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Gin Gets A Boost At High End From Fast-Rising Hendrick’s

December 1, 2011

Gin continues to struggle in the U.S. market, but there’s excitement at the high end, which is outpacing the category with some impressive brand growth. Driven by William Grant & Sons’ Hendrick’s (roughly $30 a 750-ml.), gin’s ultra-premium tier is rapidly expanding from a small base. “We’re seeing some really positive things, especially when we talk about the upscale gin segment,” says Paco Recuero, global brand director, gin category, Pernod Ricard, which owns Beefeater ($15) and Plymouth ($26) gins. “That segment has been growing by about 5%. It’s small volume, but it does mean that something good is happening in the category.”

While gin hasn’t embraced flavors as aggressively as vodka or rum, the category has evolved considerably in recent years. Although the classic “London Dry” style—a very juniper-forward liquid—was long the standard, the emergence of more “fruit-forward” gins such as Hendrick’s has expanded the category’s appeal. Jo Birkitt, brand manager for Hendrick’s gin at William Grant & Sons sees the traditional London Dry style as not being accessible enough. “When you’ve got a very versatile and smooth gin, almost fruity in that it has the right botanical mix, it’s a much easier transition for people who are drinking other premium white spirits,” she says.

Hendrick’s, a cucumber-and-rose-infused gin, has in fact been gin’s most dynamic performer of late, as its unique style and ultra-premium price point have pushed the category’s boundaries. After earning an Impact “Hot Prospect” award following a 36.5% jump to 101,000 cases in the U.S. market in 2010, Hendrick’s has maintained its upward momentum this year. For the 52 weeks ending October 30, 2011, the William Grant brand’s dollar sales rose by 33.3% in the food and drug store channel, according to SymphonyIRI.

Lower down the pricing scale, another strong performer has been E.&J. Gallo’s New Amsterdam gin ($10). After a promising debut in 2007, when it sold roughly 100,000 cases, New Amsterdam has continued to surge in the U.S. market. Last year, the brand grew by 10% to 580,000 cases, winning an Impact “Hot Brand” award. For the 52 weeks ending October 30, 2011, New Amsterdam’s dollar sales in the food and drug channel are up by 9.3%. The Gallo brand has fared so well that, in recent weeks, Gallo expanded the New Amsterdam franchise with a vodka entry. When vodka is borrowing from gin’s recipe for success, that’s a promising sign.

Leading Gin Brands
in Food/Drug Stores

(52 weeks ending October 30, 2011)
9-Liter Case
Brand Company Dollar
Sales*
(millions)
Percent
Change
Volume*
(thousands)
Percent
Change
Average
Price per
750ml
Tanqueray Diageo North America $24.8 -3.2% 120 -4.4% $17.17
Seagram’s Pernod Ricard USA $24.5 -2.3% 247 -1.0% $8.26
Bombay Bacardi USA Inc $17.1 0.6% 78 -1.0% $18.11
Gordon’s Diageo North America $12.2 -8.1% 135 -11.4% $7.50
Beefeater Pernod Ricard USA $8.5 -1.8% 48 -1.7% $14.73
New Amsterdam E. & J. Distillers $8.4 9.3% 69 10.9% $10.15
Gilbey’s Beam Inc $5.4 -6.2% 63 -6.6% $7.18
Fleischmann’s Sazerac Co $2.7 -6.3% 36 -5.7% $6.28
Hendricks Wlliam Grant & Sons $1.8 33.3% 5 31.9% $30.69
Total Leading Brands $105.3 -1.8% 801 -3.1% $10.95
*addition of columns may not agree due to rounding 

Source: SymphonyIRI Group

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