Irish whiskey supply chains turn tipsy

As compared to 2020 – year of the pandemic – the demand for Irish whiskey in international markets saw a considerable rise of 21% during 2021. And even though the demand projections for 2022 run on a positive trajectory, the industry is worried that the supply chain hiccups may play spoil sport.

“Irish whiskey exports will grow again strongly in 2022. However, Irish whiskey is facing many serious international trade and supply chain challenges, and the fact is that not all brands will grow this year. It is notable that the reported supply chain difficulties are being experienced equally by both large and small producers, and it is likely that the serious impacts will be felt hardest by SME producers,”

William Lavelle, Director of the Irish Whiskey Association

A recent press release by industry body Drinks Ireland on basis of the annual report prepared by the Irish Whiskey Association, mentioned that Russia and Ukraine cumulatively accounted for 7% of all Irish whiskey sales in 2021, leaving a likely negative impact on global sales in 2022 amid the unending war between the two. It should be noted that before the war, Russia was the second largest export market for Irish whiskey.

On the other hand, India, Nigeria and China have been identified as emerging markets to watch for future export growth. The exports are most likely to trend up this year, with preliminary data showing an 38% jump in exports the first six months of 2022, according to the release.

Majority of Irish whiskey manufacturers have expressed concern over the impact that supply chain delays have over production output. Two-thirds of respondents strongly agreed that increased delays in the delivery of materials had resulted in delays to the launch of new products, Drinks Ireland said. It also mentioned that more than 70% of manufacturers had switched suppliers in order to settle at a stable incoming supply of raw materials.

The global inflation has also bought down the industry’s high spirits. Increases in malt prices, energy and general business costs are a cause of concern, which when coupled with delays in international shipping turn into “the most serious supply chain concerns identified by industry”, the release further said. More than three-quarters said they expect both supply-chain costs and lead times to increase in the next 12 months.

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