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Global Frontiers

Juniper Berries Gin Botanical
four pillars
four pillars at imbibe
Melbourne Gin Company
Saffron Gin Botanical
Four Pillars Gin
Elephant-Gin-3_340x250_acf_cropped
Elephant Gin botanicals
monkey 47
Monkey 47 Label
Apiary Gin
Inverroche Distillery
Four Pillars Gin Botanicals
Four Pillars Gin Distillery
16/07/2014
Written by Gin Foundry

We can all take an educated guess as to which world markets gin has a strong presence and foothold in. The United States, the United Kingdom and Spain are obvious ones, but has anyone been paying attention to those smaller markets that are up and coming and worthy of our attention? What about the state of gin globally. If one took an all-encompassing view on the gin category – where are we?

The truth is, both media and gin fans alike aren’t talking about places like the Philippines. Surprisingly, it is the world’s largest gin market with some 22 million cases consumed a year totalling 43% of the overall global share and where one brand, Ginebra San Miguel rules as supreme king. Nor are we talking about India, the fifth largest market and whose long history with tonic is well documented.

It’s time we looked at those countries outside the big three, who are growing from strength to strength each year but somehow escape our radars. Australia, Germany, Sweden, Uganda, Venezuela and Japan are all frontiers where gin is, perhaps surprisingly in some cases, flourishing. With our readership based all around the world and mails flooding in for insight into a wider global perspective on the category, we’ve taken a moment to offer up a snapshot of what is going on in some of these new frontiers and a few thoughts as to the overall state of gin mid way through the year.

Australia

First up in our list is Australia and to a certain extent its neighbour New Zealand. There has been a real buzz coming from down under with gins like Four Pillars and West Winds really making a name for themselves. In 2013, according to Roy Morgan Research, there were 947,000 Australian gin drinkers up from 636,000 in 2009. Men account for 40% of gin drinkers in Australia, up on previous years and a fact which should be seen as a very encouraging number for all male gin lovers around the world who defend what is often perceived as a “female” centric spirit. The number of gin drinkers aged between 25 and 34 years of age has also increased from 126,000 to 205,000 between 2009 and 2013. Bring on that new generation eh?!

We’ve had the chance to taste Four Pillars Gin and a few other Australasian gins here at Gin Foundry HQ and we must admit that due to the novel variety in botanicals found on the continent, their gin market is ripe and the possibilities endless. Four Pillars, created in 2013, is a craft distillery located in the Yarra Valley – close to Melbourne – and uses a CARL copper pot still called Wilma to produce its Rare Dry Gin. Funded through Pozible – an Australian version of Kickstarter – Four Pillars is the brainchild of Cameron Mackenzie, Master Distiller, Stuart Gregor and Matt Jones who want to produce the best craft spirits Australia has to offer. Tasmanian Pepperberry Leaf and Lemon Myrtle make up two of the more interesting botanicals in the line up and is something Australian gins should be proud of. We’ll be writing up a full review on Four Pillars Gin very shortly, but they are a prime example as to why the Australian market has a lot of potential.

The rise of small craft distilleries has clearly had the same impact it has had in the US and the UK, but one sure way of getting anyone to drink more gin is by convincing bars to pour it more often in cocktails. Gin bars like the Gin Garden in Sydney or the Gin Palace in Melbourne are definite must-visits and a strong bar scene is a big reason why gin is growing at such a rapid pace there. Gin has always been a firm favourite amongst bartenders and cocktail enthusiasts as its botanical canvas allows for infinite creations.

The combination of Craft distilling hitting its shores, cocktail culture maintaining its place, good GDP and no real nationwide crisis in the past 24 months has resulted in the category growing by 7% in total gin consumption in 2014. Australia is a boom once more and as always, a rising tide floats all boats.

Other notable gins to try out in Australia would be Botanic Australis Gin, Godfather Pepperberry Gin, The Melbourne Gin Company and Stone Pine Gin. If you’re heading across to New Zealand why not have a try of South Gin, Broken Heart Gin – which have one of the most beautiful label designs we’ve seen in a while – Lighthouse Gin and Black Robin Gin. We love hearing about new distilleries popping up in distant places and cannot wait to see Australia and New Zealand stamp their way onto the global market just like they did with their wines. With many fans over the world working to make their spirit available in other markets (ourselves included) – it’s just a matter of time.

