What is the future of gin?

Britain is now home to 315 gin distilleries – more than double the number that were operating across the nation five years ago.

New figures from HMRC show that 49 more distilleries started operating in 2017 and seven closed, adding a further 42 distilleries to the total number operating in the UK, according to the Wine & Spirit Trade Association.

Gin sales in the on-trade grew by 15% in volume in the year ending 9 September 2017, worth £729m, up 19% on the previous year.

The UK drank the equivalent of 1.32bn G&Ts in the 12 months to 9 September 2017 and the nation hit its largest ever gin exports in 2016 – worth £474m, which is about 180m bottles.

Needless to say, gin is a storming success, becoming the in-vogue spirit of the decade. But why has it gained such popularity and how long could its spell last for?

Diageo Reserve, which produces Tanqueray, puts the gin boom down to something simple – the spirit is exciting.

Head of Diageo Reserve GB Nick Temperley explains: “It is tough to think of many spirits categories that have achieved what gin has in recent years.

“The ‘gin renaissance’ is one of the most prominent consumer trends in the past 10 years, and why? The answer is simple; gin is exciting.

“It’s great balance of flavours, versatility and interesting botanicals have captured the imagination of bartenders and we are seeing some really innovative serves.

“Consumers are also looking for interesting flavours, premium quality and, above all, a really positive experience and gin delivers on that time and time again.

“Gin is the gift that keeps on giving, but it is a crowded market. Standing out is the challenge, and we know that licensees can’t keep a bottle on the back bar that doesn’t deliver on sales.

“The gin category will continue to grow as long as we bring fantastic products to the market and continue to inspire bartenders and, ultimately, consumers.

“Gin sales will continue to outstrip other star-performing categories and super-premium gin will hold its prominent status.

“So, what does the next generation look like? The popularity of flavoured gins will only increase. We are going to see a continuation of new craft gins emerging, botanicals will be more ambitious and the garnish and final ‘Instagrammable’ moment will be even more important.”

Pushing up profits

Gin brands continue to pop up, and going premium can help operators push their profits up too.

Coca-Cola European Partners trade communications manager Amy Burgess says: “The drinks market has been experiencing a ‘ginaissance’ over the past few years and it shows no sign of slowing down any time soon.

“New gins are launching regularly, from independent craft offerings to new flavours and variations of popular brands, leading to almost a quarter more gin being sold than last year.

“Premium and super-premium spirits are experiencing strong growth and gin is one of the spirits driving this trend.

“With three quarters of consumers buying premium spirits when in a pub or bar and nearly half saying they would rather order a premium spirit when buying a long mixed drink, premiumisation is likely to continue to drive growth in the drinks market in years to come.

Yet Burgess warns it is important to note that standard spirits still make up the majority of the spirits volume sold in the on-trade. In line with this, more than 80% of mixers served are standard variants.

“As with most soft drink categories, consumers are always looking for choice and research shows that 63% of people drink more than one mixer brand,” she adds. “Good-quality standard mixers remain the biggest sellers because
consumers choose classic brands they know and trust as their go to option.”

Choice and innovation are the two things that attract drinkers to gin, according to another drinks company.

Spirits brand Edrington Beam Suntory  (formerly Maxxium) senior brand manager Marco Di Ciacca says: “There’s no denying gin’s continued popularity over the past few years and there’s still room for significant growth within
the category.

“As consumers continue to place great importance on craftsmanship and provenance – and that’s not just in the gin sector but also other spirits, wine and beer – there’s space for more unique and distinct drinks to enter the market and enjoy real volume and value growth.

“The fundamental explanation for this is drinkers are attracted to choice and innovation – something gin offers.”

While the larger brands predict the gin boom shows no sign of slowing, ‘nano-distillery’ The Gin Kitchen in Dorking, Surrey, also echoes this.

Co-founder of The Gin Kitchen Kate Gregory says it is down to the spirit’s versatility that it will continue to be the go-to tipple.

She says: “The most amazing thing about gin is that it is so creative. You have complete freedom to use of any part of almost any plant.

“There’s creative freedom and that resonates with British people. We are a very creative yet ingenious nation.

“We like that combination of creativity, science and technology and that is attracting a load of people to the distilling world, where you mix art and science.

“You have the same level of gastronomic creativity as a chef would have. That, married with chemistry and engineering.”

“What you can produce is infinite. Gin never gets boring, there will always be something new and exciting.”

While gin is here to stay, the future will bring the spirit further into the ‘flavoured’ category, Gregory predicts.

She adds: “I can’t see the bubble bursting but I can see the market settling down and maturing at some point. There is a lot of hype about gin at the moment.

“It has been about different flavours for the past five years or so. It started being very juniper-led and while juniper still has to be main ingredient for gin, it is taking a back seat and people are being creative with other ingredients.

“I see that continuing. At the moment, there are flavoured gins that have had things added to them to change the colour and taste.

“They do seem to be gaining in popularity but I see good-quality, distilled gin still being dominant in the future.”

Gin is here for the duration and operators need to take note to keep up with the trends.