With global gin volumes set for even more growth, Richard Woodard examines what’s next for the booming juniper-based spirits category
Rumours of the gin boom’s demise have been circulating for some time now — but there are few signs of anything other than a mild flattening of the global growth curve for the juniper-based spirit. Innovation — from exotic new botanicals to flavoured gins and RTDs — is the driving force behind this persistent momentum.
According to IWSR Drinks Market Analysis forecasts, global gin volumes are set to grow at a CAGR of 4.5% between 2021 and 2025 — decent numbers compared with the expected 0.8% CAGR for total spirits over the same timescale. The picture is even brighter for premiumand- above products, with an anticipated 2021-25 CAGR of 11.4%. In market terms, the IWSR expects Brazil, South Africa and Russia to be the prime drivers of this growth — an illustration of the fact that, for all its maturity in countries like the UK and Spain, gin still has plenty of headroom for expansion around the world.
“The two regions that are particularly interesting are South America and Eastern Asia,” says Adam Dobson, global sales director at Silent Pool Distillers. “South America, specifically Brazil in this case, has a fast-growing consumer base who are willing to trade up to Western brands and see the possession of them as a social status, much like some Asian countries.” On Asia, he adds: “The biggest innovation opportunity has to be moving gin into the luxury space. Millennials aren’t following in their parents’ footsteps and are looking for Western brands (and liquids) to explore, and gin could be very well positioned to meet those needs.”
Multiple markets of promise
Gin has multiple markets of promise in 2021, but the US, for so long a gin underperformer, remains arguably the biggest prize — and the signs are increasingly positive. “Unlike Europe, the growth of gin in the US has been a bit slow, but catching up very fast,” reports Sanjeev Banga, president international business at Radico Khaitan, owner of Jaisalmer Gin. “Gins from new origins and unique botanicals are fuelling the growth. Innovative mixers and tonic waters are helping to grow the category. Mixologists also play a very crucial part in driving the growth with interesting cocktails.”
Hannah Dickie, brand sales manager at No.3 Gin, highlights the fact that gin only makes up 3% of the US spirits market, but — quoting Impact Databank figures for 2020 — has seen its revenues soar by 25%, with volumes rising by 16%. “This underpins the ongoing premiumisation as consumers trade up, and also demonstrates the scope for the gin category in the US market,” she concludes.
Page Stoupe, Dickie’s colleague at No.3, believes gin in the US is starting an exciting journey. “We are seeing the top players in the category growing in 2021, but more excitingly for us, we are seeing more premium offerings coming to the forefront,” she adds. “Gin’s future, like the booming performance of Bourbon and tequila, lies in the premiumisation trend. Brands that are priced $25 and above per bottle tend to outperform lower-priced gins.”
There’s also still scope for expansion in European markets, for so long the epicentre of the gin boom. At Borco, communication manager Niko Odinius reports that gin sales in Germany grew by 18% in 2020 (Nielsen), while the company’s Finsbury brand has seen sales rise by 16.5% over the past three years, cementing its position as as a top three gin brand in the market.
These are encouraging developments, but as gin continues to evolve around the world, trends are becoming increasingly fragmented and premiumisation is not necessarily irreversible, as Silent Pool’s Dobson has noticed: “We’ve already seen some category compression in longtime established markets such as Spain, where consumers — who have long been marketed to by the big brands and constantly pressured to trade up — have traded down to more mainstream brands, where they know they are getting value. Brands have to be careful not to alienate their trusted advocates by continually innovating to capture that extra 5%.”
As a result, companies are pursuing an increasingly nuanced strategy tailored to the various needs of individual countries. “The approach to innovation is always going to be different in different parts of the world, due to the maturity of the market,” says Ally Martin, global ambassador for William Grant & Sons-owned Hendrick’s. “In some countries, where gin is the new kid on the block within the spirits scene, the focus is always going to be your core product. In countries where they’ve been working with gin for 200 years, they know what it tastes like — you’ve got to provide something new in addition to these core products.”
How you balance your portfolio priorities is likely to be dictated by market dynamics, suggests Bob Eastham, global sales and marketing director for Martin Miller’s. “There are two ways to approach it,” he says. “You can either establish the parent brand and then introduce innovations to complement and boost brand awareness and business opportunities, or you can open and boost new markets by having a range to propose. If your innovations express your brand’s DNA and are meaningful in the brand’s global positioning and territory, then does it matter which reference from your range gets the biggest following?”
Calm after chaos: Gin needs to rationalise for long-term future
There’s been a mildly chaotic feel to gin’s continued momentum, particularly in mature markets, over the past few years. Growth has been increasingly driven by flavoured variants and, more recently, underpinned by the rise of spin-offs such as gin liqueurs and RTD products.
Now, there’s a growing desire to rationalise, step back and fix on what’s working, and what’s good for gin’s long-term future. Beveland, for instance, focuses on a limited number of areas for flavour exploration, including gins with a local origin and new production techniques, such as the company’s Volcanic Gin (from Girona/Catalonia in Spain) and Maior Gin by Suau in Majorca launched last year.
