Drinks Ireland|Spirits said that despite sales and exports declining last year due to Covid-19, the country's spirits sector showed resilience.
The group's annual market report shows that spirits exports from the Republic of Ireland declined by 15.97% last year from €1.18 billion in 2019 to €990m.
But this came on the back of a number of years of strong growth, with the value of exports growing by 83.6% between 2014 and 2019 before the outbreak of Covid-19.
The drinks group said last year's decline was partly due to to the collapse of the Global Travel Retail (GTR) sector because of Covid travel restrictions.
Before Covid-19, the sector was the second largest market for Irish whiskey and fourth largest for Irish Cream liqueur.
Recovery in this market could be slow, according to the report, and will likely go hand in hand with international travel returning to a pre-pandemic level.
Drinks Ireland|Spirits said that global sales volume of Ireland's spirits that are protected by EU Geographical Indications - Irish Whiskey, Irish Cream and Poitín - declined slightly, from 20.41 million nine litre cases in 2019 to 19.67 million nine litre cases in 2020.
The most popular markets for these spirits last year were the US, the UK, Canada, Germany, and Ireland respectively.
Today's report shows the closure of hospitality venues here also had a negative impact on the sector, particularly for brands that rely heavily on the on-trade.
Overall sales fell by 4.8%, from 2.42 million nine litre cases in 2019 to 2.3 nine litre million cases in 2020.
But some spirits categories benefited from the consumer shift to the off-trade in Ireland, with Irish Cream Liqueur sales growing by 26.5%.
Meanwhile, the new "ready to drink" (RTD) products hit the shelves over the course of 2020. These include spirits based RTDs and hard seltzers.
Drinks Ireland|Spirits pointed out that as a category hard seltzers did not exist in Ireland in 2019, but nearly 90,000 cases of various brands were sold last year.
Meanwhile, sales of gin in Ireland fell by 6.6% between 2019 and 2020, but gin has seen remarkable growth in recent years with sales up by 184% between 2014 and 2019.
Forecasts for the next five-year period suggest that the growth in gin and Irish gin has not ended and that the decline in 2020 will be seen as a Covid-19 related blip, Drinks Ireland|Spirits said.
Today's report also shows that while sales of vodka declined by 10.2% last year, it remained Ireland's most popular spirits drink with a 31.6% market share in the category.
It was followed by Irish whiskey (26.3% market share), gin/Irish gin (14.04%), and rum (7.4%).
Bryan Fallon, Managing Director of Heaven Hill Ireland, which owns Carolan's Irish Cream Liqueur and Irish Mist Honey Liqueur, and Chair of Drinks Ireland|Spirits said today's report shows that the spirits sector did not escape unscathed from the Covid-19 pandemic.
"Irish hospitality venues are a vital component to the continued growth and prosperity of Ireland’s spirits and craft spirits sector, allowing companies to engage with consumers, so their closure was very much felt," Mr Fallon said.
"Despite this, the resilience shown by the spirits sector last year in the face of the loss of one of the main consumer channels was remarkable, with producers responding with an increased emphasis on the off-trade and a focus on ecommerce," he added.
Mr Fallon said that apart from Covid-19, a number of other challenges remain for the drinks industry including Ireland’s high level of tax on alcohol, which he said is unsustainable and uncompetitive.
"We are calling on the Government to reduce excise tax by 7.5% in Budget 2022. An excise reduction would boost post-Covid tourism and secure sustainable, long-term growth for Ireland's drinks and hospitality businesses in 2022 and beyond," he added.