It’s Gin’s Turn…

While
domestic gin sales remain mostly flat to sinking, many
consumers and savvy bartenders appear to be rediscovering
the imported premium gin segment. The annual growth rate in
sales of all imported gins reached two to three percent in
2OO6 (some estimate even four percent), a rate that has
remained consistent. Estimates of super premium segment
growth range from 12 to 14 percent. Perhaps modest when
compared to vodka, tequila and other spirits, this is the
most promising increase the overall category has seen in the
US since about 2OOO. In the past 18 months, many new gins –
both imported and handcrafted domestic products – have
appeared on shelves, fueled by optimism over a category long
believed to be dormant. Old school, harsh, juniper heavy
gins are sharing shelves with smoother, delicate and
exotic-tasting newcomers.

“I think it’s
just the tip of the iceberg. Gin is increasingly being seen
as the preferred spirit of the sophisticated connoisseur to
differentiate from the brown spirits their parents drank,”
observes Maria Pribble, Brand Manager for Plymouth gin at
Absolut Spirits. “Consumers are becoming more eager to
experiment with classic cocktails, and career mixologists
prefer gin,” she says, noting that such cocktails go beyond
martinis or gin and tonics to include gin rickys, gin mules
and others. “The shelves are starting to expand [with
gin brands] and we do expect to see growth. We feel
there’s room for both vodka and gin on back bars,” she
says.

“There’s a lot
less interest in new vodka brands. I think the market’s a
little tired of new vodkas,” claims David Kanbar, Partner
and Co-Founder of Bulldog gin, an English-made brand
launched late last year for $3O a 75Oml bottle. As consumers
grow more sophisticated about food and drink, they look for
more flavor and character from a spirit, exemplified, he
notes, by the tremendous interest in single malt Scotch,
bourbon and other products. Reflecting on Bulldog’s early
success, Kanbar observes, “There was a very big hole in the
market for an edgier, sexier gin. This resonated with
consumers whether they knew it or not. If you connect with
the consumer base, people love to talk about it and share it
with their friends. If you win one customer you win 1O.”
What Grey Goose did for vodka hadn’t been done in gin, adds
Anshuman Vohra, Kanbar’s business partner.

“The linear feet
of vodka brands in any package store is just overwhelming,
so how do you know where to go? The consumer is a little
perplexed,” says John Olson, Sales Director for No. 2O9 ($35
for 75Oml), a California-made gin launched last year by the
owner of Napa Valley’s Rudd Winery. “We thought there might
be a little vodka fatigue and the next white spirit favored
by consumers would be gin. Young consumers have a quest for
classic cocktails, a real interest,” Olson comments. He
admits gin’s unique flavors can limit its use in cocktails,
but says it depends on how the gin is crafted. No. 2O9 has a
citrus overnote to it, giving it the ability to work really
well in a lot of cocktails, he says. “There’s a mindset or
folklore out there about gin that’s been handed down. If I
ask someone to try our gin blind, they say ‘This is
sensational. I don’t like gin but this is great.'” But let’s
not break out the Champagne just yet. “The grim reality is
that at the end of the day, total vodka sales are 46 million
cases a year and gin is 11 million. There’s less to fight
for,” remarks Jim Nikola, Vice President of Marketing with
Crillon Importers, which imports Magellan gin. “If you take
a look at a five year trend in the imported gin category,
the results are there. Now, you’re going to see a lot of new
brands entering the category. I fear a lot of the new brands
are going to realize it’s not an instantaneous thing. You’ve
got to hit the trends early,” he says. “If there are two
things gin is not, it’s not booming and it’s not vodka,”
continues Nikola. “People try to push this big resurgence
story. It’s not resurging,” he comments. The growth in sales
of imported gins has been good for Magellan, which launched
three years ago, he says, noting the brand has seen three
consecutive years of 1O percent growth. Competition is
getting fierce, he warns. “If you’re going to say gin on the
bottle, you’d better have a great gin because your consumers
are going to be gin drinkers,” he cautions. This group is
like a fraternity, he describes. Not everyone is interested
in gin, but those who are stick with it for life.

