Pink gin kicking up a storm

10th September, 2019 by Amy Hopkins

The astonishing rise of pink and flavoured brands is introducing the gin category to enthusiastic new audiences. But could the trend that is boosting the spirit also be its downfall?

Pink-Gin

Pink gin has become a burgeoning sub-sector of the gin category

Whether rose, fuchsia, bubble gum, coral or cerise – Instagram is flooded with eye-catching pink drinks, reflecting the coveted colour of its millennial user base. Pink is the captain of an army of flavours that is leading the charge of gin’s growth in some of the spirit’s most important markets. According to IWSR Drinks Market Analysis, last year flavoured gin volume sales increased by an astounding 78.3% globally, significantly outperforming the wider gin sector, which was up by 8.3%. While the flavoured contingent represents just 5.1% of the total gin category, in the UK, the market share of flavoured variants was almost 20% in 2018.

According to Sophia Shaw-Brown, senior insights manager at IWSR, the rise of flavoured gins has been a “natural response” from producers looking to stand out in a compressed market. “With gin’s versatile taste profile lending itself well to flavour experimentation, and today’s consumers increasingly open to category exploration, flavoured gins are booming in mature markets such as Spain and the UK, where consumers are eager to try something new.

“Pink gin in particular is proving to be a big draw for consumers, mirroring the growing demand for all things pink in the drinks industry – rosé, pink sparkling wine, pink cider. Part of the attraction of pink gin is its typically sweeter, fruiter taste profile, which is helping bring in new consumers to the category. Meanwhile, its striking colour is also playing into the growing demand for experience-led consumption.”

The trend has been driven by both small and large players, and one category giant in particular: Diageo-owned Gordon’s. In the summer of 2017, the brand introduced Gordon’s Premium Pink, flavoured with raspberry, strawberry and redcurrant. Following a quick and widespread rollout, the line extension hit sales of 1.21 million cases in 2018, helping the Gordon’s brand to report a 26.7% volume increase for the calendar year.

Speaking to The Spirits Business earlier this year, Kathy Parker, Diageo’s senior vice-president of premium core gins, said: “What is fantastic is that [Gordon’s Pink] recruits new drinkers to the brand and category. People who didn’t historically drink gin can find something in Gordon’s Pink, whether it’s the colour, the serve or the strawberry garnish, which makes people feel a bit more special.”

Gordon's-Pink

Gordon’s Pink Gin broke the one-million-case sales mark in 2018

Another pioneer in the flavoured movement is UK ‘farm-born’ brand Warner’s. In its home market, the brand’s Rhubarb expression has been a runaway success, challenging the market share of long-established players. “We innovated unknowingly because when we started doing this, flavoured gin wasn’t really a thing,” says Tom Warner, co-founder of Warner’s, which launched in 2012 and recently changed its name from Warner Edwards. “With Rhubarb, I remember thinking, ‘wow, we’ve sold nearly as much of our Rhubarb gin as our Dry gin this month’. Then we sold a bit more, then twice as much, then it just took off like a train.”

Now, Warner’s flavoured gins account for 75%-80% of its business. At one point, flavours were “probably 95% of what we did,” Tom Warner adds.

Colourful additions

New and established players alike are jumping on the flavour train, which is accelerating at pace. Gibson’s is one such brand that recently launched its own colourful iteration flavoured with strawberry and rose petal, while wine group Accolade released a pink gin under its Echo Falls line, and Malfy unveiled Rosa Gin, infused with pink grapefruit and rhubarb. Such flavours are making gin more approachable for sweet-toothed drinkers who previously found the spirit’s heavy juniper influence too bitter. But a number of commentators are uneasy about the sub-category’s rapid growth.

According to Dawn Davies MW, head buyer for UK distribution group Speciality Drinks, some of the most popular pink and flavoured gins on the market do not officially qualify as ‘gin’. “People are drinking gins that are not really gins – they are just flavoured product,” she says, referring to the legal requirement for gin to be ‘predominantly’ flavoured by juniper. “And they don’t know any better – they probably don’t even like juniper.” Davies believes that consumers are being is led by producers that are benefiting from their lack of knowledge.

She adds: “If a consumer wants to drink something with a fruity flavour, I’m not going to stop them – why should I? It sells, and it’s not for me to tell the consumer what to drink. As an industry though, we do have a responsibility to be clear to consumers and transparent, and say, ‘this is not a gin’. We’re being disingenuous. We’re confusing the consumer.”

Juniper-Berries-Finland

Strictly speaking, gin should be juniper-forward

Davies’ views are shared by London distiller Hayman’s, which last year launched the Call Time on Fake Gin campaign. The initiative urged tighter regulations to be brought in to the category and culminated in a debate on how to protect gin. Hayman’s doesn’t exclusively single out flavours as ‘fake gins’ (other offenders could be gins with botanicals that overpower the flavour of juniper), but argues the rate of innovation may cause the industry to lose its identity.

“There are two different views: those who think we must ensure that gin maintains its identity, and those who think it doesn’t matter as it’s about raising the profile of gin and allowing a greater audience to enjoy it,” says James Hayman, fifth generation of the family of distillers.

“We respect all views but we still sit in the camp that says we must protect gin’s identity. There are different types of innovation – some do it very well and work within the regulations, while others take a short-cut approach.”

Hayman adds that producers shouldn’t aim to appeal to all tastes at the risk of the category’s integrity. “While I do understand some wanting to make gin accessible to everyone, I am more relaxed,” he says. “People like different things. If someone doesn’t like gin, I don’t think it means we should find a way to make them like it.”

