February Council Meeting Hears that First Ireland Spirits' Exports are Buoyant

Wednesday, 16th February 2011 (Source: IEA)

Seán Hanifin of First Ireland Spirits gave the IEA Council an overview of the Co Laois based drinks firm, First Ireland Spirits, and the challenges and opportunities facing their business.

The company was formed in 1993 in Abbeyleix and their core business is Irish Cream Liqueurs, focussing on the retail and the on trade sectors. First Ireland Spirits is the second largest producer of Irish cream liqueur in the world. The brand is the number 2 brand in the multiples behind Baileys.

Seán mentioned that case sales of Irish Cream Liqueurs were 9 million in 2009 of which 95% exported. Diageo Baileys produce 6.7 million cases in Ireland annually. First Ireland are second producing 800,000 cases last year. He said there were 6 producers on the island of Ireland, with First Ireland Spirits being the largest independent producer In comparison, Irish whiskey sales are 4.5 million cases and Scotch is 90 million cases, so there’s room for growth in Irish whiskey.

They have now branched into non cream liqueurs such as whiskey liqueurs and ready to drink cocktails. First Ireland Spirits' flagship brand is Feeney’s which is being exported to 17 countries, primarily in travel retail but also now in some multiples. In terms of channels, From the outset the focus, he said, was on the retail and the on trade sectors. North America is the biggest market with 35% of their business, followed by the UK with 28% and Ireland accounting for 5%. The Rest of Europe and Rest of the World are the other 2 markets in which they group their business. The growth in 2010 was 6.5%.

First Ireland Spirits split their business into 3 sectors. They are Branded, Private Label and Contract Manufactured business. The latter is the highest volume but has the lowest margin. Amongst their customers, he said, were Walmart and Sam’s Club in the US.

To access the US market, they deal with distributors and distillers in the US and contract manufacturing is a big part of their business there. Strengths, he said, included the Irish provenance (the Irish cream has been legally defined in the EU and has to have specific ingredients and quantities); flexibility in terms of runs and filling capacity from .5L to 1.7L pet for behind the bar.

A weakness is currency exposure with 60% of their business in the US and UK combined. They offset this by sourcing packaging from the UK where possible. The Eurozone is where they’re trying to develop much of their new business and they are also making in roads in Russia and Turkey with China and India as targets as well.

To view the presentation, please click here.