Craft Gin Brands Revive A Sleepy Category

The overall gin category remains down, but craft and premium brands are surging.

The gin category overall has declined, but retailers like France 44 Wine and Spirits in Minneapolis (display pictured above) say craft brands are growing fast.
The gin category overall has declined, but retailers like France 44 Wine and Spirits in Minneapolis (display pictured above) say craft brands are growing fast. (Photo by Sam Landsberg)

Gin’s trajectory in recent years has been one of steady decline, with the category shrinking 7.3 percent since 2011, according to Impact Databank. Despite the cocktail revival, legacy brands like Seagram’s, Bombay, Tanqueray, Gordon’s and Beefeater have all seen depletions slip. But retailers across the country say gin sales are booming and the growth is coming from premium, craft-oriented brands.

“Craft gin sales are rising, and we see willingness from shoppers to spend more for a bottle,” says Nate Sandstrom, buyer and manager at Wells Liquor in Baltimore. “Our older customers still show brand loyalty, but younger people are always asking what’s new this week. They want to try it all.” Sandstrom notes that two years ago, Wells stocked 40 to 50 gin SKUs ranging in price from $10.99 to $44.99, with most offerings at around $15 or under. These days, the store’s gin selection covers a similar price range across 60 to 70 SKUs, but tilts toward brands at or above $35 a 750-ml. bottle. Gin represented 7 percent of Wells’ 2015 sales, a slight increase over 2014.

Overall, the top 10 gin brands decreased by 2.9 percent in 2015, according to Impact Databank. No.-9 player Hendrick’s ($32.99 to $34.99 a 750-ml. bottle) shored up the category against steeper declines by posting 19.5-percent growth to 294,000 cases. Other than No.-4 brand New Amsterdam ($13.99) and No.-8 label Barton ($6.99), which were both flat, the remaining top seven gins all shrank. Leading player Seagram’s ($11.99) showed the steepest losses, falling 6.6 percent to 2 million cases, while No.-2 Tanqueray ($20.99) was down 1.5 percent to 1.33 million cases. The No.-3 brand, Bombay ($23), decreased 3.7 percent to 1 million cases, and No.-5 label Gordon’s ($7.99) declined 6 percent to 550,000 cases. Beefeater ($24.99), Gilbey’s ($9.99) and Burnett’s ($10.99) also posted losses.

But the category shows great promise in the craft and artisanal arena, and many regional brands are finding success in their home markets. “There are 16 distilleries in Minnesota that make gin, and I have 23 of their products on the shelf,” says Tom Schneider, liquor consultant at Minneapolis retailer France 44 Wine and Spirits. Premium-priced local brands make up roughly a third of the store’s gin sales. “We sold well over 1,000 cases of gin last year, and the average price was $30 a bottle,” he adds.

Established gins like Bombay are innovating with new styles amid overall sales declines.
Established gins like Bombay are innovating with new styles amid overall sales declines.

Segment Divisions

Today’s gin consumers tend to split on style preference. Some remain dedicated to the traditional London dry, while others are exploring New Western–style gins, which typically have a softer flavor profile. Aiming to attract both audiences, brands like Tanqueray and Bombay go beyond their core London dry offerings with such labels as Bombay Sapphire East ($23 a 750-ml. bottle), made with lemongrass and black pepper, and Tanqueray No. Ten ($34), which incorporates citrus and chamomile. “Consumers nowadays understand that gin takes many forms, with a variety of flavor profiles,” says Rachel Ford, national gin ambassador for Tanqueray brand owner Diageo.

Brockmans gin ($34.99 a 750-ml. bottle) contains such traditional botanicals as juniper and coriander, as well as more unique flavorings like blackberry and blueberry. “People are open to new styles,” says New York City market manager David McNicoll. “They see brands like Brockmans as bringing something unique to the table.” Hendrick’s senior brand manager Kirsten Walpert agrees. “People are much more open to gin than ever before,” she says. “They’re looking for flavorful spirits.”

Retailers observe how distinct styles are driving customer demand. “There’s a dichotomy: Some purists prefer London dry and others go for citrus-forward gins,” notes Schneider of France 44. “Both styles are surging in sales, but different customers are buying each type.” He says that many people are entering the category through Hendrick’s, which features rose and cucumber. “Hendrick’s is a gateway gin,” Schneider explains.

Sandstrom has the same experience at Wells Liquor. “Some people have a negative connotation of gin until they try one that’s not so juniper-forward,” he says. Nevertheless, London dry leaders Bombay, Beefeater, Gordon’s and Tanqueray remain the store’s best-selling gins, although craft variants are coming on strong. “Among older customers, there’s brand loyalty, but younger people want what’s new,” Sandstrom notes. “Greenall’s is a small London dry brand that’s done very well. It’s priced in line with Beefeater and Bombay and gives consumers a less familiar alternative.”

At D&M Wine and Spirits in San Francisco, spirits buyer Andrew Lincoln helps customers navigate the distinct styles of gin and find unique offerings. “Lots of customers want to try something different, and they often ask for local products,” he explains. “For citrus-forward brands, I suggest Venus Spirits Blend No. 01 gin from Santa Cruz or Corbin Cash Western dry gin from the San Joaquin Valley. If a customer wants a London dry, I recommend Sipsmith from London or The Botanist from Scotland’s Islay.” Sebastopol, California–based Spirit Works distillery created a Zinfandel barrel–aged gin for D&M that Lincoln notes sells well despite its $45.99 a 750-ml. bottle price tag.

With its unusual botanicals and experience-driven marketing, Hendrick’s has opened the gin category to a new generation of consumers.
With its unusual botanicals and experience-driven marketing, Hendrick’s has opened the gin category to a new generation of consumers.

Proliferating Potential

With roughly 95 gin SKUs on the shelves during peak selling months, France 44 helps customers navigate the choices via its in-store tasting bar, which has 45 brands available to try. “People come to explore and find something new,” Schneider says. “They’re not shy about picking up a wacky bottle. Often they find the perfect gin to make several different cocktails, but they wouldn’t have known without tasting it. The hand- sell is so important, especially in gin.”

But the proliferation of brands has a drawback. “It’s all becoming increasingly difficult to navigate,” says Sandstrom of Wells Liquor. “We sample at least 50 new gins a year. Many are good, but there’s only so much shelf space.” Schneider notes that crowding affects large and small brands alike. “The saturation of regional brands has suppressed some national craft gin sales,” he explains. “Everything has increased across the board, but there are a lot of fish in the sea right now. Unless a brand already has strong support in the market, it’s probably not going to do well because there are so many feet on the ground locally.”

Despite the overcrowding, the category appears poised for gains, and retailers are excited about its potential. “Gin is getting better all the time,” says Lincoln of D&M. “So many distilleries are making quality gins, and I think we’ll continue to see great things. The sky’s the limit.” Sandstrom agrees, although he’s not writing off the big brands. “The major lines will continue to dominate total share, but smaller, independent distillers will chisel away at it,” he explains. “I wouldn’t be surprised to see some of the big guys selectively acquire smaller brands, as Pernod Ricard recently did with Monkey 47 gin.” The local factor will also keep driving gin’s premiumization. “More consumers will be willing to go up in price to get something unique and local,” Sandstrom adds.

Schneider agrees. “Gin sales are increasing at a rapid rate,” he says. “I’ve never sold more gin than I did last year, and I’m going to sell even more this year—a wide array. If a spirit is well made, the brand will find a niche and people will buy it.”