March 17, 2011 at 3:38 AM ET
The news out of Ireland these days is nearly all bad. A decade ago, its so-called Celtic Tiger expansion was considered one of the economic miracles of our time, and for a while Ireland was the fastest-growing nation in Europe. But that growth turned out to be a mirage, fueled in part by voracious and irresponsible borrowing -- and now the Irish economy has been brought to its knees, forced to borrow $90 billion from the European Union just to pay its bills last fall. The Irish openly worry about losing national sovereignty again.
But the remnants of the Celtic Tiger may serve as fuel an Irish recovery after all, and a spirited one at that.
Irish whiskey, which almost disappeared during the 1960s, is suddenly among the fastest growing alcohol exports around the globe. U.S. sales grew an astonishing 22 percent last year, according to the Beverage Information Group, while the rest of the spirits industry was essentially flat. And that growth has fueled a renaissance in varieties and a resurrection of old brands now reaching American shores. Revelers who head out to their favorite Irish pub Thursday for St. Patrick's Day – and the National Retail Federation says a record 38 million Americans will -- will notice the difference behind the bar immediately. The whiskey shelf once reserved for Jameson alone will now be crowded with new entrants like Paddy's, Michael Collins, Redbreast and a host of other unfamiliar but inviting bottles. Even $17-a-glass Midleton might be stocked there.
The tragedy, and recent resurrection, of the Irish whiskey business is a tale that's tailor-made for the Irish sense of for melodrama.
The Irish claim whiskey is their invention, and give it a long and storied past. The first element on the official Jameson "history of whiskey" timeline is the arrival of St. Patrick in 432 AD. "Uisce beatha," The Irish word for whiskey, distillers will quickly tell you, means water of life.
In the late 1800s, perhaps 2,000 distilleries dotted the Irish landscape, and their product dominated global whiskey sales. Then, the industry suffered a one-two-three punch that nearly killed it. U.S. Prohibition in 1919 cut off the American market; the Irish independence movement cut off the U.K. market, which then covered half the globe; and when Ireland maintained neutrality in World War II, American GIs developed a taste for Ireland's bitter rival, Scotch whisky.
At the time, even pop culture worked against the Irish. With the advent of motion pictures, "Scotch on the Rocks" became the drink of movie stars, according to Simon Ford, the U.S. spokesman for Jameson.
"At one point, Scotch became the generic term for whiskey," he said.
Monopoly couldn't save it
Brands disappeared, and distilleries closed en masse. By 1966, the Irish whiskey industry entered hypothermia to survive. Only three makers remained in the Republic: John Jameson and Sons, John Power and Sons and Cork Distillers. They joined forces to form the Irish Distillers, and moved all production to Cork, Ireland's second largest city, to a plant called Midleton. The group focused most efforts on propping up the Jameson brand. Now, there was basically one Irish whiskey brand left in the world, made in one place. Even Bushmills, made in Northern Ireland, joined the group within a few years.
The monopoly was created as a last act of desperation, but even that didn't work. Ultimately, the Irish government went looking for a financial savior, and in the 1970s, the entire industry was sold off to a Canadian company -- Seagram's, which soon turned the business over to a French firm, Pernod Ricard.
"The industry was on the verge of going out of business," said Rich Nagle, president of the Irish Whiskey Society of America. "(During prohibition), there was a lot of bootlegging, and Irish whiskey began to be associated with crap. … Meanwhile, Scotch had cultivated this sophisticated culture."
Even as the 1980s economy showed signs of life, Irish whiskey was in no condition to compete with Scotch. Whiskey makers are the polar opposite of a just-in-time manufacturing firm. There is no way to react to a sudden surge of demand. Irish whiskey must be aged a minimum of three years, but makers must plan much deeper into the future. High-margin, better quality whiskeys are aged 12 and 15 years – so it takes at least that long for the business cycle to play out. Nearly every bottle of whiskey produced in the 1960s had to remain in Ireland to satisfy domestic demand.
"We didn't have maturing stocks. Anything we had to put into the market , we had to keep in Ireland," Ford said.
Signs of life
But as the Celtic Tiger gained steam in the early 1990s, the Irish whiskey industry began to awake from its long slumber. In 1994, the monopoly was broken, as Irish firm C&C purchased the Tullamore Dew brand from the merged Irish Distillers owner Pernod Ricard. During the 1990s, a home-grown Irish firm, Cooley, opened for business and began resurrecting old Irish brands like Tyrconnel. It also resurrected the old Irish way of distilling, called "pot still," where batches of the pre-whiskey stew called "mash" are boiled and distilled one pot at a time -- a far less efficient process than modern continuous distilleries. Stimulating even more competition, Bushmills was sold to British giant Diageo in 2005.
