From traditional juniper- and citrus-accented London dry styles to the malty original Dutch version as well as newcomers infused with cucumber, lavender and bog myrtle, the gin category is experiencing a resurgence. The other white spirit has gotten a big boost from the cocktail renaissance, and gin is currently a darling of mixologists. Of late, the category has seen a lot of new product introductions, especially at the top-shelf level, which has stirred consumer awareness and also caught the attention of a younger but more sophisticated customer demographic. Marketing and merchandising efforts from producers are helping to maintain that interest. Long eclipsed by the behemoth vodka category, gin is coming into its own, sharing many parallels with its sister white spirit. Gin seems well positioned for a bright future.
‘The biggest trend is gin itself: It’s back!,’ declared Matt Pechman, Diageo brand director, Gin. ‘There is an explosion of new entries into the category and consumer and trade interest is being piqued.’
The Cocktail Connection
Gin’s renewed popularity has advanced hand in hand with the cocktail craze. ‘Especially in the major markets, we’re seeing a lot more appreciation of classic cocktails, of which gin was definitely king,’ noted Maria Puente, senior brand manager Beefeater and Plymouth, Pernod Ricard USA. ‘Brands like Beefeater and Plymouth were very dominant in a lot of the cocktails of the past because gin was the dominant spirit.’ Indeed, Plymouth Gin has an especially rich heritage, dating back to 1793.
‘The comeback of some of the classic cocktails such as the Aviation, the Southside, the Clover Club and the renaissance of the Negroni and the French 75 ‘ all made using gin ‘ have brought the category to the forefront,’ echoed Pechman. Diageo’s gin portfolio includes Tanqueray London Dry, Tanqueray No. Ten and Tanqueray Rangpur (flavored with rangpur lime) as well as Gordon’s.
The cocktail revitalization is not limited to major urban areas but spreading across the country. ‘As interest in cocktails continues to grow in markets with still-developing cocktail scenes, the use of gin in re-created and revamped classics is imminent,’ said Rusti Porter, marketing director for Anchor Distilling Company. Founder (and owner of Anchor Brewing Co.) Fritz Maytag crafted the American dry style, Junipero, in the mid-1990s. Anchor also produces Genevieve, an American take on the Dutch genever style of gin. Retailers have noticed the cocktail connection. ‘Just like the traditional cocktails, gin is also having a resurgence,’ reported Patti Robinson, owner of Heritage Wine & Liquor in Centennial, CO. ‘The bars are doing a terrific job introducing people to those cocktails, and then they want to make the drinks at home. Just in the past week, I’ve had two requests for a Ramos Gin Fizz recipe, prior to that I haven’t had such a request in five years,’ the retailer pointed out.
Reading the Statistics
A quick glance at the statistics for gin category isn’t initially inspiring. Sales and volumes for the total category were generally flat to down last year, but a closer look at what’s really happening reveals a vibrant and exciting white spirit coming into its own.
Overall, the gin category’s volume was down 2.0% in 2011, to 10.87 million 9-liter cases, according to the Beverage Information Group’s Handbook Advance 2012. However, 2011 revenues were up a modest 0.1%, saved by impressive gains in the superpremium gin segment, up 27.9%, and a respectable 8.5% rise in the high-end premium segment, according to Distilled Spirits Council of the United States (DISCUS); volumes also saw increases for those top-shelf segments, up 23.8% and 7.6%, respectively.
‘Overall gin revenue was flat because so much of the volume tends to be in the lower-priced segments, but the high-end and superpremium categories are up,’ explained David Ozgo, DISCUS’ senior vice president of economic and strategic analysis.
Indeed, many of the leading brands showed declines in volume during 2011, according to numbers from the Handbook Advance 2012. Older, value-priced brands such as Seagram’s (-5.1%), Gordon’s (-1.3%), Gilbey’s (-3.5%), Burnett’s (-5.3%) and Fleischmann’s (-2.5) endured a tough market last year. Relative newcomer to the value segment, New Amsterdam Gin from E.&J. Gallo also saw a dip in volume of -7.4%, after a huge initial sales surge following its first two years on the market.
‘The growth is in the high end because that’s where there has been a lot of brand development. As long as those top segments are doing well, it bodes well for gin overall,’ pointed out economist Ozgo.
‘In general, the category continues to remain flat, but we are certainly seeing some significant growth within the superpremium segment, there have been a lot of new entrants into the category, which always bodes well for the health of the category,’ noted Puente at Pernod Ricard USA.
Retailers would agree. ‘My customers are reaching higher on the shelf for gin,’ said Robinson at Heritage Wine & Liquor, where the biggest volume is from the pricier gins. Top-selling skus are Bombay Sapphire, Tanqueray and Beefeater. On the lower-priced tiers, Gordon’s, Gilbey’s and New Amsterdam are the players. ‘People who are not traditionally gin drinkers are still willing these days to spend $25 to $30 on a 750 ml of a new and unique gin,’ the retailer said.
