It's hip to sip

14 March, 2014

Comedian Dylan Moran once said that to drink gin you have to be 45, female and sitting on the stairs, because gin isn’t really a drink – it’s more a mascara thinner.

But in recent years an explosion of exciting small-batch distilleries, ultra-premium lines and innovative flavour extensions has seen gin shake off its “mother’s ruin” tag and emerge as one of the only success stories of the recession-hit drinks market.

Latest Nielsen figures show the off- trade gin category has defied the duty escalator to grow 0.2% in volume and 5.8% in value in the year to February 1 – making it worth more than £340 million.

Chic bars across the UK and the wider world are drenched in Hogarthian levels of the juniper-based spirit – with drinks such as Tom Collins, Bramble and Martini dominating cocktail menus – and the trend has filtered into the off-trade as shoppers recreate these drinks at home.

Gin is now very much a unisex drink, according to the Gordon’s marketers, while their Hendrick’s counterparts add that “gin is no longer a drink for the older generation – new brands have firmly established the category as the spirit of choice among a sizeable younger population”.

This resurgence has been coined the “gin craze”.

The original gin craze began in the 18th century colonial era, when it became the working-class spirit of choice. It dominated the white spirits market until the 1950s, when mass- produced vodka landed in the UK and obliterated it.

Gin became primarily confined to retirement complexes and country clubs and limped through decades of stagnation. But then it suddenly became cool again – not just among Mayfair bartenders, but also with shoppers across the UK.

Gordon’s marketing manager Katerina Podtserkovskaya says: “Lots of research suggested that, when the recession kicked in and years of prosperity stopped, consumers were looking for confidence and stability in their lives and apparently gin was the category that ticked the boxes.

“It has heritage and authenticity and there is more to it than a spirit such as vodka. It has botanicals that make it versatile and exciting.”

Caorunn’s global brand manager, Ibolya Bakos-Tonner, adds: “Gin is overtaking vodka in the category and it is now seen as the ‘it’ drink. Consumers are looking for exciting flavours that can offer more substance than vodka. The gin category is evolving with brands introducing gins with heritage, new flavours and botanicals.”

The vodka category is still more than four times bigger, but gin is slowly making up ground – and learning from its great rival by becoming increasingly innovative to spark further growth.

Gordon’s has just followed up the launch of its Crisp Cucumber variant with Gordon’s Elderflower, which is backed by a seven-figure marketing campaign, and Podtserkovskaya says: “Flavoured vodka is a massive category. Innovation is essential to gin, but it was missing until very recently, when Gordon’s started doing it on a large scale.”

She predicts that the elderflower variant will eventually account for more than a tenth of Gordon’s sales.

Gordon’s is the market leader, with Podtserkovskaya claiming it accounts for 48% of UK gin sales, but growth in the category is coming from premium gin, which accounts for around a fifth of total sales and is up 14% in value and 8% in volume (Nielsen, year to February 1).

Nick Temperley, head of Diageo Reserve Brands, says: “The gin category is strong, with premium gin in particular driving growth as consumers continue to explore the category and search for premium brands with a story to tell.

“Tanqueray is a brand with a fabulous British heritage and strong bartender following – huge drivers for those wanting to be seen as knowledgeable about the brands they’re drinking. This is helping to drive the growth of Tanqueray, which is up 8% in volume and 14% in value.”

Chris Shead, off-trade channel director for spirits at Pernod Ricard, says: “We believe the gin category will continue its resurgence over the next year, helped by the trend for premiumisation, with consumers more willing to trade up to celebrate or create an occasion.

“Beefeater has tapped into this trend by launching Beefeater Burrough’s Reserve – a hand-crafted, ultra-premium gin unlike any other.”

Beefeater is experiencing double- digit growth in the off-trade, up 11.4% in volume and 16.9% in value and Shead expects the 43% abv Burrough’s Reserve –which launched last summer in prestige off-trade retailers with an rrp of £70 – to drive further progress.

Shead adds: “We will also see brands increasingly choosing to innovate and carry out exciting marketing activity in order to tap into the growing gin audience.”

James O’Connor, senior brand manager for Hendrick’s, says: “Gin will continue to grow as a category, driven by the premium end of the market.

“Hendrick’s is the leading super- premium gin in the UK – year-on- year volumes are up 16% with value growing ahead of that, up 24%.

“It’s both versatile and varied in a way that few other spirits can claim to be. It’s also a wonderful category to explore, from a consumer, bartender or even media point of view – there are so many brands and so many stories to tell.

“Gin has come a long way from Dutch courage and mother’s ruin.”

Multiples account for 90% of gin sales, according to Nielsen, but independents looking to differentiate have a plethora of boutique producers to choose from.

In a recent Hot List poll, OLN asked UK retailers and opinion-fromers for their favourite gins, and the top two were The Botanist and Warner Edwards, ahead of more established brands such as Martin Miller in third, Tanqueray in eighth and Hendrick’s in tenth.

Tom Warner, co-founder of Warner Edwards, says: “People go to independent stores for recommendations by knowledgeable staff and to find specialist products with true provenance, rather than a generic shopping experience.

“Warner Edwards delivers a truly artisanal product – it is handmade, which provides a great story. We do not sell to supermarkets, which offers a genuine point of difference for independents.

“Consumers are becoming more discerning. Increasingly they expect the source of their food and drink to be traceable. Products that have real stories around them are the way forward and this is where craft distilleries really deliver.

“The supermarkets fight over pennies with mass-produced products, but the exciting small batch end of the market provides interest for independent retailers.”

Another emerging brand is Brockmans, which is growing 40% year on year in the UK and has just won listings in the US.

Director Bob Fowkes says: “New though it is, Brockmans is already served in some of the UK’s best bars, hotels and restaurants. While unmistakably a gin, because its flavour profile is so very different from anything else it has even converted some previously confirmed non-gin imbibers.”

But with more gin brands than ever in the market, there is a danger it could become saturated and leave retailers with tough choices when planning a range. “We see an increasing need for differentiation in the gin category as the market has become crowded,” says Stephen Loftus, brands director at Quintessential Brands, supplier of third best-selling UK gin Greenall’s, which recently grew sales by 35% to become a million-bottle-a-year brand.

“We see the growth of more distinct flavour profiles, such as our recently launched Opihr Oriental Spiced Gin and brands aimed at specific target consumers, such as Bloom gin’s focus on female consumers.

“We also see the need to bring new gin drinkers into the category and we believe Greenall’s can play a critical role in the category, due to the brand’s contemporary packaging design and accessible flavour profile.”

James O’Connor, senior brand manager for Hendrick’s, adds: “The past few years have seen a huge number of new brands entering the category, as well as more established mainstream brands waking up to the opportunities in gin and beginning to invest and innovate.

“This year we’ll begin to see the market rationalise, with retailers taking a look at their ranges and focusing on those brands that earn their space and drive value.”




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COMMENT

Mass entertainment

Do anything too regularly and it soon becomes a chore. Stop sniggering at the back. It’s as true for wine tasting as it is for data entry. I know, poor us. Try telling anyone with a normal job how unlucky we are and I doubt you’ll get much sympathy, but the fact remains that there are thousands of different wines and most of them taste pretty average.

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