Meanwhile, sales of Jameson roared around the globe, created a beachhead in other markets for lesser-known brands. By the end of last decade, Jameson annual export growth regularly topped 20 percent. Meanwhile, whiskey aficionados -- often of Irish descent -- began forming Internet groups to demand export of brands they'd tasted on a trip to the Old Country. That convinced Pernot Ricard to dust off brands it had long kept tucked away from the 1960s merger days. For last year's St. Patrick's Day, to great rejoicing of some, old-fashioned Paddy's made its "legal" debut in Irish bars and liquor stores. Intended as a two-month trial, Paddy's is now a fixture in most Irish pubs on the East Coast, often joining Powers – sometimes called "your grandfather's whiskey" -- and Jameson as a sort of Irish whiskey trinity produced by Pernod.
Colum Egan, master distiller for Bushmills, said the whiskey trend has now reached far beyond Irish bars.
"Drinking Irish whiskey has become the cool thing to do now. It's gone way outside Irish pubs now, to American bars, Chinese restaurants, you name it," he said. "There's been a need to create different whiskeys to satisfy different tastes. It's no longer enough to have one or two whiskeys stocked. People are looking for seven, eight, nine, even 10 brands. There is room for it. Every time I come over (to the U.S.) I see more whiskeys in the pubs."
'Simple enjoyment of a good drink with kindred spirits'
Just as whiskey was too slow to react to the raging Irish economy, it's been buffered from current doldrums, too – most of the Paddy's and Jameson's being sold today was made before the economic meltdown hit. But plenty of other factors make Irish whiskey attractive as the recession drags on -- for starters, at around $24 a bottle, Jameson is an economic merry-maker, Ford said.
That economy means more than just a low price, he argues. The era of conspicuous consumption is over, he points out, and basic Irish whiskey is more in line with the times.
"We're not a brand with pretense. We are comfortable in our own skin," Ford said. "Irish whiskey doesn't take itself too seriously; it's got that Irish easygoing way about it."
Nagle, who plans to launch his American Irish Whiskey Society in Boston this year's on St. Patrick's Day, agrees.
"We're not in smoking jackets, talking about ponies, with our pinkies in the air," he said. "Irish whiskey is about the simple enjoyment of a good drink with kindred spirits."
Despite the raging success, Irish whiskey is still a tiny player in the huge U.S. spirit market. In 2010, 1.4 million cases of Irish whiskey were sold here, according to the Beverage Information Group -- accounting for just 0.7 percent of the spirits market. The U.S. Scotch market is more than six times the size, having sold 8.7 million cases last year.
Still, the inspiring climb of Irish whiskey exports – Jameson passed 3 million in worldwide case sales last year for the first time, up from 500,000 when Pernod purchased the brand in 1988 – is a welcome shot of good news. Irish liquor exports amounted to nearly $1.6 billion last year, according to International Wine & Spirit Record, nothing to sneeze at. And distillers say the small market share represents an enormous opportunity.
"I always say if i can get people to taste it, they'll drink it," Egan said. "And now I think people have discovered the taste."
As a sign of how far the Irish whiskey market has come, Cooley Distillery recently reopened the Kilbeggan Distillery, which some call the oldest distillery in the world. (Kilbeggan is Irish for "little church.") It had been closed since 1957. Last year, the first batch of Kilbeggan Distillery Reserve Malt hit stores at a cool $65 per bottle.
"The newest whiskey out of Ireland is made at the oldest distillery in the world. You really get a strong sense of the legacy of whiskey and how important it is," said Nagle.
Whiskey exports will, no doubt, be equally important to the future of the Irish economy and to the restoration of Irish pride, which took a severe hit when the nation was forced to borrow from the EU.
Pernod recently announced a major expansion of its Cork facility, adding a much needed burst of new jobs to the region.
"The Irish economy exportwise is doing very well, experiencing double-digit growth in some areas. Whiskey will be a big part of that," said Egan. "Everything Irish sells well. People like products from Ireland, and there's nothing better than whiskey. On Thursday, tens of millions of people will celebrate their Irish heritage and we need to show we are more than capable of continuing on. There's tough times ahead, but it's not all doom and gloom."
Especially not if you have a glass of Irish whiskey in your hands.
RED TAPE TASTING TIPS
Nagle says people continually ask him what whiskey is best; he answers the question in the great tradition of Irish blarney. Not only won't he pick a favorite – he's sure to say he has many different favorites. But he does count Paddy's as simpler and smoother than most whiskeys, so it's a good entrant for neophytes who'd never tried the potent brown liquor before.
"Whiskey will taste differently to you from day to day because of your mood, because of what you've eaten, and so on," he said. "To appreciate whiskey all you need to have is an open mind."
People who really know – distillers – quietly tell him that the most critical ingredient in whiskey taste has nothing to do with aging or distillation technique. It has to do with the company you're keeping.
"Some people turn it into a chemistry project. But makers talk about 'who you're with,' and how that matters. Who you're with certainly effects how much you enjoy what you're drinking," he said. "It's about the conversation. It's about, as the Irish say, good craic."
For some great pictures of the distillation process, and more information on Irish Whiskey, visit the Irish Whiskey blog.
And for a very good reason to choose good whiskey over cheap green beer, read The Body Odd today, which explains (sadly) why hangovers get worse as we get older.