Craft and niche distilleries are the future: suppliers

07 November, 2014

The explosion of niche, craft and esoteric distilleries opening around the country is set to continue – and they could even take share from bigger players, suppliers have said in OLN's Spirits Report.

A third of those polled said niche players would grow at the expense of bigger operators, while another 45% said both big and small distilleries would continue to grow.

Halewood International spirits and agency brands head James Wright said: “The constant flux of these smaller, craft operations shows that the consumer wants an experience and shows entrepreneurial spirit is driving the category.

“It creates innovation, provides more choice for the consumer and creates intrigue, awareness and experimentation.”

Others agreed that the proliferation of new distilleries has enriched and grown the market thanks to their innovation and variety. But growth will not come without challenges.

Brockmans Gin marketing director Bob Fowkes said: “Those that become brands will survive over the long term. Those that are simply product propositions will not be sustainable.”

Twenty-two per cent of suppliers said there was no more room for new players in the UK.

Emporia Brands chairman James Rackham said: “Nearly every town in the UK has a new gin distillery in it or nearby. Some are lasters and some will fail, but they do enrich the category.”

But Rachel Tranter, head of marketing and PR for the Cotswolds Distillery, which opened this year, said: “The market is saturated and there are a huge number of distilleries opening every year in the UK.

“There are inevitably going to be closures due to the competition in the market, with the growth and success being seen in those that can master all aspects of the industry – from a great-tasting spirit to effective marketing.”

Berry Bros & Rudd Spirits brands marketing director Luke Tegner said spirits suppliers could look at the way craft beer has grown and changed in the US for an example of how the market here may develop.

He said: “I think niche will grow, though some will drop out before they can make a return. It’ll be interesting to see how the big players enter or buy into niche, and whether consumers will take to their brands as they have to the charm of the smaller producers.”

Premium and niche brands are key to cashing in on consumers’ growing sophistication, suppliers say.

Tegner adds: “People are less excited by the big brands and more interested in trying small-batch discovery brands.”

Read more in OLN's Spirits Report 2014

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