Gin: Too big to fail?

The gin category has enjoyed explosive growth in recent years, with hundreds of new brands being founded. Phoebe French examines the popularity of the sector, but asks whether this amazing growth is sustainable in the long run.

THE RAPID rise of any drinks category inevitably begs the question: when will it fall? Many have predicted gin’s demise, but as yet have not dampened its spirit. Last year, gin sales in the UK’s on- and off-trade surpassed £1 billion for the first time, with the latest figures from the Wine and Spirit Trade Association (WSTA) showing UK gin exports to stand at around £500 million, an increase of 32% in the past five years.

The UK produces more than 500 gins, with around 6,000 worldwide. HMRC says the number of distilleries in the UK has risen from 128 in 2012 to 273 today, an upturn that gin has undeniably affected.

But is predicting the end the best way to forecast the future? As Fairfax Hall, co-founder of Sipsmith, tells the drinks business, the perception of the gin market has altered during the modern gin renaissance, so it now “has more in common with the stratification of the whisky category than other white spirits”.

Gin has carved itself a niche in the British, if not global psyche. Its versatility is its main strength. While the current growth rate will undoubtedly tail off, will the gin bubble ever truly burst? Perhaps we should be asking what does it take to survive in an increasingly competitive market, and what is next for the category?

Everyone loves a good story about a gin, whether its made from scratch using rejected, wonky potatoes or created in a copper still, crammed into a residential garage in west London with a hand-written alcohol licence. These stories, however, are more than just amusing anecdotes. While price, bottle design and branding are all essential ingredients, it is the sense of place and provenance that are helping modern gin brands to prosper.

Wild surroundings: Hepple Gin.

Bombay Sapphire was the first to capitalise on the thirst for authenticity. Bursting onto the scene in 1988 in a beguiling blue bottle, it proudly promoted the botanicals contained within: ‘juniper berries from Italy’, ‘lemon peel from Spain’, ‘coriander seeds from Morocco’, and so the list continues.

The upsurge of craft distilling in the 2000s has given rise to a focus on ‘location’ as well as ingredients. James Chase, head ambassador of Chase Distillery, founded in 2008 and the first in the UK to truly champion the field-to-bottle approach, makes the point: “You would never dream of buying a bottle of wine over £30 without knowing the vineyard, winemaker or terroir – why then, should it be any different for gin?”

Local identity has become synonymous with Scottish gin in particular. The Botanist, which uses 22 botanicals foraged from the island of Islay, has now been joined by a cornucopia of Scottish distillers that are using their natural surroundings as inspiration. These include the eponymous Harris Gin, which uses locally sourced sugar kelp; Caorunn and its use of five Highland botanicals, including bog myrtle, rowan berry and heather; and Eden Mill’s seasonal hickory-infused Golf Gin, a nod to its St Andrews connection and the bygone days of hickory-shafted golf clubs.

3 Responses to “Gin: Too big to fail?”

  1. martin says:

    Interesting thoughts, and by and large mostly agreeable, but there are different gin strategies out there, three of which spring to mind; regional and/or local botanically-based or biased gins, craft/artisan gins using the best available botanical ingredients regardless of origin, and then there are those gin brands that are merely that – not even distilled by the owners, but simply a farmed-out recipe gin that relies on marketing and PR, a brand exercise capitalising on the resurgence of the category! Whilst writing another strategy has occurred to me – the big brand owners/distillers, also cashing in on the popularity of the category with pseudo-craft gins and even with the cynical use of labelling terms such as ‘handcrafted’ which the big brands are most certainly not! But the question about longevity is a valid one. My opinion is that quality will last, as it does with most things, not just gin. The regional products may hit a ceiling before others, as more regional products appear then a customer’s loyalty is more narrowly defined if you ask me, and customers only have so much cupboard space for gin, not to mention the cash to pay for it. Hopefully the band-waggoning brands will get bored at some point and move on to something else, as I don’t think they contribute very much of value to the category, just muddy the pond! And I have just thought about another entrant to the market – the hobbyist! These guys are at least distilling their own gin in the main part, not commissioning a big player to do it foe them, and for that they deserve respect, but actually they risk the most in my mind as they generally have no previous history in drinks, let alone spirits, and are very often following other professions or careers. These guys seem the most likely to fall first, but time will tell.

  2. R says:

    As with anything, quality is King\Queen. Some of the bigger brands will always be there, they have the might and capital reserves to ride out a small drop in market share, not to mention the lower distribution costs vs smaller craft distributors. In my view a key hurdle to growing the brand is the removal of the effort barrier to obtain one of these products. Nearly all supermarkets carry Gordons gin, easy to access, drop it in with the shopping, chug it with some Schweppes tonic, its acceptable as a beverage, its also obtainable to most of the +18 population. But take a small hand crafted gin that contains unicorn hooves and phoenix feathers, chances are it will be only sold in a small shed on the road to Shegra.
    In order for the smaller producers to get their product to market there needs to be greater cooperation between the producers and the giants of commerce. If the supermarkets cant sell very limited qtys of specialist spirits, perhaps its time that Amazon took the mantle and made it easier for folks to receive beverages by post, I never had an issue getting my monthly crate of wine left a the back door, Amazon force you to be in at time of delivery and anyone that has had the hell of using Yodel will attest to, its just not worth it. Existing suppliers are just way too expensive, ~£50 for 450ml of gin delivered, its Gin, not the elixir of life we are talking about….they may be one in the same, but at that price, it wont be me.

  3. Jack Keenan says:

    Bombay Sapphire was created with a very low level of juniper as USA drinkers do not care for the juniper flavour…one reason why Gin consumption per capita is much lower than the UK or Spain!

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