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Scanning just-drink's NPD section would suggest a new gin brand is launched every day. The segment is the place to be and everyone knows it. Except, it would seem, the Americans among us. Richard Woodard delves deeper into a market that is not performing for gin like pretty much everywhere else is.

The latest spirits report from just-drinks and The IWSR considers the global prospects for the gin category

The latest spirits report from just-drinks and The IWSR considers the global prospects for the gin category

Scan through the latest Global Gin Insights report from just-drinks and The IWSR, and it's clear that the current gin boom still has some way to run. The main drivers – especially Spain and the UK – are still growing, with prospects for the latter especially bright over the next few years. These are relatively mature, established destinations, and growth in Spain's 5m-plus-case market will be harder to achieve as it reaches saturation point.

The real excitement, though, lies elsewhere.

Throughout Europe - especially in France, Germany, Italy and the Netherlands – gin's penetration remains relatively low, giving ample room for dynamic growth. This also holds true for a number of other geographically-diverse markets: South Africa, Australia, Mexico, Brazil, Global Travel Retail.

So far, so positive. But, even at the height of a boom, there are issues to confront and challenges to meet. Is the ambitious pricing seen in markets like the UK sustainable (given that growth in more mature Spain is already occurring at lower price-points)? Does the craze for strawberry/pink gin risk leading the category down a novelty cul-de-sac? And, by extension, will the continued flouting of gin's juniper-focused production regulations by some brands compromise gin's identity and character, making it little more than an offshoot of flavoured vodka?

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These questions, however, pale in comparison with the frustrating enigma that is the US gin market. By now, it should have joined the global party; instead, sales fell again in 2017, dipping below 10m cases.

The US matters for obvious reasons; even as its global share of the gin segment shrinks, it still stands above 25% (excluding low-priced variants), and it remains roughly twice the size of the number two market, Spain. 

So, what's happening? Pretty much the same thing that occurred in the UK several years ago: growth among higher-end products, stagnation and decline among standard/value brands.

It's as if the US gin market is being gradually transformed by stealth: dynamic trends at the higher end, but remaining hidden in the total market figures, overshadowed by the ongoing challenges facing standard gin.

Sooner or later, the country will reach a tipping-point, and all of that underlying potential will be unleashed and reflected in the market as a whole. In all likelihood, that has already started in 2018, and I'd expect the US to become a fully paid-up member of the global gin boom club by 2020 at the latest.

There's also a feeling in gin that the place to be is owning a fleet-footed, provenance-heavy, craft-oriented, modern gin brand, reflecting the undoubted success of distinctive products such as Puerto de Indias, Monkey 47, Bulldog, Mare or The Botanist. By implication, established, higher-volume gins must, therefore, be falling behind, eschewed by Millennial consumers suspicious of their big brand status – the symptoms of the collective corporate hangover from gin's bad old days of cheap, tepid G&Ts.

Except, it isn't really like that. Look at the global top ten gin brands in value terms (2013-17), and six are growing ahead of the market (Bombay, Tanqueray, Hendrick's, Larios, Greenall's and Puerto de Indias). Of those, only the last is a true newcomer.

The four that are lagging behind the market (none of which have declined in absolute terms) are all ranked in the top ten in the US, and all lost volumes in the country between 2013 and 2017: Gordon's, Beefeater, Seagram's and Gilbey's.

By the same token, it's no coincidence that the three biggest brands currently outperforming the market - Bombay, Tanqueray and, most notably, Hendrick's - all grew their sales in the US between 2013 and 2017.

The question of who will own the future of the gin market in the US depends on whether it follows a similar template to other countries, where the boom is already more advanced and more mature.

Spain is an encouraging example for more volume-oriented products, with growth now occurring at lower price-points than previously. Seagram's, for instance, has gained a few hundred-thousand cases there in recent years, offsetting much of the ground lost in the US; and Larios has even managed to gain market share, largely at the expense of Beefeater.

Is the same trend beginning to surface in the UK? Gordon's market share of close to 50% has been eroded significantly in recent years as the market has been transformed; but the brand had an excellent 2017, accounting for almost half of the UK's volume gains over the year.

In both Spain and the UK, younger, more agile and more on-trend gins have transformed consumer attitudes and perceptions towards gin, but that doesn't mean they've reaped all of the rewards. Larios and Seagram's have been among the big winners in Spain; Bombay, Tanqueray and Greenall's in the UK.

That should engender some optimism among the big-hitting gin brands of the US. They may have to be patient for a few years yet, but if and when the gin boom hits Stateside - and it should be when - they can all benefit.

But, it's not a given. As the tide of gin rises across the US, it will only provide buoyancy to the brands that have had the vision to move with the times, evolve with the market and learn lessons from younger, more disruptive incomers.

The gin boom may last for some years yet, but only the smart and savvy will continue to thrive.

Global gin insights - market forecasts, product innovation and consumer trends

Sectors: Spirits

Companies: Tanqueray

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