The Changing Customer
Some of the new wave of gins, with their unusual blends of botanicals that go far beyond juniper, is intriguing a different consumer than the old Gin & Tonic crowd. These new fans tend to be younger and tapped into cocktail culture and the foodie scene, with a thirst for the new and novel.
‘There exists an increased sophistication about the modern consumer, whom we have witnessed seeking out spirits with greater provenance and complexity,’ noted Jo Birkitt, Hendrick’s senior brand manager, William Grant & Sons. Adding roses and cucumber to its botanicals, Hendrick’s Gin was among a new wave of boutique gins. The Scottish gin is batch distilled and packaged in an attention-catching apothecary-style bottle. ‘We’re pleased to lead a gin renaissance that attracts gin newcomers as well as consumers who have previously tried and left the gin category because they have not been satisfied with their previous experiences,’ Birkitt added.
‘With Beefeater, where our customer has historically been a little bit older, younger consumers are much more interested in the gin category and wanting to learn about different cocktails and doing a lot at home creation,’ said Puente. ‘The tide is turning and we are seeing 25- to 35-year-olds starting to gravitate towards gin more than they have in the past.’
‘With a few of new gins, we are tapping into a whole new target group of younger consumer, something that some of the older brands have been unable to do,’ says Tal Nadari, managing director U.S.A. for Lucas Bols U.S.A. Inc. Genever 1820 was a new concept in gin when Bols introduced it to American consumers three years ago, and bartenders have embraced it. The Dutch spirit is a forerunner of the English dry style; genever has a sweet malty character from its grain base and a pronounced juniper accent. ‘Genever was the original cocktail spirit back in the 1800s,’ notes Nadari.
‘There is a consumer demographic overlap between craft spirits and craft beer,’ believes August Sebastiani, president of 35 Maple Street, the spirits division of Sonoma-based The Other Guys. ‘Anecdotally, I think the demographic tends to be younger, a foodie and living in hip urban settings.’
Stirring Up Interest
Fueling sales growth in the gin category are the new products that stir interest both on- and off-premise. These tend to be high-end introductions that get a lot of ink from print and bloggers.
‘Over the past five or six years, we have seen an explosion of new brands,’ comments David Bromige, co-founder of Martin Miller’s Gin. Launched back in 1999, the brand led the way in boutique gins; juniper and other botanicals are distilled separately and then blended with pure spring water in Iceland. ‘The category was unbelievably different back then, like chalk and cheese,’ recalled Bromige. ‘Lately some amazing gins have come to the market, particularly in America.’ One of the newest debuts is Uncle Val’s Botanical Gin, launched this spring by 35 Maple Street, which retails for between $35 and $40 per bottle. Named for company president Sebastiani’s Uncle Valerio, the batch-distilled, hand-bottled gin has a floral, citrus nose with a lemon, juniper-driven, cucumber, sage and lavender palate ‘ the same botanicals as Uncle Val grows in his garden in Italy. The gin joins Masterson’s Rye Whiskey as the second spirit in the fledgling company’s portfolio. ‘We did a lot of homework,’ said Sebastiani, ‘the gin category is growing and we saw opportunity there.’
Another American-produced gin in selected distribution for only a few years is Death’s Door Gin, made by Wisconsin-based Death’s Door Spirits (now in a distribution and marketing partnership with Destileria Serralles). The 94-proof Death’s Door is made from organic juniper berries, organic coriander and fennel seeds.
No.3 Gin, a traditional London dry style from the partnership of Anchor Distilling and British company, Berry Bros. & Rudd was initially launched last March in California; since then distribution has expanded to five more markets, New York, Chicago, Texas, Florida and Boston, with national distribution planned over the next year. The gin’s name comes from the No. 3 St. James’s Street address in London of the original Berry Brothers & Rudd shop established in 1698, and the bottle features a key used to open the door of The Parlour, one of the oldest rooms in the original Berry Brothers & Rudd shop.
Anchor Distilling is also repackaging its American-style dry gin Junipero for better visibility on retail shelves and backbars. ‘Junipero’s elegance can get lost on the back bar when set amongst other gins,’ said marketing director Porter. The new design focuses on the Junipero name with the letter J significantly called out and embossed in copper foil, according to Porter.
Building on the success of its Genever 1820, Bols debuted a new expression, Bols Barrel Aged Genever, late last year. Using an archived 19th century recipe, this version is triple distilled from a malt wine of rye, wheat and corn, blended with juniper, hops, cloves, anise, licorice, ginger and other botanicals, and aged in French Limousin oak casks for a minimum of 18 months; the gray earthenware bottle is eye-catching on retail shelves and backbars. The company is busy communicating genever’s points of difference from the London dry style to prospective customers. ‘We want consumers to think of genever less as a gin and more of a whiskey-style product,’ says Nadari. To get the idea across, POS materials include recipes for genever variations on classics like Manhattans, Juleps and Sours. A logoed Julep cup carries the point home. Right now the distribution focus is on the major markets, and to retailers who already carry the 1820 product.
