London - Diageo is getting back into Irish whiskey,
taking on Pernod Ricard’s Jameson and Red Breast labels by investing $25
million in a Dublin distillery that will produce a premium-priced new 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 UK 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.
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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 US, 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, which owns Jack
Daniels whiskey and Woodford Reserve bourbon, acquired Slane Castle in
Ireland’s County Meath for $50 million in 2015 to distil new whiskeys.