In January 1986, the space shuttle Challenger exploded over the Pacific Ocean shortly after takeoff from Florida. All seven crew died, including schoolteacher Christa McAuliffe, there as part of the ‘Teacher in Space Project’. As a result of her presence on the trip, the launch and the explosion that followed were witnessed live in many schools across the United States. The image of the pinwheeling fragments of the shuttle falling to earth were burned into the minds of a generation.
In his 1987 spoken word album No More Cocoons, former Dead Kennedys singer Jello Biafra did a piece about the tragedy, titled, with his usual subtlety, Why I’m Glad The Space Shuttle Blew Up. In it he mocked the disaster but went on to explain why he was glad that the space shuttle blew up: The next mission of the ill-fated Challenger was to launch the nuclear-powered Ulysses solar probe satellite into orbit in late May; both Ulysses and its companion mission, the Jupiter-bound Galileo probe — also scheduled for launch that spring — contained nearly 50 pounds of plutonium-238 as fuel. Scientists warned that if that radioactive plutonium were released as smoke or dust, say via an in-air explosion, it could pose a severe public health risk to those who inhaled the cancer-causing particles. Dr. John Gofman, a professor of medical physics at UC Berkeley, cautioned that a cloud of plutonium over Cape Canaveral could render parts of Florida uninhabitable. In other words, sometimes a tragedy is better than an apocalypse.
The news that Waterford Distillery had gone into receivership was met with shock by some, a complete lack of surprise by others, and no small amount of glee by those who felt they had it coming – the brand was too aloof, the product too young, too expensive, too pretentious. Terroir was a dead scene, here was the proof. But while there are many, many lessons from the slide into silence of one of Irish whisky’s brightest stars, above all it was a lesson in economics. Rising costs, falling sales, massive debts – this is the hydra headed beast that killed Waterford and it will kill many others as it slouches across the land.
Beyond the mainstream stories of distillers battling to stay open as investors call time, there are numerous rumours of some of the biggest producers either cancelling planned expansions, reducing production, laying off staff, or simply pulling down the shutters, albeit very quietly. When Irish Distillers Limited announced they would be pausing production at Midleton Distillery – which celebrates 50 years of production this year – for three months, it was hard not to read words like ‘scheduled maintenance’ and not raise an eyebrow. The timing would certainly seem to suggest that after a decade of growth, maybe now was the perfect time to shut and repair, because apparently the demand for the product just isn’t there right now. Given that Irish Distillers are constructing a €250 million carbon-neutral distillery adjacent to its existing facility in Midleton, you’d certainly hope it will be again at some point in the future.
There is a global decline in whiskey. The Scotch Whisky Association reported a 3.7% decrease in the value of Scotch whisky exports in 2024, and the value of rare whisky – and whiskey – at auction has also fallen significantly. Just as Waterford’s receivership wasn’t the fault of the distillery or the brand or their outspoken founder Mark Reynier, Irish whiskey is not suffering alone, nor is it entirely to blame for what is happening. People are spending less and drinking less. But if Jameson is slowing, everything is slowing. The rising tide we heard so much about over the last decade – the one which lifts all boats, the effect of which sparked a revolution in Irish whiskey and saw distilleries mushrooming all over the island – is on the way out, and who will be left afloat once it is gone will be very interesting to see.
What I would hope to see is that of the 48 or so (I’m waiting on a full list of GI verified Irish whiskey producers from DAFM) currently operating on the island, 30+ will pull through. One industry veteran half-jokingly said he thinks it will end up that there will be ten multinational owned and ten indies and that will be it, but you would hope the number will be higher. But what we have now is, I assume, what we will have going forward and that any planned distilleries will be hitting pause as well. The problem with the mood shift is that getting funding now for any whiskey related business means you have to contend with someone simply googling ‘Irish whiskey’ and seeing a lot of bad news. People with money will catch a vibe, and take their business elsewhere.
But this moment has been some time coming – early last year I wrote a piece for the Spirits Business that asked – what next for the category? The tone was generally upbeat and most of the voices in the piece had a level of cautious optimism about the future. By the end of summer last year that had changed – rumours of a slowdown abounded, St Patrick’s Day sales in the US were down, costs were rising and distillery staff were starting to appear on LinkedIn delighted to share they were open to new opportunities. Behind the scenes, there was a real fear. Much of it seemed to stem from America – Irish whiskey just wasn’t selling like it had.
By the time the news of Waterford’s receivership broke, everyone was on tenterhooks. Scottish distilleries faced the same headwinds but had a far larger market share, and multiples of the sales Irish producers had. In many cases they also had decades or centuries of experience of the highs and lows of making whisky – most Irish distillers had only hit the market in the previous decade, and presumably investors not used to the cyclical nature of whiskey might not be happy to be told, things are bad right now but will pick up again in two years or so. So plugs start to get pulled.
I am constantly amazed that anyone, anywhere, ever, would invest in a distillery – massive outlay to get it up and running and five to ten years before you can start to make a few bob selling the stuff. It’s unsurprising that the vast majority of distilleries on the island of Ireland filled in this five-year gap by buying in stock from larger producers, sometimes passing it off under their own distillery brand, sometimes creating an adjacent brand which they were very discreet about revealing as sourced. I suspect those who used another distillery’s products will survive better than most – Waterford, after all, sourced nothing and had no vodka, or gin. A distillery cannot survive on provenance alone, it would seem.
Auction prices are already falling, Irish whiskey is not the hot topic it was five years ago, and a certain amount of excitement is gone. But that had to happen – with the big producers reducing supply, or others simply going under, balance will be restored. None of that is comforting to those who will lose their jobs or their investments in these businesses but a shakeout was almost inevitable. The belle époque had to end. Better it happens now than in another five years when there could be another ten or 15 distilleries operational and thus farther to fall back to earth. Our space shuttle has blown up, but it could be much worse.
Triple Distilled Communications 