Gin, Juniper and Brexit – are producers ready?
As the threat of a no-deal Brexit looms closer, what will the impact on the UK’s boom gin industry and producer’s ability to import the all-important botanicals necessary to produce the liquid? Arabella Mileham reports
There’s nothing more British than a G&T – a quintessential drink that gained notoriety during the 18th century and has been enjoying a renaissance in recent years, sending sales of the juniper-infused drink stratospheric. The UK has been at the forefront of the gin renaissance of the past 20 years, which has seen the number of English distilleries overtake those in Scotland for the first time, rising from 23 in 2010 to 166 in 2018, thanks to loosened regulation and growing sales.
Total UK gin sales hit a record £3 billion in the year to May 2019, with exports of £730 million and domestic sales of over £2.3bn, or 76 million bottles, which is predicted to surpass the 100m bottle mark within the next year. However, a year ago, the Wine and Spirit Trade Association (WSTA) issued a stark warning that a no-deal Brexit – which at the time of writing remains dangerously close – means the UK could be faced with a “gin drought” thanks to the disruption of its key botanical, juniper. Without juniper, gin simply isn’t gin, and as this and other key botanicals are imported primarily from Europe, with Brexit looming ever closer, how problematic is this going to be to the booming gin market?
“As we get nearer the end of October, I do see more concern among the industry,” James Hayman of Hayman’s Gin told the drinks business. “If we leave with no deal, it will make things more challenging.”
The explosion in gin sales in recent years has already pushed up demand for juniper and other botanicals, supplier Tommy Haughton of Beacon Commodities says, estimating the increase in demand by as much as 300%-400%. Much of this has been fuelled by larger producers adding new lines rather than new craft producers on the scene, he notes, as well as demand from the baking, pharmaceuticals, cosmetic and aromatics industries keen to cash in on gin’s popularity.
According to John McCarthy, head distiller at Adnams, in some instances, this has led to temporary supply issues, “Producers now have lots of competitors, and the chances of not being able to get a botanical because lots of other people have ordered it is a more recent threat, Brexit or no Brexit,” he says. But as gin’s star has been rising since the early 2000s, key juniper producers in Macedonia, Umbria and Tuscany have had time to invest in increasing production to meet demand.
“These countries and regions have invested huge sums to make sure the market can be fed with quality and quantity,” Gina Duke of G&I Spirits says.
Prices have risen by around 6%-8% because of the high demand (once the Brexit-related currency fluctuations of around 15% are stripped out, Duke points out), which keeps the momentum for pickers to gather in the crop from inaccessible high mountains throughout the autumn. As Haughton says: “The price need to be right, as it’s a bloody difficult job.”
Availability, therefore, shouldn’t be a problem, because this year’s crop won’t come on stream until next year, and 2018 was a good year. As Charles Maxwell of Thames Distillers, the third-party gin distiller responsible for many UK and global brands, notes, the biggest fear lies in the threat of hold-ups at the ports.
Logistical log-jam
“There will an appalling logistics logjam between Europe and the UK while not just juniper but everything else is sorted out,” he notes, although he predicts this will be a “short-term hiccup, not a long-term issue”.
“Once we all know what we’ve got to deal with, and our importers know what they’ve got to deal with it’ll settle back down again, but we could be in for two to three months of disruption of the current standard service.”
As yet, it is still unclear what extra documentation might be needed to clear customs and the port authorities, and Haughton says the biggest concern remains loss of control of shipments coming in.
“I don’t think there will be any issues getting it in, but the longer it sits there, the greater the risks,” he says. “But the noise [from HMRC and the port authorities] is ‘let’s get it in to try to avoid delays’.”
But Haughton remains confident that contingencies such as increasing botanical stocks from just over a year’s supply (14 months) to 18 to 24 months, and trialling sea-shipping routes to avoid the congested Dover-Calais or the continent-to-Felistowe routes, will prove effective.
But as James Hayman points out, the crux of the problem is how long it takes to agree a new relationship. “Everyone’s taking provision to stock for the rest of the year; we’ve got European customers who’ve taken three to six months of extra [liquid] stock to allow for a bit of a bumpy period, we’ve built up our stocks of gin, we’re trying to bring more raw materials in of everything – although the storage space is an issue – we know there are botanicals that are in the UK ready to be used – but how long it goes on for is our prime concern.”
