Food & Drinks

Here Comes Another Irish Whiskey for the Crowded Top Shelf

  • Liquor giant hasn’t had an Irish whiskey brand since 2015 deal
  • Pernod Ricard’s Jameson dominates fast-growing spirit category

A bottle of Roe & Co Irish whiskey, manufactured by Diageo.

Source: Diageo Plc

Diageo Plc is getting back into Irish whiskey, taking on Pernod Ricard SA’s Jameson and Red Breast labels by investing $25 million in a Dublin distillery that will produce a new premium-priced brand called Roe & Co.

The maker of Smirnoff vodka and Johnnie Walker scotch will begin selling the first cases of Roe & Co next month in major European cities, Colin O’Brien, director of U.K. and Ireland operations, said Tuesday on a call with reporters. Priced at about 30 pounds ($37) a bottle, the brand will join the company’s high-end Reserve division, Diageo said.

“We were always interested in Irish whiskey,” said Tanya Clarke, general manager of the Reserve unit in Europe, confirming a Bloomberg report. “What we decided to do was innovate in the premium segment, which accounts for only 6 percent of the category.”

Diageo, the world’s largest distiller, exited the Irish whiskey category two years ago when it traded the Bushmills brand to Jose Cuervo for Don Julio tequila. Since then, Irish whiskey sales have continued to surge, leaving Diageo out of a thriving market.

The London-based company will build the new facility at Diageo’s Guinness stout headquarters in Dublin, O’Brien said. It will begin production in 2019, subject to planning approval. Until then, Roe & Co will be blended from whiskeys of undisclosed existing distilleries.

Separately, Diageo plans to open a Guinness brewery and visitor center in Relay, Maryland, according to a statement Tuesday. The $50 million project will create a U.S. home for the brand for the first time in 63 years. The facility will have a midsize brewery for U.S.-specific Guinness beers and an additional microbrewery. Guinness Stouts will continue to be brewed in Dublin.

For more on how Jameson is driving Pernod Ricard’s U.S. sales, click here

While Irish whiskey is booming, growth has been driven by Jameson, which makes up about 60 percent of the category’s sales, said Trevor Stirling, an analyst at Sanford C. Bernstein. Smaller brands like Grant’s Tullamore Dew have also been doing well, but Roe & Co will enter an increasingly crowded market. 

“It makes sense for Diageo to re-enter the category, although what you now have is a fairly high number of players jostling for space,” Stirling said by phone.

Roe & Co is a blend of fruity malt whiskeys and smooth grain whiskeys from different parts of Ireland, aged in bourbon casks, Diageo said.

Irish whiskey is the fastest-growing spirit category in the U.S., according to industry tracker IWSR. It accounts for a total of about 4 percent of the spirits market, but that could grow to 12 percent by 2030, according to the Irish Whiskey Association. Brown-Forman Corp., which owns Jack Daniels whiskey and Woodford Reserve bourbon, acquired Slane Castle in Ireland’s County Meath for $50 million in 2015 to distill new whiskeys.

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