Meanwhile, Beveland’s Jodhpur Gin taps into the more exotic provenance of India, using native botanicals for new products such as Jodhpur Spicy (chilli, cumin, three types of pepper), launched in late 2019, and Jodhpur Mandore, a citrus gin using Buddha’s hand, bitter orange and calamansi inspired by Rajasthan’s Mandore gardens.
For Jordi Xifra, Beveland’s marketing director and sales manager for the US and Canada, the exploration of flavours can — if taken too far — threaten gin’s juniper-led identity. “It’s a risk and can be a problem to the category and to some brands,” he says. “That’s why we have been very cautious in our range extension, trying to keep to our USP — exotic origin for Jodhpur Gin, using native botanicals from India, having a really unique selling proposition — and not launch too many flavours.”
It’s a view echoed by many in the industry, including Radico Khaitan’s Banga. “When we launched Jaisalmer Indian Craft Gin, we were very clear to retain the soul of gin that comes from juniper berries and not go overboard with botanicals,” he explains. “We use only 11 botanicals in Jaisalmer, and seven of these are sourced from all around India. We aim to retain gin’s USP in all our offerings.”
Maintaining gin’s true identity doesn’t have to hamper innovation. Masons of Yorkshire has released a number of flavoured spin-offs, including Tea, Pear & Pink Peppercorn, English Lavender, and Orange & Lime Leaf — plus recently launched special editions Raspberry, and Pink Grapefruit & Cucumber. All, insists director and co-founder Karl Mason, are “100% clear, juniper-led” gins. “For us, it is paramount that flavour innovation does not undermine the quality of a product,” says Mason. The company aims to look beyond “short-term flavour fads”, he says. “We’ve remained committed to producing real gins, and using only the highest-quality ingredients, even when we’ve seen the market flooded with sweet and brightly coloured liquids. Interestingly, our very first gin to launch, eight years ago, Masons Original, continues to be our best seller.”
Other distillers stay firmly out of the ‘flavoured gin’ camp, using an ever-wider array of botanicals to give a new spin using native botanicals from India, having a really unique selling proposition — and not launch too many flavours.” It’s a view echoed by many in the industry, including Radico Khaitan’s Banga. “When we launched Jaisalmer Indian Craft Gin, we were very clear to retain the soul of gin that comes from juniper berries and not go overboard with botanicals,” he explains. “We use only 11 botanicals in Jaisalmer, and seven of these are sourced from all around India. We aim to retain gin’s USP in all our offerings.”
Maintaining gin’s true identity doesn’t have to hamper innovation. Masons of Yorkshire has released a number of flavoured spin-offs, including Tea, Pear & Pink Peppercorn, English Lavender, and Orange & Lime Leaf — plus recently launched special editions Raspberry, and Pink Grapefruit & Cucumber. All, insists director and co-founder Karl Mason, are “100% clear, juniper-led” gins.
“For us, it is paramount that flavour innovation does not undermine the quality of a product,” says Mason. The company aims to look beyond “short-term flavour fads”, he says. “We’ve remained committed to producing real gins, and using only the highest-quality ingredients, even when we’ve seen the market flooded with sweet and brightly coloured liquids. Interestingly, our very first gin to launch, eight years ago, Masons Original, continues to be our best seller.”
Other distillers stay firmly out of the ‘flavoured gin’ camp, using an ever wider array of botanicals to give a new spin to gin’s juniper core. Martin Miller’s, for instance, launched two seasonal variants during 2020: Summerful, using rosemary and Arctic thyme; and Winterful, with cinnamon and mandarin. “We will continue exploring quality innovations of this type, and which remain juniper-led,” says Eastham. “Some of the products out there are just basically flavoured spirits and have lost their gin DNA by going too far away from juniper. The UK and EU definition of gin is one which defines juniper as the lead botanical and dominant taste. Many flavoured gins forget that.”
But, when you see the kind of success enjoyed by flavoured gin variants of big brands, such as Gordon’s and Beefeater, the temptation to abandon such scruples can be hard to resist. “While purists will shout from the rooftops that the category has been compromised, you’d be hard-pushed to find a blue-chip gin brand complaining about the incremental value flavours have added to the category in the last three years alone,” says Silent Pool’s Dobson.
In the end, it’s a question of balance — and having a regard for the long-term strength of the category, rather than swaying in the wind of every short-term trend. “I’m never going to be one to criticise people trying to explore new areas of flavour within gin — that’s something that we’ve done since we first launched, and it’s a practice that exists in every spirits category,” says Martin.
“But it’s important not to lose sight of that predominant nose and taste of juniper that serves as the core of gin’s being. Consider another spirit, like Scotch — or if you look at Irish whiskey in particular, they’re really creative, but they always stick to their fundamental principles, and gin has perhaps lost sight of that a little bit.
