Drinks Performance & Prospects Summary

In 2021, overall drinks exports increased by 19% to be worth €1.62bn - a strong recovery after the unprecedented difficulties for the sector in 2020. This left the value of exports similar to 2019 levels. The recovery was driven by strong exports of Irish whiskey and cream liqueur, particularly to the US. The US market has long been the key market for these export categories, and the market emerged quicker from the Covid-19 related restrictions when compared to other key markets.

The closure of the on-trade in other key regions, such as the EU, negatively impacted exports, but there was strong growth in some EU markets such Germany (+28%) and Poland (+60%). Emerging markets for Irish drinks exports such as Nigeria (+140%) and South Africa (+109%) also showed robust growth as the Irish drinks sector continued to expand its global footprint.

Irish whiskey once again was the strongest Irish drinks export and accounted for €856m (+25%) in 2021. The growing trend of premiumisation and the strong position of Irish whiskey in this segment led to the value of Irish whiskey exports increasing at a stronger pace than volumes. Cream liqueur (+19%), gin (+38%) and cider (+50%) exports also showed strong recovery levels in 2021.

During the pandemic, other trends such as the online channel became an area of focus in a number of key markets. In the US, IWSR estimates that the sales via e-commerce grew to over 60,000 9L cases in 2021. This channel is forecasted to continue to grow strongly to 2025. Due to restrictions in markets across the globe, at home consumption also outperformed again in 2021. This is significant as consumer drinking patterns at home have proven to differ from traditional on-trade consumption.

However, not all categories and channels within the drinks sector experienced the same levels of recovery. Overall beer exports were down by 3%. Beer exports rely more on the on-trade than a lot of other drinks categories and the closure of this channel for most of 2021 in many markets was a key factor in exports falling by 3%. Global Travel Retail is a key channel in the drinks sector and it began to show the first signs of recovery with the volume of spirits sales via this channel increasing by 37% in 2021. However, volumes are not expected to return to pre-pandemic levels until 2024.

Prospects for this year are positive. The momentum of strong trend growth of previous years should return. The industry will need to respond to the challenges and opportunities created by the pandemic such as changing consumption patterns and the growth of online sales.