Alcohol Sector Profile | Bord Bia

Sector Summary

Total drink exports were estimated to be approximately €1.8 billion. This represents a Compound Annual Growth Rate (CAGR) of 3.4% from 2021 levels despite a difficult year in 2023 (down 8%), emphasizing the strength of the post-Covid-19 recovery in Irish drink exports.

Irish whiskey exports were back up 14% at €875 million, and Irish cream liquors were back by 9% at €370 million. However, Irish whiskey exports are still in positive CAGR growth since 2021, up 1.5%. Additionally, beer exports grew strongly by 11% to reach €330 million.

Despite certain setbacks, a record 15 million nine-litre cases of Irish whiskey were sold globally in 2022 and this figure has remained steady in 2023. Exports to the EU increase by 11% overall to €490 million, and the UK has seen strong growth with exports up by 19% to €335 million. Key emerging markets also continue to perform well for Irish drink exports including Nigeria (+6%), Czech Republic (+14%) and Poland (3%) which highlights the growing global footprint of Irish drink.

Irish whiskey exports in 2023 totalled €875 million (down 14%) and remains the key drink export category representing 50% of total value. Exports were disproportionately affected by a decline in shipments to the US.

However, this was offset by strong growth in other key export regions such as the EU, which increased by 17% to €285 million, and exports to the UK were 38% higher at approximately €65 million. Emerging global markets such as Nigeria up 59%, Poland up 21%, Singapore up 55% and South Korea up 11% continue to grow for Irish whiskey.

Approximately 91% of Irish whiskey retail sales in the US sit within the premium and above price bands (IWSR 2023e) and the category has benefitted in recent years from global premiumisation. The latest analysis from IWSR (IWSR, 2023c), suggests that premiumisation and drinking ‘less but better’ is continuing as a trend globally which is benefitting Irish whiskey producers. However, some slowdown in this trend is likely, partly due to a squeeze on incomes from ongoing inflation and higher interest rates in key export markets.

Irish cream liqueur exports fell by 9% to €370 million. The fall in exports was primarily due to a decline in export values to North America and the EU.

Similar to Irish whiskey exports, there was a surge in Irish cream liqueur exports towards the end of 2022 which led to high volumes of stock in the market. This mostly affected products within the standard price band, which are traditionally ordered in bulk more regularly than premium lines of Irish cream liqueur. This is reflected in the decline of 26% in the volume of Irish cream liqueur exports.

Key export markets for the category in 2023 were the US which totalled €155 million, Canada at €40 million, and Germany which totalled €20 million. Export values to the US were down by almost 4% with sales to Canada and Germany declining by 28% and 7% respectively. There was growth in some emerging markets across Europe including Czech Republic, which more than doubled.

Exports to the UK, a traditionally strong market for Irish cream liqueur, also eased by 20% in 2023/

Irish beer exports increased by 11% to reach an estimated €330 million. This builds on the recovery in beer exports in 2022 with exports now exceeding 2019 levels by 8%, emphasising the resilience of the Irish beer sector.

Exports to the UK were well ahead of 2022, rising by 26%
to almost €160 million. Key EU markets performed very strongly with exports to France increasing to €40 million up 59%; Germany to €15 million up 14%, Belgium to €15 million up 15%, and Italy to €10 million up 25%.

Exports to the North American market were back by 11% totalling €65 million on the back of strong growth in 2022.

Irish gin experienced a slowdown in exports following five consecutive years of strong growth as Ireland established itself as a global producer in the category.

Overall, Irish gin exports totalled €20 million in 2023 representing a decline of 20%. The category faced the same issues as other spirits, particularly in the key US market.

One key growth market for gin in 2023 was the UK which increased by 82% to approach three million euros. There was also strong growth recorded in France, Germany, Italy and Turkey.

Prospects

Glass of Irish whiskey with ice served on a table with a dark background.

The prospects for Irish drinks exports in 2024 are broadly positive. Export performance to North America should recover with a return to growth as the stock position unwinds and depletions grow again. As a key export market for drink, this recovery will contribute heavily to overall export values.

As is the case with other sectors, the operating environment in 2024 could prove challenging due to continued high
inflation, which could weaken consumer purchasing power. Glass prices also remain a challenge. Although prices steadied in 2023, they are still higher on average than in previous years. These factors in addition to further geopolitical and macroeconomic uncertainty add to the challenges.

Despite the challenges, the overall prospects for the sector remain positive for 2024 and beyond given its strong position in the premium segment of key export markets. Existing and emerging exporters are investing heavily to secure sustainable growth over the medium to long term.