10 minute read
Just the tonic
It’s exciting times for the premium gin category with lots of new brands and very strong growth. Andy Young takes a detailed look at what’s happening with gin and how retailers can make the most of the boom.
The big difficulty with a category like premium gin is where do you start? There is such mammoth growth happening at the moment, it’s sometimes hard to know where exactly to look. That growth is coming in many different areas: value, volume and the number of brands entering the category are all on the rise, this is one category that retailers really need to be making the most of.
The Australian Liquor Stores Association and IRI State of the Industry Report, put the gin category’s value growth at 17.4 per cent year-on-year for 2017, that’s off the back of a 16.4 per cent increase the year before. There was also a 23 per cent increase in gin products in 2017, and the report said that “gin’s worldwide resurgence is being propelled by an explosion of boutique offerings produced with local (alternative) botanicals”.
But premium gin is about much more than just local botanicals, and with occasion-based shopping being a major factor in current consumer behaviours, Peter Hollands, Bombay Sapphire Brand Ambassador with Bacardi-Martini Australia, highlights that there are other factors driving the growth in premium gin right now.
Bombay Sapphire with thyme
THE GREAT ALL-ROUNDER
“Gin is an all-occasion drink,” Hollands says. “Especially with the huge range allowing gin drinkers to peruse a back-bar, or shelf, in the same way as a whisky drinker might. Looking forward I believe people will cut through the amount of choice by either selecting a well-known, trusted brands such as Bombay Sapphire or go super niche and local.”
Greg Kiss, with Luxe Wine & Spirits, agrees that the all-occasion nature of gin has been a big factor in its strong growth.
Blind Tiger Gin
“There is now basically a gin flavour profile/botanical mix that suits pretty much every palette. You have gins with minimal botanicals such as Death’s Door out to of Wisconsin with three botanicals (juniper, coriander seed and fennel) to gins such as Ferdinand’s Gin (30 botanicals) and Monkey 47 (47 botanicals), both out of Germany.”
While occasion-based shopping is one of the recognisable trends in the Australian drinks sector at the moment, the other major trend that has been part of the industry for a number of years now is premiumisation. This is something that has been happening not just in Australia, but around the world, and as Kiran Linaker, Brand Manager for Hendrick’s points out, premiumisation is a massive factor in the growth of premium gin.
You can even put pear and star anise into your gin.
“The fact that people are drinking less but drinking better is one of the things that has definitely helped the premium gin category to grow,” Linaker says. “Premiumisation is huge across all categories and the craft category is doing some amazing things and this is an exciting time for super-premium in the industry at the moment.
“Gin is one of those things that has probably been under-developed in the past; up until a few years ago we had just a few key players and now there are hundreds brands. We are seeing people have a lot of fun with the gins they are creating, we’re seeing some amazing Australian gins and we are seeing international gins come through now as well.”
THE CLASSIC SERVE
The other appeal for gin is that while the liquid itself can be complex and multifaceted, the way that it is served, can be relatively straight-forward, or it can be used in a complex cocktail. As Jodi McLeod, Gin Marketing Manager with Diageo Australia points out, this helps make gin increasingly popular to those drinking gin at home, whatever their mixing skill level.
“Drinking spirits at home can be off-putting for some consumers who see it as too complicated or intimidating, they’re not sure how to DIY spirits and cocktails at home but the classic gin and tonic is something everyone can feel confident in making. For others, they love gin because you can mix it and garnish it in so many ways so it appeals to both types of consumer.
“Gin also offers great complexity. There’s so much to discover with gin and each brand’s botanical mix which drives continued interest and curiosity in the category in a way that other spirits can’t. This complexity is a main driver of gin’s premium credentials, it’s a grown up spirit that screams sophistication.”
Elephant Gin with apples for a garnish
With that in mind, the question then arises as to whether the gin and tonic is still the classic serve, or is there a changing of the guard?
The general consensus is that while there are other serving suggestions cropping up, the gin and tonic is here to stay, it is and will remain the classic serve.
Linaker says, “For Hendrick’s, we don’t really think that the gin and tonic will ever be replaced for us. It is absolutely iconic, it’s what we built our brand on. There are a lot of the craft brands at the moment that are building their signature serves with different garnishes at the moment, but I just don’t think that the classic nature of the g&t is something that will change throughout the industry.”
People are learning to have more fun with their gin serves
Matt Redin, Marketing Manager with Angove Wines, who import and distribute Drumshando Irish Gin, adds that tonic is still tops, but retailers do have to consider which mixers they stock if they want to be taken seriously by their consumers in terms of premium gin.
“The gin and tonic is still king, there is no denying it,” says Redin. “Negronis and a few others are out there, but there’s just no way they are as prevalent as g&t. But retailers should remember if they are going to sell good, premium gin and get consumers coming back for more then they need to be stocking good tonic as well.”
