World's drinks giants reposition gin in fight for premium
Vodka has traditionally dominated the white spirit category, but the potential for gin to steal its thunder at the premium end is being recognised. Simon Meads reviews the strategies of the drinks majors in relation to their gin portfolios to discover the winners and the losers.
These days every self-respecting multi-national drinks company needs a gin in its portfolio. And, by and large, they all do. However, as the focus of gin has evolved to modern style-led brands, there are only a handful of gins that can cut it in international competition.
Gordon's London Dry Gin by UDV
A lot of the innovation and action in the category is coming from the top end, but what is a little surprising is the fact that UDV has taken the strategical decision to remove Gordon's from its priority list of global brands.
"Gordon's gin is truly global in size and stature," explains UDV's global brand director for gin, Peter Kreutzner. "However, it has a number of differing consumer profiles around the world. Our classification, which is purely internal, has been done to allow local markets to address their marketing to meet local consumer and market needs."
Gordon's has a number of different presentations, not to mention different strengths, for both different countries and duty free, and has done so for a while. Now, in UDVs eyes at least, it is no longer to be viewed as one international brand, but rather as a number of different regional or local brands. This reassessment leaves Tanqueray in the position of being the key gin brand of the portfolio - considerably smaller than Gordon's, but without a doubt premium.
"Tanqueray is well-placed to play a role in the global white spirits market and will be supported accordingly," says Kreutzner, giving very little away as to its future. But if there is one key to this change then it is in the words "premium white spirits market". Basically, any marketeer with their finger on the pulse of the young ABCs will tell you that these consumers - in all developed spirits consuming countries - are "repertoire" drinkers.
Tanqueray in the position of being the key gin brand of the portfolio
The key to brands going against the downward spiral of the gin category has been to position themselves as premium white spirits to compete with other premium white spirits, as opposed to gins competing with other gins.
Take the groundbreaker in this realm, Bombay Sapphire. Sharon Reid the UK senior brand manager says: "Bombay Sapphire has the enormous strength of competing in both the premium gin and vodka markets with great appeal to younger, more affluent consumers."
But why just stop at just gin and vodka? Once you are into premium you can draw on a vast consumer group that could include dark rum, Tequila or even malt whisky.
"The global premium spirit sector is the only sector growing internationally on a constant basis," says Ylva Persson, international brand manager for Bombay Sapphire. "It is also a more profitable and interesting segment to compete in."
Bombay Saffire Martini Glasses: Dailey, Crisp, Rashid
All the more reason that a strong international portfolio needs a strong competitive gin on the books.
"Neither Maxxium or Jim Beam Brands had a power gin brand," says Plymouth gin managing director Charles Rolls. "So here we are - it's a great position to be in."
V&S, which owns 50% of Plymouth gin recently bought a quarter share of the Maxxium group, taking Plymouth along with it. Plymouth has now gone from being an ambitious if not maverick brand to an international brand with heavyweight backing.
It will also benefit from the support and distribution network of Jim Beam Brands in the US. However Rolls recognises that this is a tough nut to crack and says: "Increasingly in America we are going to have to spend money."
Funnily enough in the midst of Maxxium, after little more than five years, Plymouth finds itself back on the books with another gin (it was once a part of Allied Domecq and suffered at the hands of a Beefeater led strategy). And if the display at the London International Wine and Spirits Fair is anything to go by it appears to be in a more prominent position, because Gloag's was nowhere to be seen.
Gloag's will remain a niche brand directed very much at the on-trade in and around London
If that seems like an omen for the future of Highland Distiller's Gloags' gin then Maxxium were on hand to quash any speculation.
"When you have 35 brands, there is always room for a 36th," says Brian Boxall of Maxxium, pointing to the wealth of Scotches in the portfolio. Boxall believes that you can work on more than one premium brand in a category and if need be you can take a brand and direct it towards a niche. Athough he does say: "Highland are deciding where Gloag's fits in."
But according to Highland Distillers, Gloag's will remain a niche brand directed very much at the on-trade in and around London.
However, Maxxium's dilemma begs the question, that if one international "power" gin is a virtual necessity these days, is two one too many? "Our strategy with our brands is to meet consumer needs," says Kreutzner. "In the case of Gordon's and Tanqueray, in most cases, these two brands address differing consumer needs and occasions. This way we are able to manage both brands effectively."
In other words, Tanqueray will compete across the dynamic premium spirits markets while Gordon's will effectively compete in a somewhat stagnant gin market. According to Kreutzner the regionalisation of Gordon's does not mean that it will be left to disappear quietly out of the scene - it's a move sideways rather than a demotion.
"Tanqueray is well-placed to play a role in the global white spirits market and will be supported accordingly"
"Gordon's is a powerful player in many developed markets," he says. "We see the brand continuing to play a major role in these markets. You may have noticed that we continue to advertise Gordon's in the UK, Greece and a number of other markets."
The UK fine, but Greece? Is that where all the international action for gin really is? Hardly, athough it is an important maturing spirits market along with other Mediterranean countries. Spain has for example proved an immensely successful focus for Beefeater along with the US.
But people in the spirits industry believe that Allied Domecq turned their back on the UK market. And this effective refusal to compete in its own domestic market has got to have an impact on its credentials as an international premium white spirit, even though Beefeater ranks alongside Ballantine's, Sauza and Kahlua as an Allied core brand (it is also the smallest of the four at about 2.2 million cases).
According to one UK distiller, following Gordon's drop in strength on the UK market, Beefeater had a great chance to capitalise, being the only premium gin close enough to make any running. "They made an effort for the next six months. Then they raised their price and they blew it," he says.
Now, with its re-juvenated presentation comes the desire to increasingly tap into the white spirits market where Bombay, Plymouth and Tanqueray have made all the running. And the re-packaging will apparently be backed by some major marketing in the US and UK. The message from Allied on Beefeater is "watch this space".
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