The ‘gin boom’ or ‘gin bubble’ have been colloquial terms for the staggering growth of the UK gin market this side of the Millennium. However, with rising costs and high tax, combined with consumer fatigue, it appears that the bubble has burst as big brands lead a slump in sales.
Gordon’s, the UK’s stalwart gin, is the headline decline in value sales. The Diageo brand saw the biggest decline of any alcohol brand in the off-trade, with a £72.8m loss, according to NIQ 52 w/e 22 April 2023. But it’s not the only big brand experiencing a decline – Whitley Neill, Bombay Sapphire and Tanqueray between them saw a £33.9m loss.
At the other end of the spectrum is Porter’s Gin, founded in 2012, which sits in the craft sub-section of the market, and co-founder Alex Lawrence Milia believes too much variety is the main culprit. “End of the gin boom? Maybe. Declining sales in the UK are certain but let’s face it, the market saturation was frankly ridiculous,” says Lawrence Milia. “This contraction in the category was inevitable and doesn’t necessarily reflect the category’s performance, but most definitely the consumer’s declining interest in overwhelming choice. It’s also not easy to start or sustain a gin brand anymore – everyone was doing it with little effort 10 years ago.
“Now manufacturing both liquid and packaging is a logistical nightmare, duty is going up, margins are razor thin and no small brands have the design, marketing or PR budget to compete with the more established players.
“So harder conditions, less of an audience and the gimmicks finally dying have all contributed to a shrinking category. Unfortunately it’s just natural selection in full swing,” Lawrence Milia adds.
Launched at a similar time, Masons of Yorkshire is a brand with a growing portfolio of gins and vodkas while also contract distilling for supermarket brands. Masons has been a part of the boom and grew with it. Co-founder Karl Mason says the brand has “the capacity to grow, but growth is a bit hard at the moment. [The market] is definitely going down, but hopefully with that there will be companies like us that can keep our volume level, because smaller companies that haven’t got multiple roots to market will disappear. Three have gone bust in the last four months that I know of, big ones”.
Flavour profiles
Lawrence Milia says that Porter’s success is down to the brand working with one person on payroll while it “invested significantly in design on shelf and a solidified set of flavour profiles that add value to the category”. He adds: “Porter’s is lucky enough to be in the green but managing cash flow for production loses us all a lot of sleep. If it wasn’t for our passionate distributors in export markets, we wouldn't still be here. We’re looking forward to growing the brand in other markets and supporting our loyal customers in the UK.”
But what are the next steps? Mason says he would “love to say yes to moving more into vodka, but it will never be as interesting or exciting for me as gin”. He adds: “It’s just finding the resources to devote time, and the bigger your product range the more money you need, and at the moment it’s more about tightening your belts. So we’ve just got to focus as much as we can on what moves and what’s happening. We’re being more reactive and proactive”.
For the category as a whole, we’re likely to see a lot more brands disappear from the market. Gin fatigue is reality in the UK but the more established craft labels, which are surviving current financial turbulence, will endure alongside the major players – albeit with a larger market share but without the luxury of the once booming sales growth.
