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A Great British Gin Boom - The outlook for 2017 - Industry Comment

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Late last month, the Wine & Spirit Trade Association released figures showing that in 2016 exports of British gin grew by 12%, reaching almost GBP500m (US$627m). Although the category has seen positive growth for a number of years this figure was a truly phenomenal sign of the category's international success - and there are no signs to show that growth is slowing down.

The data came as no surprise to the industry. Since 2009, global demand for premium gin has increased year-on-year and growth has accelerated dramatically for the past three. Although many trends are contributing to this gin boom, new consumers and product innovation are the driving forces behind the sector's international success. 

As we head towards the second quarter of 2017, gin brands must consider what trends will continue to drive their success and if this growth can be sustained long term.  

Mapping Success - popular markets and Millennial growth in the sector

Eric Sampers is the global brand director for English gins at Pernod Ricard's Chivas Bros unit

Across the world, consumer demand for gin is high. Significant growth is coming from markets that have a history of gin consumption, such as the UK, as consumers fall in love with the liquid again and continue to explore the innovation we are seeing throughout the sector. However, gin is also witnessing some of the fastest growth rates in markets that are new to the sector, such as Latin America where there is huge potential because per-capita consumption is currently very low.

Fuelling growth in both types of market is a new generation of consumers and a simultaneous resurgence of cocktail culture. In 2015, Mintel revealed that Millennials were some of the biggest gin drinkers with 42% of the age group suggesting they had consumed gin in the previous 12 months, compared to just 27% of over-45s. Today, as the trend towards younger drinkers selecting gin as their spirit of choice continues, this generation is becoming a driving force behind the sector's continued growth.

Cocktail culture continues to support the growth of gin as well. In Spain, for instance, Beefeater - the number one spirit in the market - has traditionally been consumed with tonic. Today, we are seeing its use in cocktails increasing. Internationally, the cocktail scene is booming with more bars specialising in mixology and focusing on their cocktail offerings. Many consumers are keen to experiment with their favourite spirits at home, too.

A Drop of Flavour for the Sector - experimentation and NPD

As new consumers experience gin for the first time, the demand for new products increases. In the UK, the number of new brands in the market has grown dramatically in the past year whilst in the US there has been a notable spike in new product launches. One particular trend driving growth for gin is flavouring. Spain is one market where flavoured gin is really taking off and, according to figures from Nielsen for 2016, flavoured gin now accounts for around 10% of the country's gin sector.

Even within the confines of the traditional London Dry Gin style, there has been an increase in new products available, thanks to the huge range of different botanicals and distillation choices used to produce varieties of the liquid. Not all of these varieties will thrive in the market in the longer term but, today, there remains an excitement and demand for them that is fuelling gin's international growth.

2017 and Beyond - What is next for gin?

Looking forward, we can expect to see continued interest in gin as new markets develop a taste for the liquid and consumption broadens across a wider audience. In particular, we are already experiencing a boom in smaller markets in line with the global gin renaissance and expect this to continue through the year. At Beefeater, we have already seen double-digit growth in many of these markets, helping to expand our global brand footprint. Meanwhile, established, larger markets will continue to evolve through premiumisation in the category, and investment in new product development will continue to be key.    

If the current trend continues we could expect to see exports pass the GBP500m level in 2017. To sustain this growth, brands must ensure their offering targets today's younger, international gin drinkers and that their strategy focuses on innovation that appeals to this varied market.

Maintaining growth of this level may be challenging, but gin is one of the most dynamic categories in the spirits industry and there are no signs that the gin boom is dying down this year. 


Sectors: Spirits

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