Gin, static for many years, is on the move.
Vinexpo forecasts volume growth worldwide of 2.2% for standard Gin brands* over the next five years. But for premium Gins, volume growth of more than 11% is foreseen. Vinexpo Newsroom asked Neil Mowat, responsible for marketing Edinburgh Gin at Ian Macleod Distillers, for his take on the ginaissance
* 9-litre cases. Source: Vinexpo/!WSR annual report and forecasts for world wine and spirits 2018
Q: What are the major challenges for Gin in the UK and internationally?
A: All the excitement sits in the premium/super-premium segments. Every one of the 500+ brands launched in the last ten years are playing in this little space. Yet 75% of the category value sits in mainstream value or standard offers. There is going to be a big shakedown in the relatively near future.
Q: What explains the ‘ginaissance’?
A: For decades Gin was in terminal decline. Suddenly it turns around. Just as the decline was consumer driven, so is the resurgence. We can all thank Wm Grant and the Hendricks brand for knocking down the door. Gin is the perfect spirit for the millennial. At a time when young consumers are searching for authentic choices with a heritage that is relevant in a modern way; when young people are moving from ostentation to simplicity; when connoisseurship is increasingly valued – and at the heart of that is an appreciation of the local and artisanal – a time like that is made for craft distilled Gin.
Q: What are your largest markets?
A: Our key market is far and away the UK. Research shows Edinburgh Gin as the sixth biggest Gin-based brand in the grocery channel by volume and value. We have a limited but growing international footprint where flavoured Gin liqueurs – the mainstay of our business domestically – are a more nascent opportunity.
Q: Which are the fastest growing markets?
A:The UK remains our fastest growing market. The USA and Germany are our most interesting growth opportunities right now.
Q: In view of the crowded market place, have launch costs for Gin increased substantially in the last two years?
A: I don’t think it has cost consequences; it definitely has a margin consequence because to win you’ve got to get established in channels that are much more competitive on price than a couple of years ago. Consumers are learning to buy brands on promotion that were selling at a higher price recently.
Q: How long does it take to achieve lift off for a new Gin brand?
A: It has taken us a long time! You can’t substitute hard work, getting out there and letting people taste your product. You need to achieve a critical mass of core fans; and that doesn’t happen over night.
Q: How many brands can the UK or European markets support?
A: A lot less than we have currently! There definitely is some sort of consolidation coming and that’s not necessarily a bad thing.
Q: How important is shelf stand-out and design?
A: A modern Gin consumer is buying from a relatively wide repertoire. Very often they haven’t decided which of these repertoire brands they will choose until they are in front of the shelf or at the bar. Then they decide very quickly. So, physical stand-out, appeal and a clear nod to your core proposition is extremely important. That’s what great design needs to offer; and in our category it helps if it is really beautiful – and stylish too!
Q: In view of the wide array of Gin brands and recipes, how important is education in the promotional mix?
A: Research we have undertaken suggests that if there is one thing that is perhaps negative about the growth we are experiencing it is that consumers might be starting to feel a little bewildered by it all. So, yes, education is one thing, keeping it simple is another.
Company profile: Ian Macleod Distillers is the world’s tenth largest Scotch Whisky company as well as the distiller of the Edinburgh Gin range and own-label spirits for some of Europe’s largest supermarket groups. Edinburgh Gin produces a range of classic London Dry Gins and flavoured Liqueur Gins.