 Germany

Whilst growth in gin consumption is predicted at 1% for Germany in 2015 by analysts at Euromonitor, Ferdinand’s Saar Dry Gin, Monkey 47 Gin, Adler Berlin Dry Gin, The Duke Gin and Elephant Gin are all examples showcasing the rise in smaller producers. It may seem like static growth from an overall category perspective but there is a healthy undercurrent happening across the country. Where there are small producers flourishing, it’s usually an indication that there is support and passionate fans who are seeking out their products.

Another facet to German gins capturing our attention here at Gin Foundry HQ is that there are notable examples of producers using both national heritage and regional produce to great effect. Ferdinand’s Saar use a precise measure of Schiefer Riesling. The semi-sweet Rieslings from the Saar are noted for their elegance and fruity radiance and in time, these qualities come through in the gin. It’s a great example of using local provenance to great effect.

There is also a long standing tradition of fruit brandies and schnapps near the Black Forest and throughout the country, and some of that know-how can be seen playing out in the production of gin. Case and point: Monkey 47. Their distiller was formally an infamous producer of some of the best fruit brandies available. Now a ginsmith, he has brought some of that experience along with him and the way they choose their botanicals and distil them has been influenced by generations of wisdom learnt from producing other liquors.

Furthermore, there’s a reason that many craft producers use Christian Carl, Arnold Holstein and other German still makers, they are the best. While we expect the category to remain steady in terms of overall consumption, now that the Euro zone’s economic future is looking less unstable, expect to see more brands and producers emerge in Germany as opposed to exporting all that experience and hardware abroad.

Rest of the World

Venezuela may not seem an obvious choice for gin brands to be battling it out but they lie an impressive 13th in overall consumption. Euromonitor data and other insiders have been telling us to expect little to no growth at all this year, especially due to the state of economics in the country and in general in South America. It’s a good reminder that opinions, trends and marketing spend matter in establishing a scene – but a country’s overall economy is one of the deciding factors as to whether consumption will increase or decrease. Who knows whether more entrepreneurs, or established brands even, will use Venezuelan natural resources and its botanical diversity to great effect and if a national gin will be created…

Gin’s imminent future in India looks gloomy too although for very different reasons. There has been a decline of 4% in gin consumption over the past 18 months. It is said to be as a result of consumers turning to higher ABV whiskies and rums, with the respective categories rising fast in an increasingly affluent country. With the super rich looking at Whisk(e)y as both a must have consumable and collectable commodity, it’s hard to see how gin, as a spirit by itself, will compete over the next year or so. Long term however, the future is bright. Whilst it may take a while before cocktail culture sets in across India when it does expect gin to make a comeback – especially as with it will come with a wave of Indian owned brands, distillers and entrepreneurs who will no doubt take the spirit to a whole new level. That said, whether gin will ever shake off it’s Imperial heritage and find an identity away from the stigma of the British is another question altogether, so who knows how long it will take before it will be universally loved.

Unknown to many as a juniper crazed country, Uganda ranks in at number 7 on the overall gin consumption charts. With few brands exporting there, it’s a smaller scale example of the Philippines where one brand almost has a complete monopoly. There is also a large amount of unregulated manufacturing (Moonshining) thought to be taking place and ignored by authorities too. There are familiar gins available out there with some of the international gins present (in tiny amounts and mainly in tourist locations) and exporting to the African state. However it’s hard to predict what the future holds for Ugandan gin as so much is nationally based (and dependent on their own economics, politics etc) while so little is determined by foreign gin brands operating in the area. It’s thought that the reason gin consumption is so high in Uganda is because Uganda ranks high on the world’s leading consumers of alcohol in general (based on per capita consumption, taken from the 2004 WHO Global Status Report on Alcohol). Perhaps as poverty declines so too will the overall consumption of poorly made juniper based spirits.

Uganda may be an outlier in terms of global data, but it’s an interesting market to keep an eye on and a reminder that with a wider angle view on the world of gin (both figuratively and literally) – not all is as it seems.

So, what about an all encompassing overview of gin consumption in the world and more importantly, where is the category heading in the next 24 months?

