Global Gin Insights - just-drinks · consumer interest in gin, younger demographics and the...

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Global Gin Insights

Gin brands have traditionally suffered as younger adult drinkers did not find a drink enjoyed by their parents that appealing. Generational cycles help to explain the revival being seen in the gin market:

“Younger drinkers tend to reject drinks enjoyed by their parents and, just as Baby Boomers adopted vodka to distinguish themselves from their parents’ love of gin and whisky, so Millennials are now showing signs of returning to gin (and, indeed, whisky).”

While the global market is broadly flat, totalling some 45.3m nine-litre cases in 2013, the report points out that when low-priced products are stripped out, the picture is decidedly rosier:

“Excluding low-priced gin, the picture is slightly healthier; the value gin slump disguises premium growth,” the report states. The positive portents are further confirmed by the value figures. In 2013, the global gin market (travel retail and domestic including excise duties) rose by almost 6% to US$5.85bn in 2013.

Notwithstanding the significance of the US market, the report suggests Europe is arguably the most exciting region for the category in 2014, with more than one-third of the global market and a mix of mature and emerging markets:

“The powerhouse markets of Spain and the UK continue to thrive in the premium and above categories in particular, boosted by increasing consumer interest in gin, younger demographics and the twin-track G&T/cocktail trends.”

A market trend being seen in the UK also gives cause for optimism among gin marketers. Not only is the demographic a lot more youthful than it was, gin’s increasing trendiness has also boosted its appeal with female drinkers.

Central to the future success in major, premium-orientated gin markets is placing emphasis on taste discernment in brand choice. Such is the importance of the taste profile of gin brands that some marketers contend it would be a flawed approach for gin to try to copy the successful blueprint of the vodka sector.

The report contends that one of the reasons why gin fell behind other categories is that brand owners devoted little effort to consumer education, and there is now a concerted move to put this right: “Marketers now accept that there is a need to explain product quality, distillation methods and/or taste,” says the report. “Relatively few consumers understand what gives gin its distinctive flavour, particularly the crucial role

Global Gin Insights points to better fortunes for the gin market. Key findings from this all-new report:

played by botanicals.”

Gin’s Long Quest for Kwan

CommentBy Richard Woodard

For a spirits brand, what does being a “category leader” mean? Is it purely a blunt measure of cases sold? Profit made? Or something more elusive and nebulous? Richard Woodard, gin in hand, investigates.

As gin continues its revival around the world, you might expect the best-selling brand in the category to be spearheading that renaissance. But it isn’t.

An American football-playing character in the film Jerry Maguire talks about his desire to have the “kwan”. This intangible concept isn’t – despite the same character’s clarion call to “show me the money” – just about financial gain. Instead, it’s “love, respect, community – and the dollars too”.

It may be a somewhat wishy-washy, Western liberal idea, but I think we all know what he means. If you’re a film director, you probably want to have a box office hit, but some positive broadsheet reviews and an Oscar nomination or two wouldn’t go amiss either. Authors target the top of the best-seller lists, but aren’t averse to taking the odd literary prize as well.

In gin, the top spot in the charts (excluding low-priced brands) has long been occupied by Diageo-owned Gordon’s, thanks to a historically-strong position in the UK and assorted other markets such as South Africa, Australia and New Zealand.

But, at a time when the premium and super-premium segments are gathering speed in markets around the world, the market leader risks being left behind and dismissed as the dull, default option favoured by the casual consumer.

Instead, the big winners in the gin recovery are Bacardi’s premium-positioned Bombay Sapphire

and William Grant’s super-premium offering, Hendrick’s. In the 21st century gin world, these are the guys with the “kwan”.

Bombay Sapphire is a modern branding masterclass, created (ironically) by Diageo precursor IDV as recently as 1987, but dripping with heritage thanks in no small measure to a superlative package that combines clever echoes of the Victorian Raj with a showcase of its botanical ingredients.

You’d never dream it was distilled in unglamorous Warrington.

Meanwhile, Hendrick’s has taken super-premium gin by storm in the US, Spain and the UK thanks to a blend of quirky marketing irreverence and botanical originality (cucumber and rose petal). Persuading the on-trade to personalise a Hendrick’s & tonic with a cucumber garnish gives an added touch of branding brilliance, and has almost catapulted it into the global gin top ten.