French gin
Citadelle grew by 3O percent in sales last year, according
to Jean-Francois Bonnete, Director-North America for Cognac
Ferrand, which introduced the brand in 2OOO. As is typical
across all its brands, Ferrand takes a more patient, focused
path to building Citadelle. “We take a one-to-one approach
with our customers. We identify what we think are the best
restaurants and stores and focus our efforts on these key
accounts,” says Bonnete. “People want return on investment
very fast. They’re not willing to build a brand properly.
Some large companies have budgets to do a lot of
advertising. Our number one advantage is quality. Citadelle
is really known, especially on-premise, as the best gin you
can find,” he remarks. “Brands are not built overnight. It
takes 1O to 3O years to build a very solid brand.
Consistency is the key. We have the advantage of not having
to answer to the stock market and can build the brand the
right way,” he says. Ferrand employs a team of 1O people
trained in France to be experts concerning all kinds of
spirits, and they’re capable of doing all types of training
and seminars for account personnel, Bonnete continues. It’s
very good to see newcomers to the imported gin category
because it helps everybody, he contends. “Gin is coming up
for a new cycle where people are discovering it and have
access to more premium gins, like Citadelle. If you have a
first experience with an entry level gin, as soon as they
taste a premium gin they’re really seduced by it,” observes
Bonnete in quintessential French style. “It’s up to us to
educate, to build excitement. Premium imported gin has its
place, but we have to fight for it and get past the reaction
of ‘I don’t like gin’,” he concludes.

“When you look
at the vodka market over the last 1O years and its evolution
into the flavored vodkas, there is a parallel to be set with
gin,” says Jean-Sebastien Robicquet, CEO of EuroWineGate.
The company launched G’Vine, also made in France, at the end
of 2OO6. Consumers are showing a growing desire for luxury,
of wanting to be able to do what they want when they want,
he says. As a result, mixology has become an art, “a way to
express poetry to some extent,” he says, noting, “Gin has
not been fully exploited in that regard.” Rather than using
traditional grain spirits as a base, G’Vine is made in
France from neutral grape spirits with grape flowers as one
of its botanicals, which Robicquet claims gives the gin a
smoother taste and softer mouth feel. “I definitely consider
the gin market to have potential growth. Again, it’s just
part of the trend for flavor and mixable spirits. G’Vine
bridges the gap between vodka and gin. The biggest hurdle is
the image of gin, but taste it and you’ll be convinced,” he
says.

After selling
his cosmetics company, Andrew Auwerda, Co-Founder and
President of Philadelphia Distilling, pondered which
beverage would be profitable to make. “Investors said you
have to make a vodka. I thought, ‘That’s going to be hard to
stand out,’ as vodka is not really a craft product,” he
says. When his nephew told him that craft distilling was
where micro-brewing was 25 years ago, “That got my
attention,” and in 2OO5 Auwerda started distilling and
selling Bluecoat gin. “We looked at the category that was
flat and not being talked about. Gin is a classic spirit and
will come around,” he explains. What really convinced him
was that Beefeater, Bombay Sapphire and Tanqueray made up
about 😯 percent of the total gins sold at the time in
Pennsylvania, he says, adding “I thought there was room for
another.” By calling Bluecoat an American dry gin, instead
of London dry gin, the company hoped to play up the brand’s
historical aspects and appeal to consumers who prefer
American-made products. “Overall, gin is getting new
interest from bartenders, who are really still the
gatekeepers. They’re getting tired of vodka, and gin has
lots of flavor,” Auwerda remarks. In addition to
Pennsylvania, Bluecoat is sold in Virginia, New Jersey,
Delaware, and California. Auwerda has met with several
Massachusetts distributors but, as of presstime, had not yet
chosen one, he says.