But would most consumers actually care if they were informed that their favourite fruity gin wasn’t technically what it claimed to be on the label? Probably not, says Davies, since few are aware of the rules that govern gin in the first place. The bigger concern, she argues, is that if flavours fall out of fashion, they could take the wider gin category down with them.

There is a precedent for such an occurrence, with many critics taking vodka as an example to prophesise an uncertain future for gin. During May’s Distillers’ City Debate, which questioned whether the gin boom had reached its peak, Jefferies analyst Ed Mundy argued that history shows flavour innovation to be an unreliable tool for growth. Using the “boom and bust” story of flavoured vodka in the US, he said: “When 15%-20% of a category is flavoured, you need to start to ask questions – alarm bells should start to go off.” While IWSR data shows that, globally, flavoured gin is a long way off that, in the UK, its market share is already nearly 20% of the wider category.

Innovation in moderation

While flavour innovation continues to flood the sector, some early movers are seeking to moderate their portfolios. Tom Warner says his team is working to “retrospectively address our balance of flavoured versus Dry gin”. He admits: “We should have been a bit more savvy and bolted our Dry gin onto them [Warner’s flavoured gins]. It was our own naivety that probably sacrificed a bit

of Dry gin sales. We shouldn’t be over-reliant on flavour.”

Warner welcomes the recent move by the Wine and Spirit Trade Association (WSTA) to lead discussions with its members about gin definitions. The trade body is hosting a series of summits on “how best to map out clear rules and guidelines for British distillers moving forward”, according to Miles Beale, its CEO. “The discussion has arisen as distillers have started to innovate and flavour their gin to meet consumer demands. We aim to ensure British gin keeps its reputation as a premium product, envied across the world, but at the same time allow our innovative spirit makers to grow and create new products.”

Jared-Brown-Sipsmith

Jared Brown, Sipsmith master distiller and drinks historian

While the WSTA is aiming to mitigate some of the criticisms of gin, Davies believes a new flavoured sub-category would contradict the sector as a whole. “It’s a bit of a cop-out,” she says. “If you’re using the word ‘gin’ then immediately you’re saying it needs to be predominantly juniper. This is just a way of whitewashing something to make it more acceptable. If you’re going to do something, do it properly.” A complete recategorisation of gin would certainly be a daunting task, but Davies points to her work in creating a classification system for rum as an example gin could follow.

Gin shelf expands

For Jared Brown, Sipsmith master distiller and drinks historian, if the gin category were as tightly regulated as whisky, there would certainly be fewer dubious products on the market, but “you also wouldn’t see the same level of creativity” in production. “I love seeing the growth and variety in gin, and the remarkable differences between the products,” he enthuses.

“I’m still overjoyed to see the expansion of the gin shelf in shops and behind bars. And actually, I have seen more meticulousness from distillers rather than them just throwing something against the wall to see if it sticks. A previous generation got that out of the way with vodka.”

He adds that “there are loads of new areas to be explored” in gin, and that the industry has “only reached the tip of the iceberg” when it comes to innovation. Brown claims the history of gin is rooted in diversity and experimentation, and “there were a lot more recognised gin styles back in the day”.

But Brown is steadfast in his belief that juniper must retain its starring role in gin as the sector diversifies. He used 50% more juniper than is in the core Sipsmith expression to create the brand’s new Orange and Cacao flavour. “If I am going to put the word ‘gin’ on a bottle, I am going to make sure that it is unmistakably gin,” he says.

“I have a lot of self-strictures on how I produce a product – it has to have its basis in the history of gin.”

With such rampant experimentation, as well as big investment from key players (see box on page 38), there is clearly a widespread confidence in the future of gin. However, Davies believes the dynamics of the industry will alter and the “conversations around gin will be led by the big boys”.

Warner's-Gin

Warner’s underwent a rebrand earlier this year and unveiled a new bottle shape

She says while the leading producers “rested on their laurels” for a number of years, the popularity of local distillers has prompted brands such as Gordon’s and Plymouth to become “reinvigorated”.

On the flip side, independent distillers will struggle in a compressed market devoid of consumer loyalty.

“I think we will see a lot of closures this year and brands drop off the radar because I just don’t see how they are going to make money,” she says. “There’s so much uncertainty and people aren’t spending as much – these types of situations tend to cull the dead wood, for want of a better phrase. The question of flavour is there, but gin will continue to be trendy. But I think we’ll see gin dominated by the big boys now, and they will take the conversation into their own sphere.”

The market is likely to experience a shake-out, which will see some brands thrive and others perish, but gin’s growth is forecast to continue. IWSR predicts total gin volume sales (including genever) will grow by 4.2% CAGR from 2018-2023, while flavoured gin will grow by 8.3% in the same period, and increase its market share of total gin by 1%, to 6.1%.

Shaw-Brown from IWSR highlights the sub-category’s strength in mature markets such as the UK and Spain, but says that under-developed gin markets – of which there are many – will focus on the traditional

gin segment. “While flavoured gin will no doubt contribute significantly to maintaining the category’s strong growth trajectory in the near future, traditional brands will nonetheless continue to be the main driving force behind the global gin boom,” Shaw-Brown explains.

Industry commentators are rightly concerned with the minutiae of gin’s future development, and the technicality of how the spirit should be produced and marketed. However, the figures show that while there may be an acute sense of wariness and fatigue in the industry, this has done little to dampen the enthusiasm of gin’s most important stakeholder: the consumer.

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