Through all of this – and here at least I doff my cap – Gordon’s has managed to hold steady in its topmarket, the UK (although it has declined elsewhere), but only through a series of line extensions involving pre-mixes and two flavoured variants. And, somehow, fannying around with elderflower and cucumber (now, where did they get that idea from?) spin-offs doesn’t quite do it for me.

The flavours are a particular concern. I’ve said this before, and I’ll say it again: Gin has a hard-won, distinctive identity, and anything that monkeys around with that USP risks trespassing into flavoured vodka territory. Given its current turnaround in fortunes, why on earth would gin want to do that?

Diageo will say (indeed, has said) that these products are a great way to entice new consumers into the category, but for me that won’t wash. If you want to get people to drink gin, get your branding and your product right (as have Bacardi and William Grant). Don’t try to shore up an ailing brand franchise by diluting it further with some frankly uninspiring NPD.

I can see the difficulty that Gordon’s faces as a standard gin in an increasingly-premium world, and it isn’t alone: in Spain, Beam Suntory-owned Larios has seen its volumes halve in the past decade, and even the introduction of a premium variant, Larios 12, has done little to stop the bleeding.

Sometimes the market just leaves some brands behind.

Come to think of it, Gordon’s isn’t the world’s best-selling gin anyway. That accolade goes to Ginebra San Miguel, although it has been typically left off the rankings because it’s a low-priced product almost exclusively confined to its home market of the Philippines.

San Miguel outsells Gordon’s by almost two to one, but if the Diageo brand is having a bit of a fallow period right now, it looks downright buoyant compared to its larger rival.

Ten years ago, San Miguel had annual sales of more than 22m cases – but by last year, that figure had shrunk to just 8.4m cases. That’s still big - the biggest gin brand in the world, remember - but, like Gordon’s and Larios, can San Miguel really claim to have the “kwan”? I think not.

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© 2014 All content copyright Aroq Limited and The IWSR. All rights reserved.This report is the product of extensive research work. It is protected by copyright under the Copyright, Designs and Patents Act 1988. The authors of Aroq Limited’s and The IWSR’s research reports are drawn from a wide range of professional and academic disciplines. The facts within this report are believed to be correct at the time of publication but cannot be guaranteed. All information within this study has been reasonably verified to the author’s and publisher’s ability, but neither accept responsibility for loss arising from decisions based on this report.

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Global Gin Insights

About this reportWe’ve taken a fresh look at how to deliver spirits category insight. This reports series is focused on providing data with meaning, backed up with actionable insights.Discover the essentials for your business, and what will drive profit and growth. Gain the most important global strategic insight, and quickly. Grab the facts and use them - instantly.

Use this report to gain a global view on the category with its:• top-down world drivers of leading markets, consumers and product

innovation;• future category growth hotspots - visualised;• top markets, brands, owners - ranked by volume and value;• insider information from leading brand owners;• Essential insight - in one quick-to-use package.

A trained newspaper journalist, Richard Woodard has been writing about the wine and spirits industries since 2000, including stints as editor of Wine & Spirit International, The Drinks Bulletin and The Spirits Business.

He is a regular freelance contributor to a wide range of trade and consumer drinks magazines and websites, and has been writing regularly for just-drinks since 2006, including a monthly column on the international white spirits sector.

Richard Woodard

Jose Luis has been with the IWSR since December 2000. In this time he has covered every continent for our research.

Due to his vast experience and knowledge Jose Luis is tasked with ensuring our research is of the highest quality and continues to improve each year. Currently Jose Luis covers the North African, Caribbean, South American and major Asian markets for us.

Jose Luis Hermoso

Alex has been with the IWSR for 15 years and has reported from all corners of the globe. He has a wide contact base and deep understanding of the global markets having written about the alcohol industry for 24 years.

Before joining the IWSR, Alex worked for Shanken International in London and New York and UPI on Capitol Hill.

