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Gin’s High End Helps Buoy Struggling Category

December 7, 2015

The gin category has continued to lose ground in the U.S., with volumes shrinking about 5% over the past five years to a total of under 10 million cases, according to Impact Databank. The market’s top 10 brands declined by a collective 1.7% last year, with Pernod Ricard’s Seagram’s Gin (around $12)—the U.S. leader at more than 2 million nine-liter cases—slipping 7.6%. Key players Tanqueray and Beefeater ($20-$25) have also struggled. Among competitively priced gins, E.&J. Gallo’s New Amsterdam has been one of the few brands to show growth.

But premiumization is propelling gin’s higher end, bolstered in part by surging consumer interest in classic cocktails. Bacardi Ltd.’s Bombay brand, in particular, has benefited from the trend, with its higher-end Bombay Sapphire offshoot ($25-$30)—which accounts for the vast majority of the brand’s U.S. sales—still a popular choice for cocktails. Last year, the Bombay franchise was up 3.4%, to more than 1 million nine-liter cases.

Also courting cocktail enthusiasts is Impact “Hot Brand” Hendrick’s (around $30), which continues to rise by double-digits. Known for its rose- and cucumber-forward flavor profile and craft-like cachet, the William Grant & Sons brand has become a favorite among mixologists, and has leveraged its position with several limited-edition, on-trade-only extensions in recent years.

Following Hendrick’s lead, the U.S. is now a hotbed for boutique gin brands, and a bevy of smaller imports are among the market’s fastest-growing players. U.K. brand Greenall’s (around $20), handled by Prestige Wine & Spirits Group in the U.S., has carved out impressive gains recently, as has Reformed Spirit Co.’s Martin Miller’s. France’s Cognac Ferrand is also seeing success for its Citadelle brand ($25), which was up 8.8% to 31,000 cases and added a higher-end Solera-aged Reserve entry ($35) last year. “There’s a real craft movement within gin, and it’s creating interest in the overall category,” says Mark Dawkins, co-founder of super-premium U.K. gin brand Langley’s No. 8 ($38-$40), imported by Terlato Wines.

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