In August 2018, the Irish Independent reported that Irish Distillers Limited was planning to build another distillery. Citing the rapidly growing demand for Jameson, it detailed an internal announcement in IDL that another distillery was to be built, with locations such as Youghal and Waterford mentioned.
It was not the most surprising claim – Irish whiskey sales were rocketing, and there had been the 2013 €100m investment at Midleton which doubled production capacity to 64m litres of pure alcohol a year, a 2017 €10m further investment at Midleton, and earlier in 2018 IDL had bought Eight Degrees Brewing, a craft beer producer in North Cork, to service their Jameson Caskmates range. So they were expanding at pace, year after year. With the speed of growth in Jameson, building another distillery made sense. Or maybe it didn’t.
The day after the piece in the Irish Independent, then Irish Distillers CEO Conor McQuaid went on radio to pour cold water on the claims; speaking on Newstalk’s Breakfast Business, McQuaid said that the Indo’s report was “somewhat premature” and that “there’s no definitive plan at this point in time”. However, later that same day, IDL issued a press release stating: “We are currently examining all options to increase our production capacity to meet projected demand and building a new distillery is one of them”.
Now, four years on, we know what they are building, and where.
Six years ago, a farm on the outskirts of Midleton came up for sale. It was prime land, for farming or for development. As it was so close to the town, part of the farm was included in the Midleton town development plan, meaning a 45ac parcel was zoned industrial while the 3ac around the farmyard was zoned residential, with a further 50ac zoned for amenity. You could farm it, you could build on it, you could just sit on it and see what happens. Interest in the auction was high. After an intense bidding war, there could only be one winner – Irish Distillers Limited. The lands were adjacent to their massive distillery operation, and the Dungourney river – from which the whiskey is made – runs through the farm, and occasionally over it: In January 2016, the river burst its banks and flooded the area just outside the warehouse complex of IDL. Perhaps that was why they wanted the land – to keep their interests safe. Or perhaps they wanted to just grow some barley and leap aboard the terroir train; sixteen acres of the farm were described as ‘top class limestone lands’ while the bigger 119ac portion was made up of ‘good and mixed ground with 111ac split equally between tillage and grass’. Either way, the entire farm was bought as a single lot by Irish Distillers for €2.29m – or €17,000/ac. But sizeable firms like IDL rely on a certain amount of goodwill from neighbours – nobody wants to end up in a Bull McCabe situation with any locals, so they entered negotiations with local groups and individuals who wanted to buy some of the lots, and thus the local GAA club got beautiful new grounds.
This map shows the lands now owned by IDL – all within the blue, red and yellow lines.
I had daydreams that IDL would build a new distillery outside of Midleton – that they would stick a lovely modern distillery out in west Waterford somewhere, a modernist beauty like the one Pernod are building in China. I had also hoped they would build a distillery solely for making single malt – although they do make what they call ‘small quantities’ of single malt (small relative to their capacity as a superproducer) in the main plant, it feels like relying on Bushmills for malt spirit might not be a great long-term plan. Brexit continues to create a lot of uncertainty for firms on both sides of the border, which presumably is part of the reason Bushmills built their first column still, as they had relied on Midleton for all their grain spirit up to this point. Midleton takes new-make malt from Bushmills and casks and matures it in Cork. I can remember having a chat with a member of the IDL team when they released the Method & Madness single malt in which they kept calling it Midleton malt, and I kept saying, but it was distilled in Bushmills, so it’s Bushmills malt. Perhaps we were both right (and wrong).
But one thing I was definitely wrong in was my idle thoughts about where the new distillery would be built and what it would make. Here’s a lightly edited press release:
Irish Distillers announces €250 million investment plan for new distillery in Midleton
- The new distillery is expected to be operational in 2025
- Once operational, it will create up to 100 new jobs for east Cork
- The new distillery will be situated on a site adjacent and connected to Midleton Distillery and will generate circa 800 construction jobs over three years
- The new distillery will be a carbon neutral operation, facilitated by the implementation of new and innovative MVR (Mechanical Vapour Recompression) technology to reuse waste heat and the use of biogas produced on site.
Cork, 5th September 2022: Irish Distillers, producer of some of the world’s most well-known and successful Irish whiskeys, has today announced it will invest 250 million euro to build a new distillery in Midleton Co. Cork in order to meet demand and ensure the necessary future production capacity for its portfolio of Irish whiskeys globally. The distillery will produce some of the world’s most well-known and successful Irish whiskeys, including Jameson, Powers, Redbreast, Midleton Very Rare, the Spot family and Method and Madness.
The new distillery will be situated on a 55-acre site adjacent and connected to the world-famous Midleton Distillery.
Subject to a successful planning application and meeting all licensing requirements, the new distillery will distil pot still and grain whiskey with grain intake, brewing, fermentation, and distillation facilities incorporated into the new 55-acre site.
The new distillery is expected to generate up to 100 highly skilled new jobs for the region over time once the distillery is operational in 2025, and circa 800 jobs during the construction phase.
Irish Distillers recently announced plans to invest €50 million to fund projects aimed at transforming Midleton Distillery into a carbon neutral operation by the end of 2026 by leveraging breakthrough emissions reducing technology to reduce energy use. In line with Irish Distillers’ ambition, the new distillery will also be a carbon neutral operation. The new site will also incorporate various environmental projects which will be developed in order to enhance biodiversity and protect local wildlife.
An expanded distilling capacity is expected to increase Midleton Distillery’s requirement for barley and malted barley by up to 50%, which the company intends to source from Irish farmers.
