Some 92% of Irish whiskey producers have said that supply chain delays have negatively impacted their recent production output, with a similar percentage expecting said challenges to continue, a new survey by the Irish Whiskey Association has found.
According to the study, while Irish whiskey exports are set to grow strongly in 2022, the sector is facing increasing cost pressures, with small-to-medium sized enterprises particularly affected.
In addition, the survey found that two-thirds of respondents said that increased delays in the delivery of materials had resulted in delays to the launch of new products, while close to four fifths (78%) said that they had 'switched suppliers' to secure a more resilient or sustainable supply chain.
Among the supply chain concerns cited by the industry are increases in malt prices, energy and general business costs and delays in international shipping.
Record Year For Exports
At the same time, the Irish Whiskey Association said that 2021 was a record year for exports, with around 14 million cases sold around the world, a 21% increase on the previous year. It noted that India, Nigeria and China are emerging markets to watch which could drive exports growth in the future.
Russia and Ukraine accounted for around 7% of all Irish whiskey sales in 2021, meaning that this year's export figures may well be down on last year, the Association noted.
Supply Chain Challenges
"Irish whiskey is facing many serious international trade and supply chain challenges, and the fact is that not all brands will grow this year," commented William Lavelle, director of the Irish Whiskey Association. "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.
“International trade and supply chain challenges increasingly have the potential to impact on trade, both at industry and individual business level. It is vital that international trade policy keeps-up, not just in reacting to threats but also proactively assessing and planning for the future.”
The group added that encouraging trade with positive partners and putting sustainability and supply chains at the heart of future international trade policy will ensure the continued growth of the Irish whiskey industry.
The survey was published as part of the Association’s ‘Irish Whiskey Global’ international trade report 2022.