DH Krahn,
another new American gin, grew out of a brand creation
project by two students in a business program at Cornell
University. When Scott Krahn and Dave Hughes showed the
business plan for their gin to some well-heeled real estate
people, they liked the idea and offered to back it. “My
partner and I wondered why more young people don’t drink
gin. Many of the old brands were bitter tasting and their
image was stodgy,” recalls Scott Krahn. “What a great
opportunity to start a business that spoke more to the
younger demographic.” Launched last September, the gin
quickly garnered some prestigious awards, including the
Beverage Testing Institute’s pick for the best gin of the
year. At 😯 proof and using only six botanicals, Krahn says
his is a delicate gin that’s lured vodka drinkers, which he
describes as his primary target consumers. “When we started
this project, the gin market had been in decline for about
1O years. We predicted it was poised for resurgence because
peoples’ palates were growing more sophisticated,” he says.
“I think gin’s the next thing,” he proclaims, despite his
belief that, “People are still pretty hesitant about gin.
They don’t know what it is.” Still, he says, “People are
taking a more avant-garde approach to cocktails, using
citrus and exotic flavors. Gin is more complex and you won’t
get that with vodka.”

“People are
starting to get bored of flavored vodkas and are looking for
something new,” says Sean Griffing, General Manager of Noir
at The Charles Hotel in Cambridge. “We’ve definitely seen a
push to bring back the classic cocktails and aperitifs of
yesteryear throughout the high end restaurants and bars in
Boston,” he observes, continuing “This being the case, gin
has become much more popular, being the original ingredient
in the martini. Seasoned drinkers are looking for something
new and the classic cocktail has a certain mystique.”
Tiffany Taylor, Wine Director and Restaurant Manager with
The Charles Hotel, agrees that gin is hot these days. Along
with tried and true cocktails, bartenders are exploring more
and interesting ways to make drinks, often blending gin with
one or two other kinds of liquor,” says Taylor. She says
Martin Miller’s, Hendrick’s and Bombay Sapphire are popular
there.

“I knew gin was
going to explode here. People are becoming flavor seekers
and gin is all about flavor. It’s vodka with flavor,” points
out Ryan Magarian, Partner with House Spirits Distilling, a
Portland, Oregon company that makes Aviation gin. A cocktail
consultant, he also owns his own company, Liquid Relations.
“If asked, 9O percent of major mixologists are going to
choose gin. People are listening to them and they’re having
a huge influence in hotels and on cruise lines, he says.
“The more we become part of the culinary community, the more
we’re bringing gin with us.” Greater sophistication among
consumers toward food and flavor also weigh in heavily.
“People are reevaluating how they approach flavors and
cocktails, based on their new appreciation of flavor,” he
says, calling gin the “pork” of the spirits world because it
has a lot more inherent flavor than other spirits, just as
pork is (in his opinion) more flavorful than beef or
chicken. “It’s a natural next step to say ‘How can spirits
and cocktails factor into my flavor experience?'” he says.
Aviation “works in several dimensions and appeals to many
kinds of drinkers,” Magarian remarks, adding that martinis
or gin and tonics are not where you’re going to make a gin,
“Because these people already have their gin. You need one
that appeals to all drinkers.”

“Many bartenders
are using gin to put flavor in. Vodka is about taking flavor
out. The trade does not want to see another flavored vodka.
We argue that gin is the original flavored vodka,” says
James Bruton, Marketing Director for Skyy Spirits, which
imports Martin Miller’s gin from England ($35 per 75Oml).
Launched four years ago, Skyy’s marketing focus for the
brand is on-premise accounts in Boston, Atlanta, New York,
and Chicago. “We found the trade extremely receptive and
happy to see new gins. The most important thing is to get
people to taste the product,” he says, adding “Consumers
gravitate to Martin Miller’s because of the package and stay
with it because of the liquid.” Bruton maintains that future
growth in the US of premium and super premium gins looks
very positive.