Despite this, Simon Williams, group operations director at Quintessential Brands Group, which producers around 60% of the UK’s gin, including brands such as Greenall’s Original Gin, Bloom Gin, and Opihr Oriental Spiced Gin, as well as 20% of the quality gin around the world, remains unconcerned.
“While the impact of Brexit on the drinks industry is still unclear, we are confident that we have all the right provisions in place to ensure the impact on the business was minimal in regards to supply,” he says. “So we are well-prepared for all eventualities.”
But it’s not only incoming traffic – currently almost half of UK gin’s total exports (46%) are sold into the EU. As Hayman notes: “If it becomes harder to buy products including gin from the UK people will source them from elsewhere. As much as we talk about a gin renaissance in the UK, it’s actually a global renaissance all around the world.”
Countries snapping at the UK’s heels includes Australia (which has gone from one gin distiller in 2011 to over 100 in 2019), South Africa, increasingly South America, and Japan (although Spain, where the ‘gin-naissance’ began, may now be “at saturation point”, Haughton says).
“I hear people talk about gin as a great export in the UK – and it is – but people have other options, and that’s being forgotten. If it becomes more difficult, or more expensive or there’s more paperwork, will that push them away from buying British products, including gin?”
This is more likely to affect newer distilleries that are looking to exports to fuel their next phase of growth, he admits, and Duke of G & I Spirits agrees that the UK’s position is unlikely to be toppled.
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“With the UK producing the most gin, and countries around Europe consuming the most, I cannot see Brexit getting in the way – the consumer will pressurise whoever they need to ensure a ready supply of their favourite tipple,” she says.
And as Simon Woplin of Ditchling Spirits points out: “The consensus, as with all thing Brexit, is that things might be OK – so you kind of hope for the best, but prepare for the worst. As with any challenge, you find a way.”
Can British -grown Juniper plug the gap?
As a result of Brexit fears, some smaller producers have taken steps to future-proof the business by planting their own juniper. For example Becketts Gin is made using juniper berries from the National Trust’s Box Hill in Surrey while Naomi Joy of Vicars Gin has planted around 100 plants on her estate in Oakhampton in Worcestershire. Although the first harvest won’t be until 2025, she is hoping not only to fulfil her own juniper needs, but also become a stockist for other small gin producers.
“Our long-term goal is to grow the bulk of the botanicals needed for our gin ourselves. At present, coriander is grown on the estate, but we have plans to introduce Norwegian Angelica and orris root to the ground next year,” she explains, adding that this also taps into the growing trend for sustainability and hyper-localisation.
“If we can producer our own juniper, not only is our stock need satisfied, but we will be able to reduce our carbon footprint as a business in the process as transporting botanicals from the middle of Europe to the UK costs a lot of money, and obviously entails a long passage across Austria, Germany and France.”
However, Gina Duke of G&I Spirits argues that the UK simply doesn’t have the long hot summers that are needed to develop the oils and give juniper its distinctive flavour.
“Colder climates hamper this and they become under-developed, affecting the quality and essence of the spirit,” she says. Tommy Haughton of Beacon Commodities agrees that UK-produced juniper is ‘interesting’ for small producers, but is only ever likely to remain a niche concern.
Key botanicals and where they come from
• Juniper: The most important botanical, juniper is harvested between October and December from wild crops in Tuscany and Umbria, Macedonia, Serbia, Kosovo, Serbia and Slovakia. Although demand has increased, the abundance of juniper bushes means opportunities exist – but the harvest is dependent on good weather to ripen the fruit and for harvesting itself, in terms of accessibility and foragers to collect the berries. Colder, wetter weather pushes the price up, as more time and care is needed to dry the berries. There are also longer-term pressures as increasing urbanisation mean fewer people remain to forage for berries.
• Coriander, a commercial crop that is grown in India, Bulgaria, Russia, Morocco and China, has seen commodity prices increase in recent months, thanks in part to lower planting this season and a lack of monsoon rainfall in India.
• Cardamom comes from India, Indonesia, Guatemala, Nepal, and Bhutan. The price has increased recently because of floods in Kerala in 2018 lowering yields, followed by a drought this year.
• Angelica, from Belgium, Germany, France and Poland.
• Orris root traditionally comes from Florence, Italy, but Morocco is a new and growing supplier. It is prized for its ability to fix flavour and smell within a bottle of gin.
• Citrus peel, primarily from Spain, Turkey, Egypt and Morocco, has seen fluctuations in price as demand grows in the food, drinks, pharmaceutical and aromatics industries.
