Gin Boom or Bust
Weekly Adventure
Oh-ho! You didn’t expect a task up at the top, did you!? Surprise!
Well since today is all about the gin boom and potential bust, I’m asking you to go make yourself a gin & tonic before you read. I know you have gin in your home bar - everyone has gin in their home bar! Tonic might be a stretch though… so if you must, you may also have a gin & juice.
Cheers,
Molly
Get the Show on the Road
I love me a mean gin & tonic.
A T&T specifically (Tanqueray & Tonic, for you non-gin drinkers out there) screams summer. There’s just not another high ball that is quite as refreshing to me.
And - hurray for me - for about the past decade we’ve been in the midst of a gin boom.
Craft distilleries have been popping up all over the place, and one of the first things bottled will always be a craft gin.
Quick Background
Let’s quickly summarize what gin is, for the people in the back.
Gin is a distilled spirit, flavored with pretty much any botanicals you want… plus juniper. That last part is the important (and regulated) part.
Now, “regulated” is a bit of a strong term, as technically the wording of the regulation is: “possesses the characteristic flavor of juniper berries,” but you absolutely must have juniper in the recipe.
Gin derives its name from a different, but similar spirit, Jenever. This is the juniper-flavored traditional drink of Holland and Belgium. “Gin” is just the English-ized word that developed when the traditional drink made its way to the UK from the continent.
The two drinks have since developed and become increasingly different from each other, and gin really took off in England.
If you’re interested in learning more about the different types of gin, including Jenever, check out my article, “The Scuttlebutt on Gin.”
Rise of Gin
It’s funny to say “the rise of gin” because, generally speaking, gin has always been fairly popular, especially in England.
However everything goes through its ups and downs.
For awhile in the late 20th century, gin had a reputation as an “old person drink” and was actually seen as the “vanilla ice cream” of the distillation world, (which personally I think is vodka, but I digress…) and the only people asking for it were G&T and martini drinkers.
But that all started to change in 2009 when the English brand Sipsmith was founded. Sipsmith played a vital role in the resurgence of craft distilling. They were the first new copper-still distillery to open in England since 1820, and really focused on small batch gin production.
They were the first of many, many craft distillers that quickly realized alcohol drinkers were looking for new, different, and exciting. They were looking for experiences and drinks with a story, not just “piney” taste in a bottle.
It followed the exact same consumer logic as craft beer had seen just a few years prior, and in the last 10 years gin has overtaken vodka as the most popular spirit in England.
And it definitely is craft gin that buyers are looking for. Again in England, in 2018 sales of artisan brand gins at large grocers were up 167%, compared with a 30% rise in mass-produced brands.
“We are beginning to hear of people being disenchanted by a product made in such huge volumes. To some extent it has lost its romance.”
But it’s not just a push from the buyer that made the boom so boomy. The craft distilleries themselves were very happy to jump on the gin train, and pump out their own version of the botanical drink. The reason being is that gin is relatively easy to produce. It does not need to go through any sort of aging or barreling process.
Even if a distiller is more interested in making whisky or rum, they may produce a gin first to provide income for the company while they just waiting for the brown liquids to soak up all that woody barrelly goodness.
Makes sense from a business standpoint, and the distillers are happy to supply the flood of gin being asked for!
But therein lies the problem.
The Fall of Gin?
Many in the industry are now saying that the age of gin is over.
The main reason? The market is saturated.
In January of 2022, 820 distilleries in the UK producing gin. That number is up from 190 in 2015.
So the numbers are there to support the boom - but also the over-saturation and impending bust.
“It will be a brave move for anyone seeking to join the bandwagon at this late stage.” Lisa Halstead buyer of Master for Malt confirmed to Harpers Wine and Spirits that “there are fewer brands coming to market.”
According to the CGA, the top ten British gin brands in 2021 were down by 22.8% by value compared with the previous year. The market has officially plateaued and consumers have turned their head to the next big trend to arise.
Matt and I personally saw this during our trip to Scotland. We stopped in at a brand new brewery slash distillery while in Inverness, and asked the bartender if we could sample some of their spirits - and he said no. They had just opened about a month earlier and had just completed some of their first barreling over the past fortnight. Had they been a gin producer, this wouldn’t have been a problem. That’s by far enough time to bottle their first round of gin! But they had decided as a company not to focus on anything but whisky. The bartender mentioned the main reason behind not producing a gin, specifically, was the over saturation of the market. It just wasn’t as profitable to release a craft gin anymore, unless you have big backing or a really good marketing hook.
Instead, this distillery had decided to start a brewery alongside their whisky; so at least they have something you can sip on while waiting for three years and a day.
And a quick note here: most of this post references the UK. The U.S. is not seeing as sharp an initial decline, but we are seeing revenue trail off and begin to taper. However, experts do not think the decline will ever affect the U.S. as much as the UK, as we didn't have as saturated a market and annual growth has always been a bit lower here anyway.
The ray of sunshine in all this is that while the craze is plateauing, no one thinks that the market will go back to what it was entirely.
Many are saying it will be quality over quantity; consumers are looking for storytelling and innovation, and many of the craft distilleries are ready to provide.
References
https://worldofbooze.wordpress.com/2022/07/28/the-gin-boom-is-officially-over/
https://theginisin.com/articles/peak-gin-in-the-united-states/
https://en.wikipedia.org/wiki/Gin
https://www.metropoleonwalnut.com/news/2015/bar-blips-saying-give-gin-chance/