Gin is a spirit that people have long predicted will take off in America. While the wait may continue for that Great Gin Boom, certain aspects of the category have seen positive movement in recent years.
Based on facts and figures from the Beverage Information & Insights Group, the sister research company to Beverage Dynamics, here are six trends driving gin sales in 2017.
1) Premium Gin Sells
Sales of gin have remained flat recently. The category declined 1% between 2015 and 2016, slipping from 10.23 million 9-liter cases sold to 10.12 million. Gin’s market share of the distilled spirits category also decreased, from 4.7% to 4.6%.
This is hardly sunny news. Where gin’s future appears bright, however, is with premium expressions. The market for super-premium gin (priced around $18-$28) has grown in the single digits in the past few years, while ultra-premium gin ($28-and-up) has experienced double-digit gains.
“Millennial drinkers are predominantly driving this trend,” explains Melanie Batchelor, VP of marketing for Campari America, which bought Bulldog Gin (SRP: $26) this year for $55 million. “This set of consumers seeks quality, authenticity and are attracted to spirits with flavor. The natural botanicals of gin fall perfectly into that space.”
This has led to a shift in consumer preference from lower- priced products to imported, premium and craft brands.
“We have found that most people don’t follow a traditional trade-up mentality as they would in whisky and bourbon,” says Tom Swift, Bombay Sapphire VP, Brand Managing Director. “Instead this next generation of gin consumers is entering the category in the premium segment and then navigating among brands with different taste profiles and in different cocktails.”
Bombay Sapphire has reaped rewards from this trend. The third-best-selling gin in 2016, retailing for around $25, the brand grew 4.7% over 2015 to 921,000 cases.
Uncle Val’s Gin ($30-$35) has embraced premium and the higher price tier as a “healthy space,” explains August Sebastiani, president of 3 Badge Beverage Corporation. “We had the opportunity to rework some things and pull the pricing lower, but we like being above the fray.”
2) Flavors Beyond Juniper
Gin has a flavor stigma. Some consumers believe that “most gins are very juniper-forward,” says Ari Anderman, Tanqueray Brand Manager. (The second-top selling gin in 2016, Tanqueray grew 2.1% to 1.29 million cases.) And while plenty of people enjoy juniper, there are those who avoid the category because they think it’s dominated by one pronounced flavor.
Which, of course, is no longer the case. Thanks to the craft movement, there’s been a rise in gins produced with local, alternative botanicals. Citrus flavors have become trendy, like in Tanqueray No. Ten, or the craft brand Calamity Gin that was released this year.
Part of the new wave of Texas distilling, Calamity Gin contains wildflowers from the The Lone Star State, such as Texas Bluebonnets. “Heavy juniper scares people,” explains Mike Howard, president of Southwest Spirits & Wine, makers of the gin. “You have to mask it.”
Calamity Gin features sweet floral tones with citrus notes and a bit of bitterness. And yes, there’s juniper as the backbone. This is still gin, after all. “We wouldn’t want anyone to think that we think we’re above the roots of traditional gin,” Howard says. “We think of out style as a twist on London Dry. We call it a Texas Dry.”
Uncle Val’s is also reimagining gin flavors. Sebastiani foresees a future spirit with black-pepper notes. “We want to get mixologists’ juices flowing,” he says. “Perhaps they can make gin Bloody Mary, or a Red Snapper. We’re trying to make something far-fetched,” he adds. “Something that makes the consumer raise an eyebrow.”
3) Mixology Benefits Gin
The mixology movement has been a boon for gin. Numerous classic and craft cocktails employ the spirit. “With more gin cocktails to select from, consumers are starting to find that gin is more approachable,” says Anderman of Tanqueray.
Popular drinks like the Negroni and gin and tonic remain at the forefront of modern mixology. Bartenders armed with an increasing number of artisanal tonics and garnishes can put personal twists on these classics.
Like sparkling wine, gin drinks have benefitted from consumers now seeing them as more than just a seasonal treat.
“Previously, gin was used as an addition to a light, summer cocktail,” says Batchelor of Bulldog. “Now, consumers and bartenders are starting to expand by including gin in more complicated and creative cocktails.”
Savvy brands have helped support the mixology movement.
“Cocktail culture, once only vibrant in cities like New York and San Francisco, is now thriving across the globe and Bombay Sapphire has been able to capitalize on this massive trend,” Swift says. The brand hosts the annual Most Imaginative Bartender contest, which in 2016 celebrated 10 years. All ten finalists last year were featured in GQ’s Men of the Year issue.
4) Craft Gin Benefits Everyone
Gin has also profited from the rise of craft spirits. Many startup microdistilleries will produce gin first. While no cinch to make, gins can at least be sold right away, whereas whiskey must spend years in barrels before generating profit. It’s often a matter of economics: what will allow the business to survive those initial years?
At the same time, gin gives producers chance to reflect regional ingredients and flavors through botanicals and fruit. At the heart of craft is what’s local. This has led to the recent spike in uniquely flavored gins poured in tasting rooms in microdistilleries across the country.
In turn, the gin category has never enjoyed greater diversity. “The wide variety of craft gins allows people to gravitate towards certain styles that they prefer, like with American whiskey and Scotch,” says Howards of Calamity Gin.
Many big brands have embraced this diversity as beneficial to the category as a whole.
“The roles of craft gin and micro-gin distilleries are a necessity as they continue to champion the varied flavors and experiences that an individual can have with gin,” says Batchelor of Bulldog. “You cannot say you have tried gin if you have only tried one brand, and that is the beauty of this category.”
5) Consumers Learn About Gin
A hallmark of the craft movement has been the increased curiosity of consumers. They’re “interested in the unexpected and willing to take risks,” explains Anderman of Tanqueray. Armed with the internet, and frequently on their phones, people today love to look up and learn about whatever catches their curiosity — or intrigues their palate.
And it’s more than self-education. Knowledge of fine alcohol has become social currency at parties and gatherings. And it’s social glue for groups of friends, especially Millennials, who go out and explore categories together.
Connoisseurship is up, which benefits all spirits. “Those interested in craft spirits are expanding their knowledge of various categories, including gin, and are taking initiative to further educate themselves and expand upon their knowledge,” Anderman says.
The internet is one path for consumers towards this knowledge. Another common path is through the bar.
“We’ve found one of the best ways to run a consumer education program is with bartenders leading consumers through an interactive, hands-on approach to create their own cocktails,” says Swift of Bombay Sapphire. “Our consumers are truly epicurean and looking for ways to replicate the craft cocktails they try on-premise, at home.”
6) Gin steals From Vodka
Gin has opportunity to lure consumers away from its fellow white spirit, vodka.
On one hand, the vast size difference between categories makes poaching drinkers easier. Vodka represents about 33% of the distilled spirit market, while gin is only 4.6%. There’s ample room for growth at the expense of vodka.
Some gin producers also believe there’s an advantage in the difference in flavors — especially in the age of craft. Like a lager beer versus an ale, vodka is smoother to gin’s more-pronounced flavors. That could help gin “recruit vodka drinkers by offering a more interesting and dynamic category,” Anderman says.
Gin may also be better tailored towards the mixology movement by filling “a niche in the craft spirits boom that vodka fails to do,” says Sebastiani of Uncle Val’s. “There’s a certain depth of character and flavor to gin that the odorless, colorless gin doesn’t have for mixologists who want to capitalize on that consumer interest.”
Howard of Calamity Gin sees his Texas Dry as “bridging the gap between vodka and gin. It’s got the juniper and citrus, but it’s still cool and easy drinking like a vodka,” he says. “We want to be a safe landing place for vodka drinkers.”