Although we still explore new areas of flavour, we should always place juniper at the heart of it all.” If the value of flavoured gins has been much debated in the industry over the last few years, now the same is true of gin-based RTDs and pre-mixed cocktails. For Dobson, these products “will demand some serious consideration” as gin targets a greater range of consumption occasions to drive further growth, and Silent Pool has launched its own pre-mixed G&Ts in cans — a full double measure at 8.6% ABV.
For Martin, the diversity of these products can also help break down the barriers thrown up by some people’s aversion to the ubiquitous gin-and-tonic. “They make it easier for consumers to try cocktails and new ways to explore gin,” he says. “There might be a percentage of the population who believe that the only way to enjoy gin is in a gin-and-tonic, but there are also those who avoid gin because they don’t like tonic — they would really enjoy gin if served up in a different way.
“It’s easy to forget that there’s still a lot of people out there who don’t like gin because they’ve never tried it in the right circumstances, and RTDs will be useful for them when they’re done really well.” That last point might be crucial — because there is an opposing view that questions the value of these gin spin-offs. “They unlock a need for convenience, but at what price?” asks Eastham. “When you try the different gin RTDs, can you really tell which brand you are drinking? We think one thing which has characterised this trend is that brands have gone into it without necessarily ensuring that their choice of mixer or other ingredients are as premium as they would like. A premium brand of G&T RTD with just any old mixer/tonic added doesn’t taste as good as the brand’s perfect serve.”
Category needs to stabilise
Gin’s boom over the past decade has been accompanied by increasing diversification as brand owners in a crowded marketplace endeavour to stand out from the competition. From quirky botanicals and origins to flavours and RTDs, this unending stream of innovation has helped to maintain the growth of the category.
Now there’s a feeling that fragmentation may need to slowly evolve into consolidation — of brands, of product types and of flavour. Unfettered and boundary-free new product development risks repeating the mistakes made with flavoured vodka in the US in the early 2010s, when a booming market imploded thanks to trade and consumer fatigue with increasingly outlandish products.
“Gin needs to stabilise,” says Silent Pool’s Dobson, theorising that the category will divide into three main areas: London Dry/ juniper-led; flavour-led/mixable (citrus, etc); and more adventurous variants, such as herbaceous/savoury, aimed at cocktails. “Whichever way you look at it,” he adds, “it needs to level out and will do naturally.”
Hendrick’s Martin foresees a more consumer-friendly era of simplicity and clarity of communication. “I think the way we talk about gin will change,” he says. “For a long time, spirits producers have taken themselves a little too seriously with the way they describe flavour and taste, but consumers are looking for a clearer idea of what they should expect to taste in their glass, and brands will respond with simpler flavour descriptors that consumers can more easily relate to and understand.” ●
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Hendrick’s adds to its cabinet of curiosities
Hendrick’s global ambassador Ally Martin says there’s no “linear plan” for the gin brand’s future innovations — if for no other reason than that the mind of master distiller Lesley Gracie “shoots in a million different directions”.
In the recent past, Gracie’s sensory memories and experiments have spawned Hendrick’s Amazonia, a travel-retail exclusive launched in March 2020 that used botanicals sourced from a trip to the Venezuelan jungle; Hendrick’s Lunar, said to combine “the refreshing, the warm and the floral”, it launched in the UK in February 2020 and in other key markets in spring 2021; and, now, a pre-mixed gin martini.
The latter kickstarts brand owner William Grant & Sons’ super-premium premixed cocktail range Batch & Bottle (see New Products on page 30), and is the result of a collaboration between Gracie, Martin and five international bars: Brujas (Mexico), Maybe Sammy (Australia), Nauticus (Scotland), Nutmeg & Clove (Singapore) and Yaldy (Germany). Batch & Bottle Hendrick’s Gin Martini will be launched in the UK in August, with 50cl bottles (RRP £25).
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Kranebet: When is a gin not a gin?
The gin boom has sent a number of spirits brands scurrying to develop lookalike products, with envious vodkas, such as Diageo’s Ketel One, aiming to surf the botanical wave by developing their own infused expressions.
Italian juniper liqueur Kranebet — about to be launched in the UK by distributor Hi-Spirits — might at first glance appear to be just another bandwagon-jumper, but it has in fact been produced by the Rossi d’Asiago Distillery for almost a century. Created in 1924 by an apothecary named Rossi in Asiago, a town in the foothills of the Italian Alps, Kranebet was relaunched in Italy and European export markets in 2018, with new packaging and positioning.
Distilled using a bain-marie system and using botanicals including juniper berries, gentian root, cassia bark, coriander and wormwood, Kranebet remains technically a liqueur, although the sugar level has now been cut to 10% (the legal minimum) in line with market demand. But it has many gin-like qualities, from its botanicals to its alcohol level of 40% ABV, and its signature serve with tonic water, the KranebeTonic.
For Hi-Spirits, this leaves it well-placed to exploit a move away from the sweet flavoured gins currently in vogue. “As the consumer’s palate matures,” the company says, “consumers will need to be recruited into less sugary drinks. Therefore the transition to Kranebet and KranebeTonic is the perfect step away from flavoured gins and into more traditional, juniper-led spirits.”
