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Drinks and licensed trade research
from the experts at Cardinal.


Ten years ago we would often say that drinks categories didn’t change much in role and definition. The ale category, in particular, moved with a glacial pace. Lager was more or less standard or premium and largely undifferentiated. Those two statements couldn’t be further from the truth now. The ale and lager category has completely reinvented itself in product and brand terms prompted by all things craft. Gin is now going through a similar process and in the same way that beer has fragmented, so too will gin continue to segment and sub divide. Perhaps this will be akin to cider, where it ceases to be really gin at all and the category morphs from its rather narrow origins.
Within the gin category we’re seeing aged gin, pink gin, gin brand collaborations, terroir (made with locally specified ingredients), hyper-local distilled gins and more exotic global provenance gins, to name a few developments. Lobster gin is currently grabbing drinkers’ attention for the wrong reasons because it uses real lobsters. As if being boiled alive wasn’t bad enough.

Consumer tastes evolve with the category as they demand more and more sophisticated offerings. On the plus side for drinks producers and retailers, consumers are willing to spend more on their drinks as they seek new experiences and dig deeper in to what they’re drinking. On the downside, experimentation becomes normal and brand loyalty scarce.
An opportunity for retailers

Gin provides an example of a great opportunity for restaurants to drive wet sales. More typically associated with aperitif moments it is by no means limited to them. When putting together a range, taste is the most important variable, often more so than price, despite what consumers claim on our surveys. Novelty gins scorned by connoisseurs can be lot of fun and consumer buy experiences above all else.

Brands and enticing propositions are crucial. Having a mix of more established brands for category newcomers or more traditional drinkers, and some lesser known, more unusual gins, for those that are more adventurous, is likely to be a winning formula. We’d recommend fully differentiating the serve (glassware, specific garnish) so a careful decision is properly rewarded. Branded serves are also well worth considering, our recent research showed that 38% of people would be more likely to buy a cocktail if it was branded – and that can extend to glassware.
The importance of local brands

Now, more than ever, provenance is an important factor. Much of the mystification and romanticising of drinks has been helped along by smaller companies who are passionate about creating a ‘real’ product with a genuine story to tell. Smaller producers, perhaps less inhibited by corporate strictures, have capitalised on their successes by opening up their own bars, slipping easily in to pop up bar culture and festival life.

The East London Liquor Company is a good example of a challenger brand with its hyper-local offering. It distributes to a variety of local bars but also serves its own alcohol at the distillery. Bars in breweries, and breweries in bars, have done particularly well over recent years, and now it’s the turn of small distilleries.

So localism grips and becomes a popular anti-stance which in some parts of the country is now nearly normal. Consumers look to get closer to the point of production for environmental and ethical reasons and simply support local businesses to which a face can be put to the name. We know this is not happening everywhere and the reaction of larger corporates to these trends can shape how behaviour evolves further in to the mainstream mass.

Global distillers have already responded by investing in emerging, small-scale brands that they think have potential. Likewise they will develop their own brands in ways that ape new category message norms, using the craft term to the point of it becoming almost meaningless. The local aspect of a brand’s equity fades away in these developments, a space which will most likely always be the preserve of the smaller producer and that’s fine because there is space for all. But overall, diversity continues and gin, amoeba like, looks set to continue to morph the white spirits category outwards and onwards.
This article by Joe Thompson, Associate Director at Cardinal Research first appeared in the May edition of Casual Dining Magazine