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Does London’s Gin Craze Foreshadow A Tandem Trend In The U.S.?

June 2, 2017

In recent decades, drinks trends have tended to emanate from the U.S. market out to other areas of the globe. But the intensity of London’s current vogue for gin has some industry participants wondering whether the next U.S. spirits craze might be a British import.

From 2014 to 2015, some 56 distilleries opened in the U.K.—virtually all of them producing gin. Gin sales are up 21% in the U.K. over the past two years, according to the International Wine & Spirit Centre in London, which has designed a London Gin Trail for tourists with a dozen stops spread between Beefeater’s visitors center and the East London Liquor Co. Amid worries that the domestic market can’t accommodate all these new distilleries, there’s a rush to export: Nearly 12 million cases of English gin were shipped overseas last year. Exports to the United States are up five-fold in the past decade.

“It’s the second coming of gin,” says International Wine & Spirit Centre CEO Miles Beale, noting that Gin and Tonics were the genteel drink of the grandparents of millennials who are now leading the gin charge. “But this time the gin trend is being built around boutique distilleries,” he adds. “The speed of this growth has been extraordinary.”

The City of London Distillery, a combination bar and distillery in London’s financial district, has been producing gin since 2012. Founder Jonathan Clark formerly owned snooker parlors and hotels before learning the art of distilling. He produced 5,000 cases in 2015 and expects that to double to 10,000 cases this year. His Christopher Wren label is already being exported to Canada, where it retails for C$71 ($54). He hopes to land a deal with a U.S. importer soon. “Right now I’m exporting about 10% of what I make,” Clark says. “I want to get that ratio to 70% or more.”

City of London and most other new upstarts hope to emulate the export model pioneered by Sipsmith, the craft distiller that got its start in 2009 in the western district of Chiswick as London’s first new distillery to open in two centuries. Sipsmith began exporting to the United States in 2013 through Wilson Daniels. Late last year, Beam Suntory took a controlling stake in the company, whose 41.6%-abv London dry gin retails at about $40 and is now available in 30 states. The U.S. market accounts for 6% of Sipsmith’s total sales.

“Gin hasn’t fully taken hold in the United States like it has in England, but when it does, we want to be part of the movement,” says Sipsmith cofounder Sam Galsworthy, who expects to spend 20 weeks in the United States this year working on marketing the brand. “Right now, the light has never shone so brightly on gin. It’s captured the imagination and palates of consumers.” Market Watch has more on London’s gin craze, and potential U.S. implications.

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