Alexander Smith

About our analysts

World view dashboard ..........................................................................................................................1

Market conditions .................................................................................................................................2

Market key views ...................................................................................................................................3

Future category prospects ................................................................................................................... 6

Consumer drivers ..................................................................................................................................8

Consumer key views .............................................................................................................................9

Product innovation ................................................................................................................................10

Product key views .................................................................................................................................11

Brands and owners ...............................................................................................................................12

EUROPE ..................................................................................................................................................19

Spain .......................................................................................................................................................20

United Kingdom .....................................................................................................................................24

France .....................................................................................................................................................28

Central/Northern Europe ......................................................................................................................32

Italy .........................................................................................................................................................40

Nordics ...................................................................................................................................................44

Turkey .....................................................................................................................................................49

Russia/Eastern Europe .........................................................................................................................52

THE AMERICAS .....................................................................................................................................56

United States .........................................................................................................................................57

Mexico ....................................................................................................................................................61

AFRICA ...................................................................................................................................................65

South Africa/ .........................................................................................................................................66

Sub-Saharan Africa ...............................................................................................................................66

ASIA-PACIFIC .........................................................................................................................................70

The Philippines ......................................................................................................................................71

India ........................................................................................................................................................75

Australia and New Zealand .................................................................................................................. 79

Travel retail .............................................................................................................................................86

Usage and copyright statements ........................................................................................................ 90

Table of contents

List of tables & figures

Top 20 markets for gin, 2009-2013 (‘000s nine-litre cases) .............................................................. 4

Top 20 global brands & owners’ volumes, 2009-2013 (‘000s nine-litre cases) ............................... 15

Top 20 global brands & owners’ retail values, 2009-2013 (‘000s US$) ............................................ 17

Top companies in Spain, retail value (000’s US$, ‘09 and ‘13 % share) ........................................... 21

Gin brands in Spain, 2009-2013 (‘000s nine-litre cases) ................................................................... 22

Gin brands in Spain (% Share 2009) .................................................................................................... 23

Gin brands in Spain (% Share 2013) ..................................................................................................... 23

Top companies in United Kingdom, retail value (000’s US$, ‘09 and ‘13 % share) ......................... 25

Gin brands in United Kingdom, 2009-2013 (‘000s nine-litre cases) ................................................. 26

Gin brands in United Kingdom (% Share 2009) .................................................................................. 27

Gin brands in United Kingdom (% Share 2013) ................................................................................... 27

Gin brands in France, 2009-2013 (‘000s nine-litre cases) ................................................................. 29

Gin brands in France (% Share 2009) .................................................................................................. 30

Gin brands in France (% Share 2013) ................................................................................................... 30

Top companies in France, retail value (000’s US$, ‘09 and ‘13 % share) ......................................... 31

Gin brands in Austria, 2009-2013 (‘000s nine-litre cases) ................................................................. 33

Gin brands in Austria (% Share 2009) .................................................................................................. 34

Gin brands in Austria (% Share 2013) .................................................................................................. 34

Top companies in Germany, retail value (000’s US$, ‘09 and ‘13 % share)...................................... 35

Gin brands in Germany, 2009-2013 (‘000s nine-litre cases) .............................................................. 36

Gin brands in Germany (% Share 2009) ............................................................................................... 37

Gin brands in Germany (% Share 2013) ............................................................................................... 37

Gin brands in Switzerland, 2009-2013 (‘000s nine-litre cases)......................................................... 38

Gin brands in Switzerland (% Share 2009) .......................................................................................... 39

Gin brands in Switzerland (% Share 2013) .......................................................................................... 39

Top companies in Italy, retail value (000’s US$, ‘09 and ‘13 % share) .............................................. 41

Gin brands in Italy, 2009-2013 (‘000s nine-litre cases) ...................................................................... 42

Gin brands in Italy (% Share 2009) ....................................................................................................... 43

Gin brands in Italy (% Share 2013) ....................................................................................................... 43

Gin brands in Denmark, 2009-2013 (‘000s nine-litre cases) ............................................................. 45

Gin brands in Denmark (% Share 2009) ............................................................................................... 46

Gin brands in Denmark (% Share 2013) ............................................................................................... 46

Gin brands in Sweden, 2009-2013 (‘000s nine-litre cases) ............................................................... 47

Gin brands in Sweden (% Share 2009) ................................................................................................ 48

Gin brands in Sweden (% Share 2013) ................................................................................................. 48

Gin brands in Turkey, 2009-2013 (‘000s nine-litre cases) .................................................................. 50

Gin brands in Turkey (% Share 2009) ................................................................................................... 51

Gin brands in Turkey (% Share 2013) ................................................................................................... 51

Top companies in Russia, retail value (000’s US$, ‘09 and ‘13 % share) ......................................... 53

Gin brands in Russia, 2009-2013 (‘000s nine-litre cases) ................................................................. 54

Gin brands in Russia (% Share 2009) .................................................................................................. 55