MAKING THE MOST OF GIN
One of the real positives about speaking with different suppliers and producers about the premium gin category in Australia’s packaged liquor market, is the support they emphasise for retailers. They also recognise the amazing work many retailers have done in making the most of this trend, helping it to grow and they want to continue helping retailers to make the most of the gin boom.
As Hollands explains, “Frankly I believe retailers are doing a fantastic job. I’ve hosted a number of in-store trainings and I’m always amazed by the knowledge and interest shown by staff.”
He adds what he thinks is key for retailers being successful in the premium gin category.
“Good staff training is an absolute must. In my opinion, knowledgeable, interested staff members are worth their weight in gold (or gin). Secondly, talk to your customers, don’t stop at selling a bottle, find out how they plan to drink it. Look for trends in their area/ demographic and then highlight brand activations that align to your consumers.”
Linaker agrees that training and education are key, “It would be great for retailers to understand that consumers are willing to pay more especially within the premium gin category and provide the consumer with a solution. I think that there are things we can work on with retailers to assist growth and one thing that I would like to do more of is education within the gin category.
The classic Hendrick’s serve with tonic and cucumber
“A lot of what we have seen is that many consumers don’t really know the difference between gins, they are buying a lot on labels and not really understanding why gins are different or even why gin is different to vodka. So I think that education piece could be quite interesting longterm, in working out how to continue the category’s growth and then sustain it.”
She adds, “Retailers can definitely look to get more creative in-store and create some more drama around the premium gin category to help engage consumers more. There’s scope for working with those brands who can support retailers in getting creative and engaging with consumers.”
Kiss also suggests that as well as education, independent retailers are in a good position to up sell if they are mindful of who their consumers are. “Smaller independents who really know their customer base are in a really good position to up sell,” he explains. “For example, if they know a customer has come in a few weeks ago and bought a certain gin, they are in a great position to say to them ‘hey, I remember you got this a few weeks ago, how about you try this one?’
Tanqueray served with tonic and orange peel
“Also, having the product knowledge about the premium gins enables easier upselling, being able to illustrate to the customer why this gin is worth $10-20 more than other one.”
It’s a similar message from Diageo Australia, with McLeod saying, “The category is going to continue to grow and consumers are willing to pay more to experiment but we need to educate them on what makes a gin worth paying for and the benchmarks in the category.
“We can help you build your staff’s knowledge of gin, the original London dry as the core of gin and where all gin drinkers should start, the flavour segment for a bit of fun and more experimental flavour expressions for those who want to expand their gin knowledge.”
ADVICE FOR RETAILERS
Premium gin is without doubt one of the most exciting categories in Australia right now. Unlike some other categories like whisky, Champagne and even some wines, gin doesn’t have the same rigid production criteria, which is why producers are having so much fun and such a wide variety of gins are available. So, what does this mean for retailers? Nikki Daven, Brand Manager at SouthTrade International, says, “Merchandising and crossselling with premium mixers is a great way to inspire consumers already invested in the category to try premium gin.
“The trade-up trend will continue particularly with gin in the lead up to summer with consumers looking at flavour profile and pairing with other quality products. Opportunity to upsell and bundle with premium mixers will be a growth driver for retailers.”
Redin adds this advice, “Keep rotating your range just to keep it interesting. At the moment the consumers drinking these premium gins they are exploring and from what we can see, they don’t seem to have a set repertoire of brands that they go back to. But that bit of education and research is also really important, understand the brands, get to know them, their support and their story.”
Both McLeod and Redin have touched on experimentation and exploration being a part of the gin drinker’s psyche and Linaker agrees, adding, “We know that people are trading up from the value category and we are seeing this more and more. The traditional gin drinker is changing, so with consumers no longer buying based on price there are these opportunities for retailers. Out of all the categories, gin is one of the least planned purchases; consumers know that they are going to buy a bottle of gin, but have no idea which one they are going to take off the shelf. So if retailers can engage consumers when they come into their store either through tastings or education at shelf, I think that is the best way to get consumers to trade up.”
Grapefruit serve with bottle of Gunpowder Irish Gin
Kiss, keeps it simple, advising, “Know and taste your products. Seek out good quality gins from all corners of the world, people will want to try them.”
While the gin boom is relatively new, whisky has been going for a long time, and Hollands encourages retailers to think about that category when thinking about how to work with premium gins.
“Treat premium gins like whiskies,” he says. “There are a lot of people out there who are ready to invest in good quality gins. And the best thing is, they will actually drink them and then come back and buy some more.”
With so much excitement happening across the gin category, it can sometimes be difficult to be certain you are on the right path, but consumers are also exploring the category, learning about it and trying to understand it. The suppliers are keen to help with the education and support piece so the opportunity is absolutely there to jump on the gin train and make the most of this category’s on-going growth.
