Gin set for more growth but white rum struggling, says Mintel

Dry Martini back bar

Younger drinkers are set to drive continued growth for gin but white rum is struggling in “stormy waters”, according to a new report from Mintel.

Over two in five (42%) Britons aged 18 to 34 have drunk gin in the past 12 months, compared to just over a quarter (27%) of over-45s.

This is in spite of over half (56%) of white spirit and RTD (ready-to-drink) drinkers saying they think that gin is an older person’s drink.

These younger drinkers in particular are expected to help boost sales of gin to more than £1bn for the first time in 2015, hitting £1.04bn – an increase of 25% since 2012 when sales stood at £829m.

Britons are expected to drink 29m litres of gin in 2015, with a third (33%) having drunk it within the past year. Mintel forecasts that gin sales will continue to rise and reach £1.31bn by 2020.

The new research, published today in Mintel’s White Spirits and RTDs UK 2015, report, shows that 60% of Britons drinks white spirits such as gin, white rum and vodka, with 17% drinking four or more types.

However, volume sales of white spirits and RTDs have stagnated in the past four years and are estimated to stand at 217m litres in 2015 despite growth in gin.

The report comes at the end of a year that has seen more British bars specialise in gin, including Dry Martini by Javier de las Muelas which opened at London’s Meliá White House hotel in October (pictured).

Chris Wisson, senior drinks analyst at Mintel, said: “The strong performance of gin continues to stand out within the spirits market, and is widely seen as the most sophisticated type of white spirit by category users.

“One of gin’s sobriquets is ‘Mother’s Ruin’ and the drink still has certain associations with older drinkers, contributing to it being likely to be seen as an older person’s drink and the least likely as a young person’s drink.

“However, our research indicates that gin is in fact now most likely to be drunk by younger consumers, suggesting that it has a chance to forge a dynamic image and move into even more innovative areas.”

Commenting on the report, Dominic Limbrey, whose DJ Limbrey Distilling Co launched D1 London Gin last year, said: “The rise of gin sales among this demographic will not come as a surprise to anyone in the spirits industry and is reflected in the number of new boutique distilleries opening in the UK, particularly in London, as the demand for premium quality and diversity from this age group booms.

“As we’ve seen over the last few years, disposable income within the younger generation has increased and as such this group of consumers are willing to invest in high-quality products. Aside from this, nostalgic cocktails and drinking trends has seen a resurgence in traditional spirits such as whisky and gin which isn’t showing any signs of slowing. We are also seeing a similar shift in the vodka category as this premium taste continues to be in demand.”

While gin has helped to raise the spirits of the category in recent years, Mintel says that white rum is “in the midst of stormy waters”. Over the past year, sales are expected to have declined by 6% to £411m in 2015, and are forecast to sink further to £378m in 2020.

One third (34%) of Britons have drunk white rum in the past 12 months. Mintel research has found that just 11% of white spirit/RTD drinkers see white rum as value for money.

Vodka sales have shot up by 8% over the past five years to reach £3.46bn in 2015. It remains the most popular white spirit sold, with its sales accounting for 61% of the total white spirit market’s value.

Almost half (48%) of Britons have drunk vodka over the past year, with two in five (39%) white spirit/RTD drinkers seeing vodka as good value for money and half (47%) agreeing that it is ideal for using in cocktails.

Mintel research shows that white spirit/RTD drinkers are most likely to say that vodka is their favourite type (30%), followed by gin and white rum (20% and 17% respectively).

“Vodka continues to dominate sales within the category and the beverage enjoys a number of favourable associations, namely its mixability, unisex appeal and value for money,” Chris explained.

“While vodka and gin have thrived, white rum has found recent years altogether more challenging. Our research shows that white rum fails to stand out in a competitive spirits market and this is one of the likely reasons why it has struggled in recent years.”

Mintel research shows that there is a willingness among consumers to trade up when buying white spirits as gifts. A third (32%) of those who drink white spirits/RTDs agree that they would be prepared to pay more for craft white spirits, such as those made by smaller producers, rising to 45% of men aged 25 to 44.

Mintel’s White Spirits and RTDs UK 2015 report is available to buy, priced £1750. Click here for details.

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