Have we reached peak gin?
The explosion in the number of gin brands has taken the industry by storm. Now consumers, lured in by the taste of London Dry, are expanding their horizons and exploring other styles.
*This feature was first published in the July 2017 edition of The Spirits Business
Have we reached peak gin? Surely it’s a question on the lips of every bartender in developed spirits markets across the globe. Juniper-weary journalists, weighed down by new product press releases, wonder if the end is in sight. Retail buyers sit begrudgingly hemmed in by gin samples from new brands clamouring to be the next big thing.
There are so many questions about gin right now. What is the next big thing? In a market so undeniably saturated, what does newness look like? As brands push the ingredients envelope in a quest to establish a point of difference, what is a gin anyway? And how long will consumers care about the category before the next craze woos them away?
Thankfully for those invested in the category – and let’s face it, despite the juniper fatigue we all benefit from gin’s buoyancy – the general feeling is that consumers on the gin trail still have a long way to go. London Dry and other classic styles might be the entry point, but the sector’s alluring mix of authenticity and heritage means lesser-known, historical styles are keeping the discovery vibe alive.
Even imbibers who have enjoyed standard G&Ts for years can explore the likes of Old Tom, cask-aged and navy strength, continuing a journey that will likely keep the wider sector in growth for some time yet. And with sales of gin in the UK forecast to overtake blended Scotch by 2020, according to Euromonitor, the wider spirits sector will be shaped by the performance of these often-overlooked subcategories.
“London Dry and contemporary iterations of that style [versions that are not technically London Dry], will always dominate the market, but the category is flexible and brands are exploring the potential to the fullest extent,” muses Nicholas Cook, director general of The Gin Guild.
It’s a sentiment echoed by Alexandre Gabriel, master distiller and proprietor at Maison Ferrand, which produces Citadelle Gin. “Gin is booming because of its diversity. So the other sectors are actually the beauty and the essence of gin as it is now.”
Jon Hillgren, founder and master distiller at Sweden’s Hernö Gin, says: “It’s like a pyramid, where the main consumer is at the bottom drinking London Dry gin – then they try Old Tom, navy, cask and then sipping gins. The number of people climbing the pyramid is increasing. More people want to keep exploring.”
And while few figures exist to back up the accelerated growth of these subcategories, the anecdotal evidence for their development is strong. Alex Hanson, head mixologist at Spirit of Harrogate, confirms: “From our masterclasses alone we have seen an uptake in people interested in Old Tom, navy and barrel-aged gins.” He says that out of the 150-or-so gins available at the brand’s visitor experience, tastes have shifted to these variants.
Quaffed by the masses in the 18th and 19th centuries, Old Tom gins were traditionally sweetened to make the poor-quality distillates more
palatable. Today the slightly softer style is increasingly sought after, and Old Tom expressions win medals the world over for their quality.
With its compelling back story – historically, imbibers in murky back streets would slot a coin into a cat’s paw to get a secret gin stash back through its mouth to avoid the eagle eyes of excise men – it’s no surprise that the sector is stirring up consumer interest.
“Our Old Tom gin is booming,” confirms Citadelle’s Gabriel. “Old Tom is part of gin heritage but it was forgotten for years.
“It is a small niche in the gin category and it is still mysterious for many consumers.”
The Glasgow Distillery Company has recently added both Old Tom and cask-aged variants to its Makar Gin portfolio, and sales of both are “exceeding our initial expectations,” says Mike Hayward, cofounder.
“Given the desire to explore and the ever increasing number of gins on the market, consumers are keen to try out new expressions and subcategories as they develop their interest in the overall category. This gives a great opportunity for Old Tom gins to secure their own space in the gin market.”
Adam Wyartt, global brand manager for Atom Brands, which owns and markets Bathtub Gin, among others, agrees. He says Bathtub’s Old Tom variant is “keeping pace” with growth, with the sector accounting for around 16% of Bathtub Gin’s sales.
And the flourishing cocktail culture is having a striking impact. Old Tom’s revival has coincided happily with the resurgence of classic serves in general, and bartenders and consumers alike are taking a second look at older styles with Old Tom in mind. Mark Dawkins, founder of Langley’s gin, reckons: “We actually feel that our Old Tom will have wider appeal than the traditional gin market. Its slightly sweeter style makes it a versatile component in cocktails.”
While James Hayman, sales and marketing director at Hayman’s Gin, doesn’t go quite that far, he does agree that mixing has spurred on the sector. “Today we have seen the interest in this once-niche liquid now starting to trickle down from the bartenders we first created the gin for to the gin enthusiast community. Recently, Old Tom has entered the mainstream market, as consumers expand their drinking repertoire and look to create authentic, high quality cocktails at home.”
But for him, a lack of consistency in the sector presents a challenge. Producers use a range of distillation processes and therefore a plethora of styles exist under the ‘Old Tom’ name. “It would be of no surprise if this created a degree of consumer confusion around exactly what constitutes an Old Tom,” Hayman says.
“As things stand,” he adds, “it would be difficult to define a subsection for Old Tom in the same way as you might have a subsection for IPAs within the world of beer. There is too much inconsistency, too little reference to the traditional distillation technique and therefore, too much potential for consumer confusion.”
