Gin growth slowing in established markets

Signs of the gin growth reaching its peak in traditional markets.

The latest IWSR Drinks Market Analysis data reveals the UK and Spain have reached 'peak gin' with volume consumption plateauing. Meanwhile, flavour diversification is a significant trend driving gin, particularly with established brands, while locally produced premium gins exploit opportunities in non-traditional gin markets such as India and Brazil.

According to IWSR forecasts, global volumes of standard-and-above priced gins are poised to grow at a CAGR of +5% between 2021 and 2026. Volume growth in the three largest gin markets of the US, UK and Spain will slow; however, solid gains are expected in other top 20 markets. IWSR expects double-digit CAGR volume growth in markets including Canada, Japan, South Africa and India from 2021 to 2026, alongside CAGR volume growth of just under 10% in markets such as Italy, Brazil and Australia.

The gin boom began in the UK and Spain, and while the UK remains the most valuable gin market in the world, both have passed their peak. Volumes in 2021 remained below pre-pandemic in 2019, including total gin and for standard-and-above price bands.

The UK gin market reached a turning point in 2021, when volumes declined for the first time in a decade despite the continued momentum behind flavoured products, with consumers migrating into other flavoured products, including vodkas. The total UK gin market is forecast by the IWSR to decline at a CAGR of -4% between 2021 and 2026.

Despite these predictions, the UK and Spain will remain important sources of value for brand owners, and both will continue to set the trends for product innovation such as flavours, ‘pink’ gins, gin liqueurs, no/low products and RTDs for other markets to follow. In the meantime, brand owners will look to other markets for blue sky growth.

“While established gin markets have seen category growth starting to peak, there are a number of other non-traditional markets that are seeing gains. The ongoing recovery of the key on-trade channel post-Covid has reinforced previously emerging tailwinds for gin in these markets,” notes Jose Luis Hermoso, research director at IWSR.

“Moving forward, I see two main areas competing in the major consumer trends relating to gin,” says Campari Group CMO Julka Villa. “On the one hand, we have the timeless London Dry Gin segment where brand image is still among the most important credentials … on the other hand, we see the growing importance of regional/local brands that draw their strength from the close link with the territory, and local craftsmanship.”