By Arthur Cohen
For the last few years, as a new generation of American consumers has discovered the civilized pleasure of a well-made cocktail, prepared to order by a professional bartender, the Martini has been everywhere. But with all the Vodkatinis, Chocolatinis, Appletinis, and Whatevertinis, it seemed that the traditional Martini, made with gin and dry vermouth hadn’t been invited to the party. At long last that seems to be changing, at least to some degree.
When looked at in its entirety, the gin category enjoyed a slight upturn in consumption last year. But to look at things strictly in those terms would be a mistake, particularly when addressing the on-premise market. The 11.1 million case gin category is not one monolithic entity, but is actually composed of two important segments whose performance has been diametrically opposed over the last few years. The domestic gin segment, with brands like Seagram’s, Gordon’s and Gilbey’s, accounts for 73% of all gin consumption and has been declining at a pretty steady rate for more than a decade. A number of domestic brands do have a strong position in the marketplace, but continued declines have hurt them overall. Seagram’s for example has led the category for as far back as anyone can remember. It continues to do so and despite a slight decline last year the brand had a total volume of 2.9 million cases and one-quarter of all gin consumption. However, ten years earlier, the brand had a million cases more in volume and a market share of 29%.
On the other hand, for the last five years while the total category has declined just the opposite has been true for imported brands. Collectively this group, which includes Tanqueray, Beefeater and Bombay among others, collectively increased volume by more than 6.5% last year to a total of 2.9 million cases.
In many categories, it is high-priced, high-image brands (think imported vodka or cognac) that have shown growth in recent years. This is particularly true in a bar or restaurant environment where brands as badges of identity and the desire for an affordable luxury intersect.
Tanqueray, the leading import and second-largest gin brand overall, continues to steamroll along picking up a 2.4% increase in volume last year to 1.4 million cases. Number two import Beefeater remained stalled at 645,000 cases for the third straight year, although Allied Domecq has embarked on a number of initiatives intended to contemporize the brand. The most dynamic growth, both in actual cases and relative percentage belongs to Bombay Sapphire which picked up 95,000 additional cases (+26.4%) to hit a total of 455,000. Original Bombay also registered modest growth (+3%) to 170,000 cases.
One of the indicators that the gin category is not a moribund as might be thought from a quick glance at the statistics, is the number of new brands that have entered the market in the last few years. Not content with simply holding the number one import slot, Tanqueray has attempted to expand the franchise with line extensions–Tanqueray Malacca in 1998 and last year, Tanqueray No.10. Other recent additions to the gin category include both domestic (Dirty Olive Gin, Cascade Mountain and Desert Juniper) and imported (Bafferts and Quintessential from the United Kingdom, Vincent Gin and Leyden Dry Gin, both from the Netherlands).
The case for these new brands is analagous to that of single malt Scotch, superpremium bourbon or to a lesser degree, imported vodka, where suppliers introduce new, high-prestige, high-profit brands and are willing to slowly build an audience. There may not be a tremendous volume at first, but what volume there is offers a great return.
A case in point would be Bafferts Gin. The brand was created with the vodka drinker in mind. After seeing all the Martini action being grabbed by high-end vodkas, Bob Reider, president of Bishop Wines & Spirits, thought it would be a good idea to create a gin that would appeal to the same consumer. As he explained it the gin has a mild juniper character with additional flavoring from coriander, orange peel and lemon peel and is triple-distilled to make it even smoother. Although Reider was a force behind the success of Belvedere Vodka, he knows that with many new products, success comes slowly.
“We see it as a brand that will be built drink-by-drink, bottle-by-bottle,” explained Bob Reider, president of Bishop Wines & Spirits and the man behind the brand’s creation.
For newer brands the task at hand is capturing an audience. For the more established ones, it’s a matter of making a brand that seems to have been around forever relevant to today’s young adult. For Tanqueray and Beefeater this has meant advertising that stresses the brands’ English heritage but in a way that makes them seem young and hip. For Bombay Sapphire it’s been more a matter of focusing on the Martini in a way that mixes classic elegance with ultra-modern glassware.
Whatever approach is taken though, it’s obvious that suppliers are putting some muscle behind the category. Overall advertising spending on the gin category increased by more than $6.5 million last year as total expenditures reached $26.8 million. Bombay Sapphire, as has been the case for the last three years, was the largest gin advertiser with a total outlay of $8.8 million, primarily on magazine back covers. Tanqueray on the other hand boosted its own spending by $4 million (+97% to $8.2 million) giving it a much larger share of the category’s advertising voice. Beefeater also jumped back on the advertising bandwagon last year with more than $6 million in ad expenditures after having been invisible in 1999.
Over the next few years the total gin category is expected to contract slightly although volume increases are likely to continue for high-priced, high-style imports.
Why Gin Isn’t Vodka
The most important thing to remember about Gin is that it is a flavored spirit. Without the flavorings it would be vodka and like most vodkas it starts with a mash of fermented grain which is distilled into grain alcohol. (Historically, while the Irish and Scotch had been distilling grain for hundreds of years before gin’s debut in the 17th century, gin was the first spirit type to use unaged grain alcohol as its base.) After the initial distillation, the resulting alcohol is then re-distilled along with the various flavoring agents.
The primary flavoring agent, the one used by all producers is the juniper berry. (The word gin is derived from genever, French for juniper.) Each brand of gin has its own proprietary and closely-guarded recipe for what makes an ideal gin. But gin is truly an international spirit with ingredients such as cardamom from Sri Lanka, cassia bark from Vietnam, orange peel from Spain, coriander seed from the Czech Republic, angelica root from Germany. The number of botanicals used varies from producer to producer. Tanqueray 10 for example, draws its name from the fact that ten botanicals are used. Another thing to remember about gin is that the phrase London Dry Gin refers to the style, not the place of origin. There are currently only two gin brands distilled within the city of London (Beefeater and Bafferts).