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I ND U S T RY RE PORT
While the Coronavirus Lockdown may have utterly changed everything in the on-trade, not surprisingly off-trade sales have soared. Over the full eight weeks from March the 9th to May the 3rd, purchases of gin in off-licences here showed growth of 38%. What can we expect demand to be like this Autumn? We review the ever-exuberant gin market.
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ith a third of the world’s best-selling cocktails being gin-based, the on-trade should be paying attention to the changing fortunes of the gin sector. While the Coronavirus lockdown may have utterly changed everything in the hospitality trade, not surprisingly off-trade sales have soared. During lockdown it seems that spirits – especially gin and whiskey – gained in popularity. According to Nielsen, over the full eight week period from March the 9th to May the 3rd, purchases of gin in offlicences here were up 38%. And IWSR forecasts whisky and gin to rebound fastest to pre-Covid-19 levels. A further bonus - the EU accounts for 46% of all gin exports from the UK. With it looking increasingly likely that the UK will crash out of the EU without a deal, that leaves a potential export opportunity worth €378 million for Irish-made gins. Richard Corbett is Senior Market Analyst for Ireland, UK and the Nordics at IWSR. “With the on-premise decimated, inevitably, off-premise sales of gin have rocketed within the category” he told Drinks Industry Ireland, “it is however very evident that premium and super premium gins have been outpacing the standard gin segment. This premiumisation process has accelerated since lockdown. “If you’ve not been impacted economically by the crisis, then with no commuting costs and no (or limited) opportunity to spend money eating out or on holidays then
October 2020 | DRINKS INDUSTRY IRELAND
Gin up, stay cheerful disposable incomes have jumped for many. This will have encouraged people to upgrade. “There are also some in the industry that believe that with travel retail sales collapsing some of this volume has come back into the domestic off-trade. “The Summer has also seen the pink gin momentum continue but this time supplemented by the rapid expansion of other flavour alternatives proving popular. “Those drinking gin in Ireland are likely to be more affluent types, between 25 and 40 years-of-age with a bias towards women,” he adds, “It’s hard to retain brand loyalty in the gin market as the variety on offer keeps changing as brands and new flavours appear.”
Gin in Ireland
Around 50 different brands of gin are sold in Ireland. According to the annual report from Drinks Ireland|Spirits, just-published, gin sold 338,500 cases here last year, indicating a sales increase of 4.6% on 2018’s 323,650-case figure. This puts gin’s share of the spirits market at 14.4%, slightly up on 2018. “While it’s unlikely that gin will ever overtake vodka there’s no doubting that gin now offers clear competition as a category in a way that perhaps it didn’t in years gone by,” comments the Head of Drinks Ireland|Spirits Vincent McGovern. Of the total nine-litre case sales figure for 2019, just under one-third (102,300 cases) is distilled ‘locally’ here in Ireland. Obviously the vast
majority comprises imported gin according to IWSR figures. At 55.5% most gins are sold via the off-trade. According to IWSR, gin’s value increased by 3.9% last year. Indeed gin’s volume sales experienced a Category Annual Growth Rate of nearly 25% between 2014 and 2019 and IWSR forecasts volume growth of 0.3% CAGR from 2019 to 2024. But volume sales of local gin in Ireland were down 3.5% in 2019. Nevertheless, value was up 0.2%. Between 2014 and 2019 local gin volumes showed a CAGR of 17.8%. “The data contained in our most recent Spirits Report (for the calendar year 2019) shows that gin sales in Ireland were still growing in 2019 although at a much slower rate than previous years,” commented Vincent McGovern, “That should not be seen as a negative development for the gin market in Ireland - quite the opposite because in line with objectives outlined in the 2018 Irish Gin Strategy the growth in gin sales over the last number of years has been extraordinary. And market share is not going to suddenly evaporate just because growth is returning to - what would be considered in any other spirits category as - more normal levels. From a gin point-of-view the growth of the last five years illustrates quite clearly that there was a consumer desire for gin as a category, the challenge of which producers and brand-owners in Ireland stepped up to meet. “The question now, in these Covid-19 times, is what’s next for the >>