Last fall saw the rollout of a new gin extension for Bacardi USA as Bombay Sapphire East was unveiled in the New York and Las Vegas markets. The new gin is the first from the House of Bombay since Bombay Sapphire was created a quarter of a century ago. Bombay Sapphire East is a London dry style infused with Thai lemongrass and Vietnamese black peppercorn for an extra dimension of flavor. Rollout of Sapphire East continues in major markets around the U.S. Introduced in late 2010 were two high-end gins from Nolet’s Spirits USA (the Nolet family is famously the maker of Ketel One Vodka). Nolet Silver Dry Gin, retailing between $40 and $50, has a distinctive taste, emphasizing a variety of aromatic fruits and florals. Nolet’s Reserve Gin is in more limited production, carrying an ultra-premium price. Another gin showcasing unique botanicals is Caorunn Gin from Scotland. The name Caorunn translates as ‘rowan’ in Gaelic; rowan berries are a key component in this spirit, along with highland heather and bog myrtle, as well as more traditional botanicals such as juniper, citrus and angelica. In total, eleven berries, roots, herbs and spices are infused as vapors from the still pass through a ‘copper berry chamber.’
Beefeater rolled out a line extension nationally last fall in Beefeater 24. The flavor of this new London dry gin is given an added fillip from rare Japanese Sencha and Chinese green teas. Master distiller Desmond Payne was inspired by the fact that the father of Beefeater founder James Burrough was a prominent tea merchant. Altogether 12 ingredients enhance Beefeater 24, prominently the teas and grapefruit and Seville orange peels. To emphasize this, the bottle features a decorative botanical design. ‘We have a lot of consumer outreach with Beefeater 24,’ said Puente. ‘Education is our tip of the spear to generate interest in the category by informing consumers and the trade about the uniqueness of this gin and how it can be used to make some delicious cocktails.’
A venerable product in a new package is Plymouth Gin. Hitting retail shelves this past March, the fresh look was introduced to reflect the gin’s super-premium quality and rich heritage dating back to 1793. Plymouth Gin is the only English gin with Protected Geographical Indication legal status. ‘With the new pack, we’re taking Plymouth back to its roots,’ says Puente. The bottle’s copper cap reminds consumers of the original copper pot still. On the oval label is an image of the historic Mayflower Ship, which departed from Plymouth for the New World. Embossed into the flint glass bottle is an icon of the Black Friar, an homage to the ancient Black Friar’s Distillery where the product is still made today.
Despite the blossoming of awareness about gin, the category still needs marketing and education to keep that interest alive. The major players are actively pursuing marketing programs.
Pernod Ricard is busy with a big consumer advertising push for Beefeater 24, as well as an increase in digital media involvement. ‘We are trying to drive awareness and affinity in consumers and spread the message that Beefeater 24 is a unique gin because of its use of tea botanicals; so the advertising talks about the tea leaves and how that really enhances the flavor,’ says Puente. There will be heavy above the line activity in nine major markets over the next few months.
For off-premise merchandising, Pernod Ricard is taking a portfolio approach, adopting the ‘English gin moniker’ for the brands; Beefeater is the only major gin still produced in London and Plymouth prizes its protected geographical identity. ‘We are under the English gin umbrella and proud of it,’ declares the brand manager. The company is creating materials to educate consumers in the off-trade about the different styles of gin and the different usages. ‘A lot of consumers don’t understand gin’s origins, different styles and the botanicals. We aim to educate them,’ declares Puente.
Tanqueray launched a new national advertising platform, ‘Tonight We Tanqueray,’ in the latter half of 2011. The campaign presents consumers with an invitation ‘to start the night with swagger,’ according to ad copy. Tanqueray will continue putting a strong focus on the ‘Tonight We Tanqueray’ platform throughout 2012, leveraging a partnership with Golden Globe award-winning actor Idris Elba, famed for his role on HBO’s ‘The Wire.’ There will also be a focus on the trade through a nationwide tour with Global Brand Ambassador, Angus Winchester. This year, Hendrick’s Gin launched their core marketing campaign named ‘Voyages Into The Unusual,’ in Houston, San Francisco, Chicago, Philadelphia and New York City. ‘An unusual cast of characters hosts a three-day experiential event series that provides the opportunity for and encourages patrons to escape from the mundane, venture beyond the known and bid farewell to the humdrum,’ according to senior brand manger Birkitt.
Winning the Gin Game
‘Gin is seeing good growth and good brand development, and this industry depends upon brand development to keep consumer interest. The fact that there is brand development in the gin category is a good thing, and will probably give it added strength moving forward,’ predicts Ozgo at DISCUS.
‘The future looks bright, certainly for the premium and superpremium gins leading the way,’ concurred Puente. ‘We are seeing positive upswing in premium and superpremium brands.’