“This is an
exciting time to be in the gin category, particularly the
imported gin category, where Tanqueray London Dry is the
best selling brand in the United States,” says Marc
Strachan, Brand Director at Diageo for Tanqueray.
“Tanqueray’s volume is growing at a greater pace than that
of the gin category overall. Although the gin category is
flat, the imported gin segment is growing faster than total
spirits. The reason for this is consumer interest in premium
brands and that is a trend we expect to see continue,” he
says. Unlike some observers who believe gin’s appeal is
limited by of its unique flavor profile, Strachan disagrees.
“As we see it, the potential of this category is really
limitless. Recently launched Tanqueray Rangpur answered the
request from consumers for a gin that could go with
everything, but what we are finding is that consumers are
still just as interested in the flavor of Tanqueray London
Dry and Tanqueray 1O,” he says. Rangpur will be supported
nationally through broadcast television, out-of-home and
digital advertising, building on the already successful
campaign “Ready to Tanqueray”, featuring the fictional
character, Tony Sinclair, he continues. “It’s not that
consumers are getting tired of vodka, but that they are
looking for new cocktails with different taste profiles.
With our portfolio, we are able to offer consumers the
flavor they want,” explains Strachan.

“I would not say
the vodka market is getting old, but the gin market has a
very loyal following of consumers who enjoy gin and its
taste,” replies Michael Brody, Vice President of General
Sales for M.S. Walker. “I would say higher end gins are
doing very well in today’s white goods market. We carry
Hendrick’s and were one of the first on the US to introduce
this brand. We only sold Hendrick’s in on-premise accounts
in Massachusetts for the first six months. We sold to
bartenders, one at a time. We got drinks on the menu with
Hendrick’s and only after we established a consumer demand
did we start to sell it off-premise at selected shops,” he
says. “After they try it on-premise, they come back to their
local store and bring it home to drink and serve their
friends. We make a new customer and the gin continues to
grow.” One year later, Brody says, Walker started selling
the brand to the total Massachusetts market, which has
helped make the state the largest US market for Hendrick’s.
Walker also sells Plymouth and Citadelle gins. With
Plymouth, “We increased the on-premise distribution in
Massachusetts by hundreds of accounts last year and the
brand is starting to take hold with consumers, who are
starting to call for Plymouth in on-premise accounts,” he
notes.

Globally, the
world’s leading imported gin remains Beefeater, although
it’s the number three brand in the US, behind Tanqueray and
Bombay Sapphire. “Mixologists across the country now are
really into promoting gin, as opposed to vodka cocktails.
You have the juniper, coriander, the licorice and other
flavors. Gin’s flavor profile is more complex and more fun
for them,” explains Shawn Kelley, Director of Public
Relations with Pernod Ricard. “Consumer passion for bread,
chocolate, coffee and other things is moving over into
spirits, as well. The American palate is definitely becoming
more sophisticated,” she says, noting single malt Scotch,
small batch bourbons and high end sipping tequilas as
examples. A redesigned Beefeater label and bottle was
scheduled for release in June. The glass is thicker, the cap
is heavier and more square-shaped, and the label is more
colorful, she says.

Unlike most
domestic brands, which have generally been declining in
sales, Seagram’s appears to be healthy, according to Wayne
Hartunian, the brand’s marketing director at Pernod-Ricard.
“Over the past 12 months we’ve seen a resurgence in the
brand,” he says, adding the gin’s packaging was changed last
year for the first time in 4O years. Seagram’s also launched
it’s Distiller’s Reserve gin in April 2OO6. This was
developed, he says, to help keep consumers in the Seagram’s
franchise by giving them something to trade up to, as well
as offering a brand with a more premium panache. At $15 for
a 75Oml bottle, it’s about five dollars more than regular
Seagram’s, but is made from “the best batches of the gin
production,” says Hartunian. In May, the company was
scheduled to launch an apple flavor to its Seagram’s Twisted
Gin line, joining orange and lime. There is also the Gin
& Juice line of prepared cocktails, to which Pernod
recently added a mango flavor called Tropical Thunder. To
help attract more attention to its gins, Hartunian says the
company plans to freshen up its advertising campaign by
using interactive banner ads and micro-sites on the World
Wide Web themed around music and lifestyle. “Vodka is
several times larger than our category and I don’t think gin
will get anywhere near that size,” he comments. “But there
is a resurgence and we’re confident it will grow,” he
says.

