1: The Gin Market - A Global Picture
The gin market has stabilised somewhat in several of the countries previously hit by the economic down turn and some growth has been achieved in these in premium products. While it was countries such Brazil, Russia, India and China that saw growth whilst Western countries had more straightened circumstances, it is now these economies that are facing slower growth. The following offers a broad sketch of some markets of interest: further information and trade data is available on application.
Global gin volumes down but super premiums grow
The IWSR has estimated that 2011 global gin sales which add up to approximately 46 million nine-litre cases by volume [Source: The International Wine & Spirit Record (The IWSR)] were down marginally by volume on 2010. Premium brands (often imported) have more than survived in most markets whilst it has continued to be the local products at the value end - which comprise nearly 80% of world sales that have diminished. More recently, Euromonitor have estimated World gin sales in 2012 were 274.8 million litres which reflected a growth of +0.4% from 2011. While these figures are difficult to relate one to the other and have a bracket of error about them, they tend to illustrate trends.
The Philippines is the world's largest gin market. The spirits market comprises nearly 50 million cases and is dominated by domestically produced spirits (98%). The Gin market, in which San Miguel is by far the largest brand, is 22M cases (62% of the market) but this is very approximate. In global terms, Philippine gin accounts for some 43% of the world gin market. Imported gins account for a miniscule proportion of the market but some UK owned gin brands are produced locally.
If you take out the unique situation in the Philippines, the US it is the largest gin market and is by far the biggest export market for UK produced gin by volume (37 Million LPA worth £135 Million fob in 2013). Additionally, a large volume of UK label gin is produced in the USA. In total, 10.3 million 9-litre cases of gin were sold in the United States in 2013 with sales value of $866 million according to the Distilled Spirits Council of the United States (DISCUS). This compares with 11.2 million 9-litre cases of gin sold in 2006, generating over $908 million.
Total gin sales in USA were down 3.8% and 0.6% by value in 2013 compared to 2012 according to DISCUS, these figures being not yet back to pre-recession peaks. For example, total volume sales in 2013 were still approx. 8% down on 2009. These remarks are not true though for high end premium gins which have held up, occupy 20% of the sector and showed 5% growth in 2013 by volume. Against that, Value brands which take nearly 66% of the market showed a further drop in 2013 and their sales are still 1247 9-ltre cases down on their 2009 peak of 8,102,000 9-litre cases. Put another way, 2012 sales of Value brands were some 18% down in 2013 compared to 2009.
As regards imported gins, the U.S. market imported around 3.6 million cases of gin in 2012, nearly all bottled gin from the UK. Interestingly, Gin imported from UK rose 18% by customs value and 22% by volume in the year to June 2013 to $27M and 719,000 proof gallons but this was small in comparison with Scotch whisky imports which grew 28% in Customs value in the same period to $96M and by 12% by volume to 1,406,000 proof gallons. French brandy (including cognac) grew 49% by value and 26% by volume in those twelve months to $67M and 726,000 proof gallons.
Overall gin volumes in Canada increased 1.67% according to Spirits Canada to 773,278 9-litre cases). This confirmed the previous year's renaissance of the category following the previous three years of volume decline. Gin grew its market share to 4.43% of overall national Spirits volumes (excluding spirits-based RTD/coolers). Imported Gins represented 66% of volume, with domestically produced Gins representing 34%.
Elsewhere in the Americas
Drinks Business has reported that Latin America is gradually surfacing as a key market although the trend is still in its infancy in the region.
Gin sales have retained their newfound healthy trajectory in Western Europe according to Drinks Business. Spain is the largest Gin market in the EU and third largest in the world but where overall gin sales volumes have dropped according to IWSR from 3.6M 9-litre cases in 2005 to 3.1 in 2010 but then in 2011 it rose marginally to 3.2M. These figures hide the fact that (a) the gin market is dominated by domestic brands, which account for some 75% of sales; (b) a number of new gins have been launched in the market and (c) performance has varied markedly from growth in some brands to slow decrease in others. Any comment must be caveated by the economic situation. The super-premium gin sector has now seen positive developments. As one example, UK exports of gin - nearly all premium or above - have increased by 24% in value from 2008 to £85.6 Million in 2012 by customs value.
The UK is the principal land for gin as well as whisky and the UK is the home of London gin. Second, the UK is the largest exporter of gin in the world with approximately 70% of UK production worth £373M going overseas to some 139 countries around the world. As for sales in UK, the Wine and Spirit Trade Association (WSTA) Market Report has indicated that Gin has bucked a decline in overall UK alcohol sales in the last year to post a 2% rise in volumes and 8% value increase in the 12 months to the end of July 2012. They show a 6% increase in the five years to 2012. According to Euromonitor International's latest research, however, gin volumes saw growth of 0.4% in 2012, finally crossing into positive territory after years of stagnation.
Strong economic growth and rising incomes spurred liquor demand for a large part of the 2000s with distillers enjoying volume growth of over 10% every year. However, more recently liquor volume growth has fallen sharply for the three years to September 2013. Turning to gin sales in India, these stand at approx. 2.5 million cases - about 1% of the total spirits market -according to the IWSR. Within that figure, Indian produced Standard and Economy brands dominate the market in volume terms. Euromonitor has commented that the gin category has not seen a transition of the consumer from local specialities to branded products. One report has shown that gin sales fell in volume terms to -3.6%. in 2011-12 but another indicated that annual growth had just reduced to +2%. More recently, a comment has been received that the market in general for alcobev products is still growing and that the gin market have returned to show an upward trend in 2013 with an increase of 30,000 cases. Imports account for only approx. 1% of total gin sales by volume (27,000 cases in 2012 and a forecast for 2013 of 31,500 cases according to IWSR). This is not surprising given that some multinational companies produce their Western gin brands in India; because of where gin stands in pricing terms; and the high level of tariffs and taxes experienced in some states. Precise figures are difficult as shipments are not necessarily made direct from UK to India but via various ports and warehousing hubs. Imported premium gins have generally proceeded well though.
Although the scale of opportunity is huge in China, the gin market is still nascent and reported as showing only slight growth in recent years from a small base. After efforts to develop the gin cocktail culture, one company has reported that there is some real cocktail based interest reported in Shanghai, Chengdu, Guangzhou and Beijing. Another company has reported that volume-wise, the Chinese bought almost 600,000 bottles of gin in 2006, and that figure is set to double by 2014. Precise export figures are difficult as shipments are not all made direct from UK to China but via various ports and warehousing hubs such as Singapore.
Trade data is available on application but as an example, gin which comprises 4.7% of the total spirits market in South Africa, has seen 1% growth there in 2013 compared to the previous 12 months. At least one major UK label gin is produced in country.
Larger gin producer companies in the world
- San Miguel is produced in the Philippines. Accounts for c.27% of global sales.
- Diageo is the second largest producer and owner of brands such as Tanqueray and Gordons. Their premium gins are distilled at Cameron Bridge in Scotland whereas others are produced in a number of countries around the world including India and USA.
- Pernod Ricard. Third largest producer. Owners of Beefeater gin, distilled at Kennington in London. They also own Seagram's gin in USA that is distilled at Lawrenceburg, Indiana; and Cork Dry gin in Ireland.
- Beam Global of USA have Larios gin, which is produced at Malaga in Spain.
- G & J Greenall distil their own and contract brands at Warrington, Cheshire, in England.
- Macdowells (part of United Spirits) , owners of Blue Riband gin, is one of a number of gin producers in India. Their Ponda Distillery is in Goa.