Gin brands in Russia (% Share 2013) ................................................................................................... 55

Top companies in United States, retail value (000’s US$, ‘09 and ‘13 % share) .............................. 58

Gin brands in United States, 2009-2013 (‘000s nine-litre cases) ...................................................... 59

Gin brands in United States (% Share 2009) ....................................................................................... 60

Gin brands in United States (% Share 2013) ....................................................................................... 60

Top companies in Mexico, retail value (000’s US$, ‘09 and ‘13 % share) ........................................ 62

Gin brands in Mexico, 2009-2013 (‘000s nine-litre cases) ................................................................ 63

Gin brands in Mexico (% Share 2009) .................................................................................................. 64


Top companies in South Africa, retail value (000’s US$, ‘09 and ‘13 % share) ............................... 67

Gin brands in South Africa, 2009-2013 (‘000s nine-litre cases) ....................................................... 68



Top companies in The Philippines, retail value (000’s US$, ‘09 and ‘13 % share) .......................... 72

Gin brands in The Philippines, 2009-2013 (‘000s nine-litre cases) .................................................. 73

Gin brands in Philippines (% Share 2009) ........................................................................................... 74

Gin brands in Philippines (% Share 2013)............................................................................................ 74

Top companies in India, retail value (000’s US$, ‘09 and ‘13 % share) ............................................ 76

Gin brands in India, 2009-2013 (‘000s nine-litre cases) .................................................................... 77

List of tables & figures

Gin brands in India (% Share 2009) ...................................................................................................... 78

Gin brands in India (% Share 2013) ...................................................................................................... 78

Top companies in Australia, retail value (000’s US$, ‘09 and ‘13 % share) ..................................... 80

Gin brands in Australia, 2009-2013 (‘000s nine-litre cases).............................................................. 81

Gin brands in Australia (% Share 2009) ............................................................................................... 82

Gin brands in Australia (% Share 2013) ............................................................................................... 82

Top companies in New Zealand, retail value (000’s US$, ‘09 and ‘13 % share) .............................. 83

Gin brands in New Zealand, 2009-2013 (‘000s nine-litre cases) ....................................................... 84

Gin brands in New Zealand (% Share 2009) ........................................................................................ 85

Gin brands in New Zealand (% Share 2013) ........................................................................................ 85

Top companies in travel retail, retail value (000’s US$, ‘09 and ‘13 % share) .................................. 87

Gin brands in travel retail, 2009-2013 (‘000s nine-litre cases) .......................................................... 88

Gin brands in travel retail (% Share 2009) ........................................................................................... 89

Gin brands in travel retail (% Share 2013) ........................................................................................... 89

World view dashboardAmericas

Travel retail

Africa & Middle East Europe CIS Asia Pacific

XXXX

XXXXXXXXXXXXXXXXXXXX

1. XXXX2. XXXX3. XXXX






XXXX

XXXX

XXXX XXXX XXXX XXXXFASTEST GROWING BRAND

TOP OWNERS

CAGR

Market conditionsA broadly flat global market: The global gin market amounted to 45.3m nine-litre cases in 2013 (domestic and travel retail). At first glance, gin’s global performance over the last decade looks unremarkable: if we exclude the Philippines, where cheap local juniper-flavoured spirit Ginebra San Miguel has shed 12m cases since 2003, the market would be broadly flat over the period.

Quote

Quote

Bulldog Gin chief marketing officer Bob Beleson

Hayman Distillers director Miranda Hayman

Review

In this section, we summarise the global market situation, product innovation or consumer drivers

Insight

We highlight salient points gained from our drinks analysts’ many years of industry experience

Future

In as few words as possible, we outline the short-term outlook across markets, product innovation or consumer drivers

Strategy

We aim to convey what this insight means for you and summarise recommended future strategy

Market key views

Top 20 markets for gin, 2009-2013 (‘000s nine-litre cases)Source: IWSR

Rank Market 2009 2010 2011 2012 2013 % CAGR

1 XXXX XXXX XXXX XXXX XXXX XXXX XXXX




















Future category prospects

xxxx xxxx xxxx

BelgiumCanadaGermany

JapanSpainUK

Quote

Quote


Hayman Distillers director Miranda Hayman

Future category prospects

Global retail value of gin XXXX last year.