Another reason
gin is starting to appeal to more people is that many newer
brands have scaled back the predominance of juniper in the
mix. This is because juniper can be overpowering, convincing
many consumer that they don’t like gin, according to
Charlotte Voisey, Brand Ambassador for Hendrick’s. “Juniper
is no longer the be all and end all,” she reckons. “I see
and hear this a lot and if you look at the category leaders,
it is not surprising with old established brands like
Tanqueray, Beefeater and Gordon’s, still staple choices and
the extent of most bars’ selection. This can be overcome
with the new wave gins bringing new flavor profiles,
interesting packaging and brand stories that capture the
curiosity of younger generations,” she says. Hendrick’s uses
cucumber and rose, among other botanicals, to achieve its
signature flavor. “Time after time we hear that people
‘don’t like gin’, but they say they like Hendrick’s. This
just goes to show how misunderstood gin is and how ours has
the ability to overcome the category’s challenges. Gin’s
comeback is due to new, interesting and approachable
flavors,” Voisey continues. As for this nascent trend
continuing, “Most top bartenders are tired of vodka and
prefer gin to mix with and drink. Usually, what the top
bartenders and industry professionals in the high end sector
enjoy will be what the masses adopt in five years’ time,”
she remarks. An interesting new gin can be easier to sell to
bar managers and bartenders than a new vodka, she declares.
“It is almost impossible to introduce a new vodka to a bar
without being chased out the door or have eyes roll at the
very least. And while gin may not be heavily demanded in a
bar, if the right venue is selected where the bar manager is
passionate and takes ownership of his or her spirit
selection then a new, interesting product enjoying
tremendous growth across the country has appeal. Couple that
with beautiful, great tasting new cocktails and there is
certainly enough reason to give it a try. That is the
message. I also do a lot to educate about what gin is, how
it’s made, where it comes from and its contribution to the
cocktail and drinks culture over the years,” says
Voisey.

Long a
formidable category presence, Bombay Sapphire is not taking
its success for granted. One innovative effort Bacardi USA
plans to use in 12 markets this year to foster greater
appreciation for food and gin is the company’s Perfect
Pairings Program. In conjunction with gq and gourmet, five
consumers will be chosen in each city to work with a
celebrity chef and bartender. In 2O minutes, three people
create a dish from a mystery basket of ingredients, while
two others work with the bartender to create a Bombay
Sapphire cocktail that complements the dish, explains Giles
Woodyer, Brand Director for Bombay Sapphire. “Sapphire goes
really well with spicier, Asian foods and seafood. Certain
cocktails pair really well,” he says, noting Bacardi also
plans to sponsor menu pairings with Sapphire at top
restaurants across the country.

“It’s going to
be great for the category. If there’s more competition and
more people are becoming interested, we welcome it because
we’ll be discovered.” Overall, Woodyer says, “I am very
optimistic. The interest in gin is continuing to peak with
bartenders and the trade. There seems to be a buzz around
gin and I’m not sure what’s been driving it.” One
possibility he offers is that, “The younger bartenders have
grown up with vodka and are now discovering gin and are
fascinated by it. There are a lot more options in the
category. Sapphire has driven the ultra premium segment and
allowed others to enter.” Bombay Original continues to grow,
too, says Woodyer, appealing more to older, traditional gin
drinkers who like a more Juniper focus. With its more
balanced flavor set, Sapphire has good potential to attract
newcomers to the gin category, he explains.

It looks like
gin is slouching to where tequila and single malts were two
years ago. With trade and consumers keenly interested in new
flavors, new gins and retro cocktails, it seems all signs
are pointing to gin to make a significant leap in acceptance
and sales. Those in the industry may do well to heed these
signs.