The Irish Distillers project team is partnering with engineering and architecture consultancy firm Arup on the initial design and with Harry Walsh Associates on the planning application. Irish Distillers is engaging with all relevant stakeholders and consulting with community groups in the locality as part of the pre-planning process. A planning application is expected to be submitted to Cork County Council towards the end of 2022 and, if successful, construction will commence in 2023 with plans for the distillery to be operational in 2025.
The distillery will also employ innovative Mechanical Vapor Recompression (MVR) technology which will see a closed loop system capture, compress and recycle waste heat in the distilling process. Renewable sources of energy, including green hydrogen and biogas will be used to power the distillery. Irish Distillers has partnered with local experts at EI-H2 to explore opportunities to source green hydrogen and carried out extensive research in partnership with MaREI, the SFI Research Centre for Energy, Climate and Marine, hosted by University College Cork, to determine the biomethane potential of the by-products of distillation and design the required anaerobic digestion process necessary to produce biogas. Irish Distillers will also partner with StanTech on wastewater treatment and biogas production.
In addition to its commitments to eliminate scope 1 and scope 2 emissions across both distilleries, Irish Distillers has also committed to working with suppliers on projects and initiatives to reduce scope 3 emissions across all areas of its business including raw materials, dry goods, transportation, logistics and freight.
So they are building another distillery, which is incredible if you consider the Garden Stillhouse has six 75,000-litre stills, and the Barry Crockett Stillhouse has four of equal size (rare pic of the inside of the Crockett building here). So that’s ten enormous stills going at it 24-7. Besides that there is the column still(s) of which there are five according to Whisky.com. That page also goes into the various styles of pot still whiskey made in Midleton, for this is not a monotonic entity – they produce all Jameson, all Powers, all Redbreasts, all the Spots, all Midleton Very Rare, and presumably all Paddy – although IDL sold the brand to Sazerac in 2016 and Sazerac since bought Lough Gill Distillery to house the brand, I assume full production has not left Midleton just yet.
Beyond all those brands, Midleton releases single casks, Method & Madness, and a bit of whatever you’re having yourself. In short, Midleton Distillery is less a one-man band and more of an orchestra.
The news of the new distillery – which, if the concept art is right, will have a sizable column still and nine pot stills – comes off the back of a bumper year for Pernod Ricard. In their FY22 results announced last week, sales grew by +17% organically, totalling €10,701m, but with Jameson recording 10.4 million nine-litre cases in the period, an organic net sales growth FY22 +24%. This means that within the Pernod Ricard spirits stable, Jameson is second only to Absolut’s 12.4 million cases.
On an earnings call on the day of the announcement, Pernod Ricard CEO Alexandre Ricard spoke about Jameson, saying that it was becoming a ‘cult’ brand in India, before praising its remarkable success: “I would just like to stress the excellent performance of Jameson up 24% with a three-year double-digit CAGR of 12%. We’ve broken the 10 million case milestone for Jameson this year, which is just amazing with the fastest growth rate in 30 years for the brand. Double-digit growth in the US with a very successful launch of our innovation, Jameson Orange, but I’d like to stress as well, the success of the internationalisation strategy of Jameson with growth accelerating to 38% outside of the US with great performance in India, as I mentioned, but South Africa as well, Nigeria and many, many other markets across the world. And I’d like also to underline the very strong performance of Jameson Black Barrel up 43%.”
Pernod Ricard had been under pressure from activist investor Elliott Management, so presumably this has eased off some of that. Or not. The Drinks Business has a different spin on the Pernod results, making it clear that the firm is not closing the gap on Diageo as they should: “Only a month ago, Diageo revealed organic net sales growth of up 21.4%, for the same 12 months, again with strong double-digit growth across all regions. Its organic operating profit grew by 26.3%, again with growth across all regions. Against this background, Diageo’s shares have fallen by about 7% this year, while Pernod Ricard’s are down by about 14%. Diageo’s share price stands at about 21.5 times forward earnings predictions while Pernod Ricard’s are valued marginally lower at 22 times.”
And while the domestic press may crow about Jameon’s record run, Diageo’s flagship Johnnie Walker brand sold twice as much in the same period – Johnnie Walker organic net sales grew 34% this year, surpassing 21 million nine-litre cases. A lot done, more to do, as the old political slogan says.
For the rest of the Irish whiskey category the results from Pernod were a reminder that what we call the Irish whiskey resurgence is still very much centred on one brand – Jameson makes up between 60% to 70% of all Irish whiskey sales worldwide. Then there is one very large market now closed off for an indefinite period:
Then there was the Shanken interview with IDL’s global marketing manager Brendan Buckley, which contained great news about various brands doing well and some worrying noises like this: “Next year is going to be a funny year between the geopolitical situation, a likely global recession, and the impact of inflation. We don’t know what will happen. One of the big topics being discussed across the industry is how everybody is going to put through some big price increases next year because of rising costs. For example, our deep-sea shipping costs have tripled.”
Yikes. He also described Redbreast 12 as a ‘steal’ at its current price so you might want to get thee down to Waitrose and start grabbing bottles.
So another distillery for Midleton, which has been the home of Irish whiskey for four decades now – not that you’d know it, given that Jameson only took Bow Street address off the labels in the last few years. I would contend that most Irish punters don’t know, or possibly care, just how important Midleton Distillery is. Bow Street, for all its tourism bells and whistles, is an animatronic corpse. Midleton is where Irish whiskey lives and breathes. Long may that continue.