Contrasting the sweeter lightness of Old Toms, cask-aged gin variants offer a full spectrum of flavour – and present a fresh entry point to gin from other categories, such as whisky. Ferrand’s Gabriel claims to have “reinvented” the cask-aged category when it launched Citadelle Reserve in 2008. “It is important to educate,” he stresses. “Before 2008, when we launched Citadelle Reserve, it had become a nonexistent category so it does need to be rediscovered.” And for some producers, it’s here where gin has the most space to add incremental growth. “Barrel-aged gin might have the potential to increase more than other categories, simply because many whisky fans have joined the gin movement, and barrel ageing gives a totally new tasting perspective to gin,” thinks Gerald Koenen, co-founder of Germany’s Siegfried Rheinland Dry Gin.
Atom Brands’s Wyartt shares the enthusiasm: “London Dry will always dominate because of the power of existing brands, but cask-aged – I can’t see there being any barriers to producers continuing to explore what’s possible,” he says. For Glasgow Distillery Company’s Hayward, cask-aged expressions will shake up the status quo for experienced tasters and bartenders alike. “At the most basic level, cask-aged gins generally do not work so well with the traditional tonic water, so we tend to recommend a good ginger ale, or even neat over ice,” he says. “Depending on the flavour profile of the gin itself, it can lend itself to some of the gin classics like the Negroni, but the smokiness of an oak-aged gin can pair well with cocktails that are associated with Bourbon and whisky, such as an Old Fashioned.”
While most stakeholders questioned sang cask-aged gin’s praises, Hernö’s Hillgren advised a note of caution – and it loops back to that stubborn question of when is a gin not a gin. There is a risk consumers could be put off if they don’t know what to expect when they first try a cask-aged expression, he says. “A barrel-aged gin should still be a gin – a gin with a barrel touch. Not the opposite.”
The next stage on a gin fan’s journey might be to sample higher abv expressions, from export all the way up to navy strength – weighing in at a hefty 57% abv, and occasionally beyond.
Despite ‘firewater’ preconceptions, the higher-strength gin contingent hasn’t scared consumers off, and enthusiasts are positively embracing the robust charm of these lively libations.
“The navy strength gin has been a consistent seller for us, and we have people who come in specifically to buy it regularly,” says Spirit of Harrogate’s Hanson.
“In terms of the sales of navy compared with the London Dry and the rest of the portfolio, we have seen an uptake in sales for navy-strength gin, with some people choosing to drink it instead of the London Dry now.”
Vince Wilkins, managing director at Spirit of The Lakes, which produces Bedrock Gin, also backs the segment. “There is the beginning of an early move from 40% to the slightly stronger – say up to 46% – export-strength gins,” he says. “While I do not believe this segment of the market will ever reach either the range or volume of the more established premium segment, I think it will grow at an exponentially faster rate.”
But the affection for all things high abv isn’t universal. “We haven’t seen any increase in sales for navy strength gins in our portfolio,” says Tim Dunlop, sales manager at Hammonds of Knutsford, a UK wholesaler. “Sales are steady, and they tend to be bought by bartenders making cocktails, while for drinkers, there is little understanding of the link between alcohol strength and additional duty charges – they are just perceived as more expensive.” Again, education is critical.
Less a category and more of an occasion, sipping gin is a micro-trend bubbling away, one that is yet to gain a huge amount of traction but one that represents a strong opportunity, nonetheless. James Hayman even identifies gin food pairings as an exciting prospect for producers to explore. “Whether sipping the gin neat, pairing with food or mixing in a classic cocktail, consumers are looking to taste the gin first and foremost. This is an important development and one we are delighted to see.”
But unlike Old Tom, cask-aged and navy strength offerings, Spirit of the Lakes’s Wilkins doesn’t expect much intentional new product development along these lines. “While there has been a slight increase in the interest in sipping gins, I do not see this as a market that will have a huge impact on how the majority of gin is consumed,” he says.
“There are clearly more gins on the market that are suitable for this occasion but I do not think there will be a rush to produce specific gins for this market, rather established brands will try to demonstrate that they are already suitable for sipping.” Brands are clearly “pushing the envelope” when it comes to gin, as The Gin Guild’s Cook puts it, but will the development of these subcategories have as seismic an impact as it might seem?
“Our private-label customers give us a unique insight into the market and are always good indicators of the state of a category,” says Andy Mallows, managing director at Dutch Spirits – formerly Toorank. “The vast majority of customers we develop liquid for are asking for London Dry.
The lack of consumer education on gin means that established brands or standout packaging are still the main purchase triggers rather than specific styles of gin.
“We believe that as consumers become more educated, they will start to ask for various style of gins but for the time being, London Dry remains dominant.”
Resisting the temptation to over-educate is also critical, though, argues Wyartt. If you do, you might stifle the fun. “It is important to avoid baffling and boring customers from a technical perspective,” he says, adding that gin’s strength to-date is that it has managed to cultivate a large following without also fostering a geekish exclusivity. It still feels like a democratic category.
What is going to happen to these subcategories? Not a lot in the long term, argues Cook. “82% of the market is still the big brands; 18% is everybody else. When you go into a bar and buy a drink or have a drink bought for you, you’ll end up with Beefeater, Bombay Sapphire, Gordon’s or Tanqueray, if you’re lucky, or Hendrick’s – which is still regarded as a quirky gin. The 18% have got to work hard to grab a decent share of the market. But because it’s there, people are buying more of the 18%.”
They might not be playing the volume game, but ordinary gin drinkers are responding to the 18% – and the likes of its Old Toms, cask-aged and navy strength variants. And, ultimately, as Wyartt says, “it’s only the consumers that decide”.