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Future perspectives for gin - Ginposium 2014

Charles Maxwell

Charles Maxwell (Director & Master Distiller Thames Distillers) was born into a family that has an unbroken connection with gin distilling in London since the late 17th century, when his 8th Great Grandfather was apprenticed to a member of the Worshipful Company of  Distillers.

Charles has worked in the Spirit and Wine industry for over 35 years, the last 15 at the helm of Thames Distillers, a London based independent gin rectifier and bottler which offers a specialist service creating, distilling and bottling gins for its customers.

It has developed over 45 different gins and works in a totally confidential manner with each of its clients. Many of the gins Thames has developed have gone on to win medals in prestigious competitions, such as the IWSC and the ISC.

Telephone: 020 7720 4747
Website: www.thamesdistillers.co.uk

1 Light touch regulation v Quality control

1.1 Current EU regulation
As we have already covered today that for a spirit to be called “GIN” it must:
1 Be made using spirit of agricultural origin
2 Have juniper as its predominant taste and aroma
3 Be at least 37.5% ABV
AND THAT IS IT!

This leaves the field wide open for brand owners and producers to play around in the botanical and natural flavour cupboard to their hearts content.
1.2 Quality control
Given the “light touch” regulation it is quite possible for a low quality product to be produced which can call itself gin and yet bears little resemblance to what most consumers in most markets would recognise as “gin”

The potential for pressure to grow, from various interested parties, over the coming years is definitely there.

2 Excitement / innovation v Pushing boundaries/controversy

2.1 Excitement / innovation
The last 8 to 10 years have seen new life, excitement and innovation come into the Gin market. While packaging and marketing have very important parts to play so does product and production methods.
We have seen:
1 Exotic new botanicals ranging from Pomello, to Damiana, from spices, herbs, new citrus etc.
2 The number of flavours used in various gins, which range from 4 to 47 and beyond.
3 The methods of distillation/rectification are being experimented with and changed, be it cool distillation or vacuum or separate botanical distillations and post event blending.
4 Flavours being added post distillation
5 Different neutral spirits of agricultural origin being used, such as grape and potato.
6 Cask maturation being re-introduced.

2.2 Pushing boundaries/controversy
The inevitable other side to excitement and innovation is controversy and the pushing on
boundaries. Some of the new styles are so lightly flavoured with juniper that it must be questioned if they should
not be called flavoured vodkas. Equally there are some which are so heavily flavoured that the question is “are they not herbal spirits?”

Some spirits called gin almost seem to have been created to cause consumers to ask if they are really gin and so create comment and news. Part of the historic art of building a well-balanced gin was the understanding of the impact of the blending of the essential oils in the still.

Blending individual or portions of distillates post distillation does not do that. But does it make the gin any less
good? Since the advent of the continuous still until very recently, gin distillers/rectifiers had as their goal the production of a totally neutral spirit, yet today some gins are specifically sourcing spirit with some remaining character.

3 New brands v overcrowded market

3.1 New brands
There has been an explosion of new “brands” in the market place over the last few years. Some of these
have come from existing well-established gin brand owners such as Beefeater with Beefeater 24, or Bombay with Bombay East.

William Grant blazed an entirely new way and launched a complete new brand with Hendricks.
Gonzalez followed with London No 1. Then there are the entirely new players in the market, like Martin Miller’s,  G’Vine and Portobello.

What is certainly true is that, because of relatively low costs and easy access to production, while achieving genuine product differentiation, a substantial number of parties from many countries across the globe have been encouraged to try their luck in the revitalised gin market.

More recently, firstly in the USA and latterly in the UK, there has been the rise of the “artisanal distiller”, often producing just a few hundred bottles per batch, while at the same time deliberately setting up to encourage visitors/tourists to actually see the product being produced.

Some of these new brands/entrants are giving their gins professional marketing and sales support, while others have more modest ambitions.

3.2 Overcrowded market
There are now well in excess of 200 gin brands available on the general market and that number is being added to every week, if not every day. Buyers are being approached by prospective new suppliers/brand owners of gin every week.

