Towards the end of March 2020, as we stood on the precipice of our first national lockdown, gin had slowed to only 10% volume growth in the UK on trade vs the previous year, having been in 54% growth the previous year. Gin’s seemingly irresistible march to category supremacy had slowed.
But scratch beneath the surface and the picture was much more nuanced, with dry gin’s ‐4% volume decline compensated for by stellar +37% growth from flavoured gin (1). Well before Covid, gin’s bubble was not bursting, but inflating at a slower pace and on a new course defined by flavours. Fast forward to the present, altogether very different landscape and nearly half of business leaders expect to rationalise their drinks range in 2021, with half of them targeting spirits for range reduction (2). In the context of the recovery ahead it is more important than ever that every bottle stocked earns its place through sales, and that perennial non‐rotators or ornamental dust‐catchers are minimised. The average UK outlet stocks 11 gins (3) meaning the average venue has £1,053 of potential sales value sat on their backbar alone (4). In many outlets, Gin therefore may have much to offer on the altar of efficiency.
Given the pre‐Covid slow down & shift in gin’s growth trajectory and an emphasis on range efficiency in a re‐opened on trade, gin may well be approaching an important junction, a shakeout if you will, where ranging decisions on gin will be made more critically than in recent years. Ultimately, it’s what customers want that truly matters, and which brands have the lasting quality and appeal to continue to convince your guests to part with their hard‐earned cash in the future. At Pernod Ricard, we believe that there are four families of gins that will stand the test of time and remain desirable to consumers no matter what happens next on gin’s rollercoaster journey and through our industry’s recovery.
New Exciting Premium Flavours
Flavours will continue to fuel gin’s journey, meaning new and premium flavoured gins will be key to the future of the category. Alongside this, increasing consumer demand for excitement and experiential in drinks will benefit flavoured gins like Malfy, which captures the spirit of the Amalfi Coast and encourages consumers to live la dolce vita.
Historic and trusted brands like Tanqueray, Beefeater & Gordon’s make up about 70% of on trade gin volume5 and are the building blocks of the wonderfully diverse gin category that we have today. These mass awareness brands continue to add interest through accessible flavour variants like Orange, Strawberry or Beefeater’s new Peach & Raspberry.
Premium Gins with Substance
Think of these like the ‘Single Malts of Gin’ – they are purists like Sipsmith, Hendricks or Plymouth who have mainly stuck to dry gin. Often at a price premium, these brands may not have experienced the same sort of growth as other brands, but they are icons of the category that will be relevant to consumers for many years to come.
Super Premium with a unique selling point
These might be described as ‘true craft’ (almost finished a gin blog without mentioning craft), where unique ingredients & beautiful packaging meet with a strong story or reason to believe in the product that resonates with consumers. There are numerous brands that could fit in here, but brands like Monkey 47 with its 47 botanical recipe or Silent Pool with its focus on local provenance are great examples.
Evaluating a gin range against these four broad opportunity areas will ensure a range is optimised for the future; balancing range efficiency with catering to consumers’ needs and the latest trends in gin. Gin is far too deep rooted in our culture now for the bubble to burst, but it will slow and continue on a new course led by flavours. Make sure your gin range is fit for this future by ticking these boxes, focussing on what’s important to guests without compromising on operational efficiency.
Key Stats & Takeouts
- Flavoured gin is driving the gin category, having been in 37% volume growth pre‐Covid in the on trade and 28% growth in the off trade in the past year with on trade closures pushing demand into the off trade. (On Trade, CGA OPMS MAT to 21.03.20, Off Trade Nielsen ScanTrack MAT to 01.05.21)
- Flavoured Gin accounts for 43% of total gin volume, having been 34% of all gin volume a year before. (CGA OPMS MAT to 21.03.20)
- The average UK licensed premise stocked 10.8 gin brands, 4.4 of which were flavoured, 6.4 unflavoured. (CGA OPMS data to 22/02/20).
- Nearly half of business leader are expecting range rationalisation for drinks and of those expecting rationalisation, 46% expect to do so on spirits. (CGA Business Leaders Survey, 2021)
- Assess your gin range against whether you have a blend of: New exciting premium flavours, Household names, Premium gins with substance and Super premium with a unique selling point. Focus on these families to ensure your range meets consumer needs and is operationally efficient.
1 CGA OPMS data MAT to 21.03.20
2 CGA Business Leader’s Survey 2021
3 CGA OMPS data to 22.02.20
4 Average price per 25ml £3.42, assuming 11 full 70cl bottles.
5 CGA OPMS Data to 21.03.20