Outside of the big three of the USA, Spain and the UK, there are lots of positive signs around the world that gin consumption is stable. According to Euromonitor – 2015 growth is predicted to be in decline by -0.4% but with a global hat on – this can be summarized as “business as usual”. With the biggest brands by volume (in no particular order here) Gordon’s, Bombay, Seagram’s, Beefeater, Tanqueray, Ginebra San Miguel and Larios all fighting it out to retain their market share, the category is in an interesting space.

Hundreds of smaller craft brands may have emerged and rejuvenated the interest in the category but in sales terms they remain small change. Growth at the craft end of the category might capture all the headlines but the reality is that, globally, it represents less than 5% of the total sales in gin.

To some extent for gin fans worldwide, this can be seen as a good thing. The optimists will look at how many craft gins are out there and given that they only represent a small margin of the category – tell you that there is potential for hundreds more to launch in the next two years. It’s doubtful, but it’s not impossible either (we certainly hope so). The reality of this being possible is quite clear, however to keep so many producers afloat craft gins will need to take sales away from the bigger players otherwise there will be an over-saturation of brands in one segment of the market, and not enough gin sold to sustain them all.

Given almost all craft gins are owned by individuals and almost all have very little budget it’s hard to see them all unite and lead a craft revolution that will genuinely impact on the likes of Diageo and Bacardi. Even if that is the case, expect to see a couple of success stories emerge from the craft gin producers as opposed to a mass assertion of dozens of one-man-bands into the global market.

In our opinion the craft end of gin isn’t reaching saturation due to the overall consumption of gin remaining static or in decline, but because of the majority of small producers’ inability to transcend into real contenders, with marketing savvy and a truly international proposition.

It’s very easy to see competitors who are based down the road, operating on a similar scale and therefore seeing them as rivals. But isn’t it about time some of those smaller guys started breaking the taboo that whilst they are small, passionate and devoted to slaving over their micro-pot-stills, they are also looking to take on Hendrick’s, Larios and others in the Spanish market?

In order to transcend being a craft scaled operation many will need to break their own glass ceilings and accept that to do so, they are going to need a radical rethink of their routes to market and their overall proposition. It’s okay to be small and think big. Sipsmith do it, Four Pillars do it and Hendrick’s have done this to perfection and while many consider them a tiny operation who have stuck to their core values – they are now selling hundreds of thousands of cases a year.

On the other hand what will the big players do? Expect the bigger multinationals to heed the lessons learnt from the craft beer movement and instead of ignoring the small producers as they did to their detriment a decade ago, they will either buy them out or out play them at their own game. With this in mind it’s possible that those craft “success” stories mentioned above may well be short lived and the definition of success will be selling one’s brand to the big boys. No doubt there are already many business plans whose exit strategy already include the words Jim Beam.

As for out-competing? We’re already seeing signs that the established gin makers may opt to simply create their own craft brands of their own. Oxley Gin (Bacardi), Burrough’s Reserve (Pernod Riccard) are already examples of this trend. Furthermore, many of the bigger brands are responding to the need for more transparency and to showcase their provenance. This was something that the craft gins have forced into the conversations of gin fans the world over. Beefeater have a new visitor center and Bombay will soon open its doors to a brand new distillery for all to see. The result is a two pronged defence, not only do some of these big players have a genuine craft gin as part of their portfolio, they have also adopted the “Unique Selling Points” of the craft segment and are integrating them with their gin’s modus operandi, totally nullifying the smaller producers point of difference.

Expect this little game to continue and to happen on a global scale and for it to be harder and harder for the small guys to sound and even look different to the likes of Tanqueray, Beefeater, Seagram’s and Gordon’s. Real craft will prevail, especially if we defend it as we’ve outlined before, but those lines are going to get blurred, and not because Robin Thicke is on the radio…

We are in an interesting place gin fans, with a very cloudy future so it’s hard to predict anything with real authority. Don’t worry though we’ll be wading through it, one gin at a time to bring you more information of how things are shaping up. There’s no impending doom around the corner just yet but things are looking like it will be a roller-coaster couple of years. Best we sit back, pour another G&T and enjoy the ride!

 

ferdinand's saar