Irish whiskey demand is so strong in the U.S. that it likely leaves other alcoholic beverage producers green with envy.
As Americans mark another St. Patrick's Day holiday by consuming gallons of Guinness beer, corned beef and cabbage, and a lot of green-colored foods, it is important to remember that the whiskey industry is enjoying a renaissance in the U.S.
Along with many other brown spirits like Tennessee and bourbon whiskey produced here in the U.S., American spirits drinkers are also being lured to the Irish whiskey category. Volume in the U.S. topped 3.2 million nine-liter cases in 2015, a 16% increase from the prior year according to the Distilled Spirits Council of the U.S. It was the best performing category among all spirits categories that year, easily besting the industry's 2.3% growth.
"It is the premium categories leading the Irish Whiskey boom as adult consumers continue to favor higher-end products," said Frank Coleman, vice president of the distilled spirits council.
Experts say Irish whiskey is selling strongly because it is easily mixable in cocktails, which have been selling strongly in the U.S., and also expanding into different expressions. A key example of that innovation is Pernod Ricard's move to sell a new variety of Jameson called Caskmates – an Irish whiskey aged in stout-seasoned barrels. Caskmates was launched nationally last year, one of Pernod Ricard's key introductions to the U.S. market.
"Consumers are increasingly skipping the green drinks this St. Patrick's Day and going for quality Irish whiskey cocktails," Kevin Denton, national mixologist at Pernod Ricard tells Fortune. Denton said U.S. alcohol beverage drinkers are increasingly more interested in authentic brands with heritage stories to tell – and Jameson fits neatly into that trend.
Jameson has been a strong performer for Pernod Ricard, with volume increasing 13% for the French beverage giant in the latest fiscal year.
The category is also luring in other competitors that didn't traditionally compete in the Irish whiskey market. As Fortune reported last year, Jack Daniel's maker Brown-Forman signaled plans to start selling the company's own Irish whiskey in the spring of 2017, the first time it has addressed that pocket of the market. Brown-Forman bought Slane Castle Irish Whiskey and is planning to invest $50 million to build a new distillery in Ireland.