Irish whiskey continues to grow to meet demand. Since 2014, the number of operational Irish whiskey distilleries has grown from four to 18, with 16 more planned. Overall, production of Irish whiskey is forecast to double between 2015 and 2020 and double again in the following decade.

However, under law, Irish whiskey must be aged for at least three years and one day. This means there is a lag between distilling and sale. 2018 will see a number of recent distilleries releasing their own distilled stock for the first time, meaning the Irish whiskey category will get even more exciting and diverse for consumers looking to try new, high-quality Irish whiskey products.

New flavours and more choice for beer drinkers

The most notable trend in the beer sector has been the introduction of new flavours in international markets, catering to the changing taste preferences of consumers. Another trend that has started to emerge in Europe and the United States has been the growing demand for low alcohol and non-alcohol beer. These trends have already started to hit Ireland and ABFI anticipates they will continue in 2018.

Already, there has been an influx of new products to the market in Ireland. According to Bord Bia, there are now over 100 craft beer brands in the country.

An export powerhouse

Irish drinks exports rose by 8 per cent last year to €1.5 billion. According to Bord Bia, the outlook for Irish drinks exports in 2018 is positive, driven by the ongoing growth trajectory of Irish Whiskey, the popularity of premium brands and product innovation.

Drinks related tourism will continue growing 

Whiskey manufacturing has a strong relationship with the tourism industry, so growth in the Irish whiskey industry will continue to positively benefit tourism in 2018. The number of visitors to Irish whiskey distillery visitor centres has increased by 25 per cent since 2015.

Irish beer related tourist attractions are also set to draw huge numbers in 2018. 2017 was another record-breaking year for the Guinness Storehouse, with more than 1.7 million guests. Additionally, a number of small and craft breweries like Carlow Brewing Company and Wicklow Wolf Brewery are now offering brewery tours. With about 100 craft breweries now in Ireland, more and more breweries will likely become tourist attractions. 

Greater demand for agri inputs

The vast majority of Irish breweries and distilleries source their barley and malt locally, with the Irish drinks industry spending €1 billion on grains and dairy every year. It is anticipated that export growth, particularly of Irish whiskey, will lead to further increased demand for Irish grain. Furthermore, the commitments made by Irish drinks producers under Bord Bia’s Origin Green scheme means more agricultural raw materials will be sourced locally.

While there are strong prospects for the industry, ABFI has warned that the Public Health (Alcohol) Bill could hinder future growth.

Alcohol Bill could negatively impact choice and innovation

As part of the Public Health (Alcohol) Bill, the Government is proposing to introduce health warnings on all alcohol products sold in the Republic of Ireland. This includes a cancer warning on alcohol products, which ABFI says would put huge additional costs on producers. This increased cost would be particularly harmful for small local producers and new entrants. The labelling requirements would act as a severe barrier to entry and such a measure would cause serious reputational damage to Ireland’s premium drinks products.

According to ABFI, the advertising content restrictions being proposed in the Alcohol Bill would also hugely damage small players and new entrants to the market, as they wouldn’t be able to effectively advertise their products to consumers.

Patricia Callan, Director of Alcohol Beverage Federation of Ireland (ABFI), says: “The drinks industry is an important Irish industry, with innovation at its core. However, we are concerned about the unintended negative consequences of the Public Health (Alcohol) Bill. We have seen a number of new players and new products hit the market in recent years, which has supported growth. The Alcohol Bill could slow down or even reverse this growth, as it includes proposals that would act as a barrier to entry and a barrier to innovation. Furthermore, the Bill is being introduced at a tumultuous time for Irish business, with 2018 due to be a pivotal year in the Brexit negotiations.

“We believe there is scope for reasonable amendments on advertising and labelling, which would protect competition, innovation and investment in the industry, as well as choice for consumers.”