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Hendrick’s Leads The Way As Gin Premiumizes In The U.S.

November 30, 2018

While overall volume in the U.S. gin category continues to decline, super-premium-and-above brands are having success as consumers move up the pricing ladder.

Marketers are increasingly promoting higher-end brands in the category, which may point to a future of fewer cases but higher margins.

The total U.S. gin market declined by 2.5% to 9.3 million cases last year, and has lost about 600,000 cases since 2013, according to Impact Databank. But that snapshot misses the improvement of the higher tiers. William Grant & Sons’ Hendrick’s is leading the charge at the $25-and-up level. In the U.S., the brand has more than tripled since 2010—when it was 110,000 cases—and last year grew 8.5% to 370,000 cases. Hendrick’s senior brand manager Paige Parness says that the label’s double-digit growth is continuing this year. Next month, Hendrick’s will launch Orbium, a small-batch brand offshoot made with quinine, wormwood, and lotus blossom, in the U.S. for a limited time. In October, William Grant & Sons announced that it’s investing $17 million to double capacity at Hendrick’s Girvan, Scotland distillery.

Diageo-owned Tanqueray, retailing in the $20-$25 range, has also been expanding in the U.S., posting growth each of the past three years to reach 1.33 million cases. Diageo recently announced a new “Unmistakably Tanqueray” global push, which will support the brand with a multi-million dollar outlay. Tanqueray is also active at the above-$25 tier with its higher-priced No. Ten label, which sells about 35,000 cases in the U.S.

Bombay Sapphire, part of the Bacardi portfolio, slipped by 5% in the U.S. last year, but the brand has been on a strong run over the longer term, expanding by 44% since 2010, and is now above 900,000 cases. “Bombay Sapphire continues to see success in North America, growing market share against our key competitors and continuing to recruit new consumers to the gin category,” says Tom Spaven, Bombay Sapphire’s brand director for North America.

Other brands on the rise at gin’s above-$20 level include Proximo’s Boodles, which is at around 60,000 cases—up from 13,000 cases in 2010—and Pernod Ricard’s Plymouth, which was up 8.6% to 35,000 cases last year. While Pernod’s Beefeater brand has declined by low single-digits lately, the company sees potential for its recent Beefeater Pink offshoot to gain traction with its millennial target demographic, both in the U.S. and other key markets. Meanwhile, premium gins like Martin Miller’s and Citadelle have also been rising from small bases, with both reaching 35,000 cases last year. And newer competitors, like Malfy ($30) from Biggar and Leith—which recently released a pink Gin Rosa and a blood-orange Con Arancia expression—are also targeting the category’s higher price tiers.—Shane English

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