Analysis

Today's Market Trends - Gin Essentials, Part II

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just-drinks, in association with The IWSR, presents this seven-part review of the global gin category. In part two, we consider the sector's performance on a by-market basis.

  • The Americas

There are signs of hope for gin in the US, despite a year in which sales fell again – down 1.7% in 2015 to less than 10m cases. Imported and premium brands enjoyed strong growth, and are increasingly trendy with mixologists and younger consumers.

Gin in Canada fared much better, with sales up 5.4% thanks to premium-and-above and imported brands. William Grant & Sons' Hendrick's and imports including Bacardi's Bombay Sapphire and Diageo's Tanqueray are driving growth.

  • Europe

While gin is still firmly in the ascendency in Spain, the market is evolving and acquiring a broader base – good news for standard-priced brands and the new wave of flavoured gins.

In the UK, four consecutive years of growth have made gin the hottest spirits category in the market, led by Hendrick's and a strong supporting cast of smaller brands.

Indeed, most of Europe has fallen in love with gin again: Germany and Belgium experienced double-digit sales increases in 2015, while France and Italy saw solid growth

Of the main markets, only Portugal is showing signs of peaking in the premium-and-above arena, but Greece and Turkey are also both enjoying good sales growth.

  • Asia-Pacific

Mainstream gin is struggling with a deeply unfashionable image in India, although imported brands are growing off a small base. Sales were flat in Japan last year, but there are signs of a European-style gin-and-tonic trend emerging.

The culture of drinking less, but drinking better, is benefiting gin in Australia, where healthy sales growth is split between premium imports and an increasing number of locally-produced brands.

  • Africa/Middle East

The growing trend towards white spirits in South Africa has boosted the segment, ushering in a return to growth in 2014 and 2015 after a decade of declines. It's a market dominated by local brands and Diageo's Gordon's, which has more than half the market and posted a double-digit sales increase in 2015 (lagging the market slightly). Premium gin continues to develop, especially in the urban township market.

  • Travel Retail

The Global Travel Retail channel is rethinking its attitude to gin; previously a bit-part player compared to the likes of Scotch whisky and Cognac, it is becoming more significant in line with domestic trends.

The category is led by Bombay Sapphire, followed by Gordon's – but both were overshadowed in 2015 by the double-digit growth recorded by Pernod Ricard's Beefeater and Tanqueray.

Top 10 markets for gin, 2009-2013 ('000s nine-litre cases)

Market Key Views

  • Review

Global sales of gin had a good year in 2015, reaching about 52m cases – but a sizeable chunk of those volumes remain low-priced brands in markets such as the Philippines.

  • Insight

The gin revival – the 'ginnaissance' as some have dubbed it – is focused on value over volume, with premium-and-above products accounting for much of recent growth. New launches have helped to fuel this phenomenon.

  • Forecast

While innovation has been immensely beneficial to gin in recent years, the huge number of new brands in dynamic markets such as the UK and Spain is unsustainable in the longer term. Inevitably, some will fail.

  • Strategy

Brand owners will have to work hard to maintain gin's current momentum, luring people in to try new consumption occasions beyond the traditional gin and tonic, and migrating the gin boom into a greater number of markets – especially the US.

The remaining five parts of this report will be published throughout this week.

For the just-drinks Gin Essentials content page, click here

All data has been sourced from just-drinks' joint report with The IWSR, Global Gin Insights.


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