Sunset at Giants Causeway - Luck of the Irish

The Irish wine market weathered the storms of a brutal global recession, but will its luck run out under the pressures of minimum pricing, Brexit, and a weaker pound?

As “an island off an island off the European Continent” as one of this year’s trade interviewees put it, the Republic of Ireland can often fall off the priority list of wine exporters. Add in the economic damage of the recession of 2008-12, which was felt worse in Ireland because of its significant banking failures and subsequent government bailouts, you might expect that the wine category would be shrinking.

However Wine Intelligence research illustrates that in recent years the market has not only recovered but is now growing again in terms of volume and interest. Economic recovery has brought with it an increase in disposable income, which is being reflected in spend in both the on- and off-trade. Irish wine consumers are now trading up and are willing to spend more on a bottle of wine than in 2014, in search of a more premium experience.

In terms of varietals consumed, Irish wine drinkers are generally sticking to the classic grapes for red and white wines – Merlot and Cabernet Sauvignon top varietal consumption on one hand, and Sauvignon Blanc and Pinot Grigio on the other. That said, consumers demonstrate more familiarity and confidence with red varietals than whites. Malbec has done particularly well in the long term, earning a reputation as an easy drinking red that pairs well with typical Irish cuisine. Less well-known, more aromatic varietals that tend towards a lower alcohol content, such as Moscato, Torrontés, and Verdejo have all seen long-term growth.

Clearly some major challenges remain, chief among which is the impact of Brexit on the economy as a whole and the treatment of the border with the UK-sovereignty north. Pricing, transportation costs, and cross-border purchases may all be affected by the UK’s exit. Changes in domestic policy, too, look set to have a profound impact on the alcohol category. The Public Health (Alcohol) Bill, proposed by the current Irish government, would restrict advertising, impose segregation of alcoholic beverages in grocery stores, and set minimum pricing based on alcohol content.

Threats abound within the alcohol category itself; Irish wine drinkers are demonstrating a desire to experiment more with their alcoholic beverage repertoire. The rise of craft spirits (notably gin) and craft beers challenges wine’s share of the market. The ‘experience’ of purchasing a mixed drink – watching a skilled bartender hard at work, listening to their patter about spirits and botanicals, getting a visually stunning cocktail at the end – transforms a transaction into something much more and delivers added value. While the wine industry is yet to find a way to engage consumers in such a way, it may benefit from this increasingly educated, knowledgeable, and experimental consumer base, already primed to explore the wine category.