Main contributors to XXXX

United KingdomUnited StatesSpain

Consumer driversWhat goes around... The theory of generational cycles could help explain gin’s revival. Younger drinkers tend to reject drinks enjoyed by their parents and, just as Baby Boomers adopted vodka to distinguish themselves from their parents’ love of gin and whisky, so millennials are now showing signs of returning to gin (and, indeed, whisky).

Quote

Quote


Caorunn Gin global brand manager Ibolya Bakos-Tonner

Review


Insight


Future


Strategy


Consumer key views

Premium on the up: Premium gin enjoyed a respectable 4% CAGR between 2008 and 2013, led by Bombay Sapphire and Tanqueray – and was up 7% in 2013. Other notable and emerging premium brands include Bulldog and Broker’s. The US accounts for 53% of premium consumption, while the UK has 10% and Spain 5%.

A growing appetite for luxury gin: Super-premium had a five-year CAGR of 32%, led by Hendrick’s and Tanqueray Ten, and supported by Martin Miller’s, Citadelle, London No. 1 and G’Vine. The US leads super-premium gin consumption with a 37% share, followed by Spain at 24% and the UK at 11.2%.

Differentiating through botanicals: Producers are evolving gin’s traditional, juniper-led botanical formula. Hendrick’s, for instance, uses cucumber and rose petals, while Beefeater 24 has Japanese sencha tea. Whitley Neill’s African botanical mix includes baobab fruit and Cape gooseberries.

Product innovation

Quote

Quote

Diageo global white spirits portfolio director Peter Fairbrother

Chivas Brothers international marketing director Eric Benoist

Review


Insight


Future


Strategy


Product key views

Diageo

Diageo is the largest gin producer with a XXXshare of the global market (duty free and domestic, excluding low-priced brands), or XXX cases.

Super-premium Tanqueray has seen modest growth, rising by a CAGR of XXX from 2008 to 2013 to just over XXX cases. The US remains by far the brand’s largest market following a XXX rise in 2013 to 1.33m cases. It has also enjoyed significant growth in Spain, with a XXX five-year CAGR to XXX cases to 2013. Tanqueray’s recent performance in Canada and the UK has partially helped to offset earlier sales dips in the US.

Brands and owners

Bacardi

Bacardi, the third-largest gin producer, had sales of 2.87m cases in 2013, giving it a XXX share of the market.

Bombay Sapphire has been one of the most successful brands in the global marketplace, posting a XXX CAGR between 2008 and 2013 to reach XXX cases. Moreover, it is broad-based: sales in the US surpassed the 1m-case mark in 2013 (duty free and domestic), while sales in its next-largest market – the UK – enjoyed high single-digit growth between 2012 and 2013. The brand also performs strongly in travel retail, where it overtook previous market leader Gordon’s in 2012.

Brands and owners

QUOTEQUOTE

QUOTE

Hayman Distillers director Miranda HaymanBeefeater global brand director Paco Recuero

Caorunn Gin global brand manager Ibolya Bakos-Tonner

Top 20 global brands & owners’ volumes, 2009-2013 (‘000s nine-litre cases)Source: IWSR

Rank Brand Owner Volume 2009 Volume 2010 Volume 2011 Volume 2012 Volume 2013 % CAGR % Share Volume 2013

1 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX




















Top 20 global brands & owners’ retail values, 2009-2013 (‘000s US$)Source: IWSR

Rank Brand Owner Retail Value 2009

Retail Value 2010

Retail Value 2011

Retail Value 2012

Retail Value 2013 % CAGR % Share Value

2013





















EUROPE

With more than one-third of the global gin market and a mix of mature and emerging markets, Europe is arguably the most exciting region for the category in 2014.

SpainTotal gin sales (excluding travel retail) climbed by 5% to just under 3.6m cases in 2013. Gin is virtually the only spirits category to post growth over the past five years – and that despite the deep recession.

Top companies in Spain, retail value (000’s US$, ‘09 and ‘13 % share)Source: IWSR

Owner 2009 2010 2011 2012 2013 % Share 09 % Share 13

XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX






Source: IWSR

Top companies in Spain, retail value

0.000.000.000.000.000.000.000.000.000.000.00

2009 2010 2011 2012 2013

XXXX XXXX XXXX XXXX XXXX

Gin brands in Spain, 2009-2013 (‘000s nine-litre cases)Source: IWSR

Brand 2009 2010 2011 2012 2013

XXXX XXXX XXXX XXXX XXXX XXXX











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