Saturation point?

Can gin survive the plethora of new brands flooding the market? Ian Buxton reports

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PING! IT’S AN EMAIL: a gin’s been launched.Ping! A new craft distillery has opened. Ping! Here’s a crowd-funding campaign to help another artisanal gin conquer the world.

Ping! Ping! Ping! Every day it seems that my email is crowded with news of new gins. It’s hard to keep up – and I’m interested and involved with gin. So where will it stop? Will this 21st-century gin craze run out of steam? Have we, in fact, reached peak gin?

I wanted to ask some craft distillers – large and small – what they thought is driving the market, how long it can last and where it will go. Without exception they were upbeat – all their talk was of expansion, almost limitless opportunities and new worlds to conquer.

Mark Marmont is an engaging Aussie with a varied career to look back on, none of it involving distilling. He began making his 58 gin in a workshop in a converted railway arch in London in January 2015. Everything – and I mean everything – is done by hand, yet he counts high-end cocktail bars Merchant House and Dukes Bar and luxury retailer Fortnum & Mason among his accounts.

As I got off the phone to him he had just closed an investment round that will finance his tiny distillery for the next three years – allow him to take on his first staff and double or triple production. A new 60-litre still is on order and he’s discussing export enquiries from France, Canada and his native Australia.

All this has been built on hand-to-hand selling at weekend markets and by a visible presence on social media. “People want something different,” he says. “They love to meet the distiller in person and explore what’s in the product.”

On an altogether different scale, Alex Nicol of Edinburgh gin makes much the same point. “Provenance, packaging, product innovation and taste are the drivers,” he says. Launched as long ago as June 2010, which makes Edinburgh gin a veteran of the craft scene, the brand has moved rapidly from a contract distilled product to opening its own in-pub distilling operation with two 180-litre stills. Before long they were running “flat out” and in May the company will commission its new 1,000-litre still, custom designed in partnership with Heriot Watt University.

With four core products, further seasonal specials and one-offs and bespoke creations for customers’ own-brands, Edinburgh gin has come a long way. But, as co-director Jane Nicol says: “The companies aiming highest, working with scientists and investing in premium products, bottles [and] labelling will survive and be best. Others will fall away through lack of understanding of the market and not realising just how hard it is out there to be competitive and stay ahead.”

Moving up in size to the larger end of the craft scene, Bruichladdich’s Botanist has met with remarkable success. Incredibly, CEO Simon Coughlin told me that, within the year, Bruichladdich will sell greater volumes of gin than its renowned single malt whisky. And Botanist, just to recall, was launched only in Spring 2011 and wasn’t even the reason Rémy Cointreau came calling. But its distribution power, global scale and marketing muscle have super-charged this Hebridean brand.

“In travel retail,” says Coughlin, “staff can’t keep it on the shelf – the facings will sell out in a single shift.” And all this has been achieved with a focus on the on-trade, specialist independents and top department stores – there’s not a supermarket listing in sight, though, says Coughlin. “They do call us, but that kind of aggressive promotional discounting isn’t right for the brand at this stage.”

AUTHENTICITY

Naturally, he sees the gin renaissance lasting. For him, the right blend of authenticity, hand-crafted heritage, real provenance and quality spirit will sort out the long-term winners.

It’s a view shared by 58 gin’s Marmont, who told me he expects a shake-out over the next three years. “Some have invested too heavily and will find it tough… smaller players will drop out as they need to reinvest – but gin is here to stay”.

That’s a theme picked up by everyone I spoke to – greater consumer engagement and increasing interest in truly different products will keep the market momentum going. While recognising the advantage that has accrued to the early movers, Nicholas Cook at the Gin Guild believes there is room for more, provided new entrants can offer “fantastic product, great marketing and stand-out packaging”, citing new entrants such as Silent Pool, Tarquin’s and Cotswolds as exemplar brands.

He pointed to the near-50 new UK distilleries coming on stream in the past year and the fact that gin is now a £1bn-plus market in the UK alone. Driving growth has been a new acceptance of gin among younger consumers.

According to Mintel, more than two in five (42%) Brits aged 18-34 say they have drunk gin in the past 12 months, a pointed contrast with the over-45s where the figure is just 27%. So much for gin’s fuddy-duddy, golf club image.

It is these younger drinkers that will boost sales of gin to £1.04bn this year, with Britain expected to consume 29 million litres. The sales value has grown from £829m in 2012, with Mintel forecasting it will continuing rising and exceed £1.3bn by 2020.

“Young people are looking for a drink they can call their own,” says Rock Rose gin’s Martin Murray. “Forget hipster culture, young drinkers are personalising their own serves and looking for a point of difference that provides a talking point. We’re even seeing gin collectors beginning to rival the enthusiast single malt collector.”

Rock Rose is about as remote from the cutting-edge cocktail scene as one could imagine, being located in Scotland’s Thurso, just a few miles from John O’Groats. But the tiny distillery, established only in August 2014, is right on the main road so benefits from the newly promoted North Coast 500 route which is now bringing international visitors to Murray’s door.

“We’ve exceeded our initial forecasts five-fold,” he says “and events have now taken a back seat to direct sales from the distillery.”

For the future, Rock Rose will look to offer seasonal, small-batch one-off creations and continue to stress local provenance and the use of unusual locally-foraged botanicals. “So much is about the stories we can tell about our home, the local area and ingredients – even the impact of the weather on the seasonal editions,” says Murray.

So good news all round. But what about the retail trade, confronted by this ever-increasing wave of new gins? For Sara Davis of London’s Oliver Conquest bar (345 gins and counting), it’s all about “the new ones that have a great story and point of difference”.

She holds regular meet-the-maker sessions and adds “for now the excitement lies more with the real small-batch distillers and the more experimental gins, meeting the people who make the gin, like Mark Marmont at 58”. To make space the bar has now gone as far as delisting some more mainstream brands and has worked with the Gin Foundry team to create its own Oliver Conquest gin.

Davis sees no sign of a peak. “I don’t think we have quite hit the top of the wave yet,” she says. “I’m sure that as long as a gin has a true identity and a point of difference, a story and a heart, it will survive the saturation. There are still a hell of a lot of people that are still discovering they like it.”

Personally, I see no sign of gin peaking any time soon. Travelling round the UK, meeting consumers, tasting different gins and the new wave of premium tonics and presenting my 101 Gins book I’ve encountered a huge thirst for knowledge – a willingness to experiment and embrace the new and a feeling that this is gin’s moment. The wave of new products continues to excite and interest the consumer. Of course there will be casualties and some brands won’t make it. Some established brands will need to raise their game to meet the craft challenge.

While selling the second and subsequent bottle in a market that’s increasingly driven by experimentation and novelty won’t be easy for newcomers, sustained, well-differentiated marketing will be essential for long-term survival. But I’m full of hope and optimism.

As Alex Nicol concludes: “It’s a time of innovation and experimentation and barriers are coming down.”

And now, if you will excuse me, my email is filling up. Ping! Ping! Ping!

The gin craze has clearly got some way to go yet.

Ian Buxton's book is available from Birlinn: birlinn.co.uk