Total consumption of gin in most of the major markets is not increasing, or certainly not markedly, and as yet none of the major spirit consuming markets which are not currently major gin consumers look like moving to that spirit.
BUT
In nearly all established gin markets, while volumes may not be increasing the value of the sales are markedly on the rise, this is especially true of the USA, Spain and the UK and other markets are showing clear signs of following.

Product differentiation is not just possible but is part of the main story.

Compared to the Vodka market the number of gins on offer is still small
In developed markets consumers are starting to look and want alternatives to established “world brands”
The Tonic market has responded to the increased interest in gin by developing new styles and brands/premium brands.
Enterprising “on trade” outlets also understand that there is the ability to create interest and profit from creating individual gin drinks round different gins and mixers.

4 Consumer interest v Consumer confusion

4.1 Consumer interest
There is today, compared to 10 to 12 years ago, a significantly greater consumer interest and enquiry about gin. This is evidenced by:
– A raft of books on the subject that have been published over the last few years, probably lead by Geraldine Coates and followed by the likes of Simon Difford and others
– The very fact that we are here today participating in the first “Ginposium”
– The fact that scores of new gins have been launched and are finding sales in a competitive market place
– That major retailers have increased the number of gins they have on offer for sale to the consumer by factors of between 4 to 5.

4.2 Consumer confusion
Outside a small number of well informed and read consumers, most remain in almost blissful ignorance of how gin is produced and the rules that apply to its naming and marketing, notably:
– That London Gin is a description of the way a gin is made not of its geographical place of production.
– That Juniper must be the predominant flavour but that after that the gin distiller can make use of what botanicals they wish.
– That there is a significant and noticeable distinction in the flavour delivery of most gins.
– That to create a gin the producer needs to start with a neural spirit of agricultural origin, but that usually that base spirit is not produced by the gin distiller.

5 Spirit sales growth v Concern over alcohol consumption levels

5.1 Spirit sales growth
– Worldwide spirit sales are pretty stable for major markets, with the exceptions of India and Vietnam, where both are experiencing significant growth.
– Gin overall has over the last 3 or 4 years posted some modest growth of around 2 or 3%
– Premium and above category gins have posted growth rates of some 4.5% and
– Super premium gins have grown by some almost 18% in the last five or six years.

Given the above it is clear the dynamics of the market place are changing. Middle and lower priced gins are seeing their sales decline, in some cases quite severely and rapidly.

India, where gin is still perceived as a lower market product, has seen volumes decline by 780,000 c/s in
the last 4 years. In Spain which is the best market in the world per head for premium gins, the indigenous home
produced brands have seen volumes decline by several million cases.

Comparison to that other big world selling white spirit, Vodka, shows that Gin sales still struggle to exceed 10% of that spirit, so the target is huge, and there to be shot at.

5.2 Concern over alcohol consumption levels
From the World Health Organisation (WHO), and the General Medical Council (GMC), to the media in all its forms, Alcohol consumption throughout the developed world is a source of headlines and political lobbying.

For example, go onto the WHO website under alcohol and the first point made is that 3.3 million deaths in 2012 were attributable to alcohol (slightly under 6%).

The next point is that 24.8% of consumption was “homemade illegal production” (with no suggestion that anything homemade could be other than illegal, nor that in the last two years this figure has reduced from 28.6%).

There is increasing pressure throughout the “developed” world for politicians and governments to be seen to be “doing something about” alcohol consumption. Gin, and in particular premium gins are spirit drinks and with a relatively high alcohol content.

In the UK the current focus is on high strength beers and ciders, it will not take many incidents involving the over consumption of spirit based drinks for the spotlight to be turned onto them. At that point the questions will start with regard to the reason and need for the higher strengths and why the industry encourages trial and consumption.

The art will be for the whole drink industry, while maintaining the fun and interest element of gin, to show that the products are carefully crafted to provide a quality naturally flavoured spirit drink for the consumer to enjoy, but to drink wisely and responsibly.