Putting the spin on gin

Mainstream gin has seen a wobble in sales, but premium brands are faring better. Nigel Huddleston investigates

Davenport explores ways forward for a classic spirit

Just when it looked as if gin was making good headway, its wheels have developed a bit of a wobble. The

arrival of brands such as Hendrick's and Miller's two or three years ago brought real excitement to a category where Bombay Sapphire had offered the only news worthy of note in the previous two decades.

But on-trade volumes were down by 5.6% in 2006 which, for a market that amounts to just 520,000 cases - less than a quarter of the size of vodka - wasn't particularly good news.

This figure is balanced to some extent by the decline in value of on-trade sales by just 2.3%, suggesting some price resilience. Premium gin is doing relatively well, up by 5.5% year-on-year, leaving the mainstream segment of the market with the most problems.

Bacardi-Martini premium-brands marketing controller Sophie Bowers, whose brief includes Bombay Sapphire, says: "Gordon's has 73% share of the total gin market, so its performance dictates the overall gin figures.

"Hendrick's, Miller's, Tanqueray and ourselves are exciting new brands, doing well. It's mainstream gin that is seeing the decline."

Emporia Brands is trying to maintain the momentum of interest in new gin with the launch of its Saffron brand.

The orange-tinged gin is produced using seven natural botanicals and infused with saffron for 48 hours, using a recipe dating back to colonial days.

Emporia chairman James Rackham says: "The main blend we're encouraging is Saffron and tonic, but with a slice of orange, so we're actually altering the flavour of a gin and tonic - and changing it to something very different.

"There are some very good gins out there at the moment - Miller's and Hendrick's, for example. We want Saffron to be in the same market as Hendrick's and sitting next to it on the back bar as an alternative."

But competition is getting tough at the premium end, where there is a plethora of brands, some with the advantage of portfolio-selling alongside the market leader.

As marketing manager for gin at Diageo GB, Kirianne Green oversees a portfolio that takes in Tanqueray and Gordon's. She says: "In 2004, we saw gin really move back into growth. It is declining a bit now - but its long-term movement over the last 20 years has been heading in the right direction.

"I'm not sure that things have gone wrong - if you look at trends such as dining out, there is a move towards what we'd call mid-tempo occasions, and an increase in affluent older consumers spending in the on-trade. These factors all influence the future of gin."

Ice and a slice of the market

While Diageo expends a lot of time and energy promoting the perfect serve for Gordon's and tonic through its 360° training, it's no surprise to see it trying to make the most of the premium opportunities that exist.

Green says: "Visibility is vital. If customers know an outlet serves a great gin and tonic, we can really drive growth back into the gin category. Where pubs take up the perfect serve, they can see gin sales increase by up to 10%.

"Our work on sloe gin and tonic is proving very successful," adds Green. "For a start, it's great in terms of recruiting people into gin.

"With Tanqueray the focus is on the classic martini cocktail. It's great with tonic, but that's a different sort of proposition.

"For Tanqueray 10 [the super-premium brand] we're looking at some new serves that we'll be rolling out in the next six months or so. It's still very much at the top end and still quite niche, but it does help to drive awareness of and interest in gin."

Bowers at Bacardi-Martini says that finding new types of drinker is a key role for premium brands. She says: "Bombay Sapphire really has a taste difference. People who are not normally into gin, or those who want a lighter taste now and again, can enjoy it. It isn't a big leap for vodka drinkers to switch to Bombay Sapphire, whereas other gins might be more challenging. These trends all offer opportunities to trade people up to a premium gin."

key trends in gin

l Gin's market share is less than a quarter of vodka's

l On-trade volumes were down by 5.6% in 2006

l However, value was down by just 2.3%, suggesting that consumers are prepared to pay more for some gins

l Premium gin is up by 5.5%, year-on-year