When we assess the performance of the spirits category in Britain’s on-trade over the last few years, it is impossible not to start with gin. This once unassuming spirit has had a greater influence on the drinks industry than any other product lately, and our OPM tool shows its on-trade sales soared by 42% to more than £490m in 2019.
But beneath these stellar numbers is a complex and nuanced story. Gin has gone through numerous metamorphoses, including the premiumisation of traditional London dry styles and a kaleidoscope of flavoured variants—led by the massive success of Pink Gin. If this evolution and new product development can continue, there is no reason to doubt that gin will continue to fuel growth in the spirits category.
What else in spirits can stand up to this behemoth? Rum has been considered the spirit most likely to emulate gin’s performance for some time, and the popularity of spiced and premium golden rums in particular led to a 7.7% jump in volume sales last year. Tequila volumes rose too, by 4.7%, and with the majority of spirit and mixer consumers making spontaneous decisions when drinking out, there is an opportunity to influence consumers to choose tequila through serve.
All about the cocktails?
Why are spirits like gin, rum and tequila succeeding while volumes of venerable categories like whisk(e)y and cognac fall? Demand for cocktails is the key. Our BrandTrack research shows that more than one in five (22%) consumers now drink cocktails in the on-trade, and the market has grown by nearly 10% to more than £600m. With 42,000 outlets across the trade now selling cocktails, differentiation is going to be vital for operators and suppliers in 2020.
Three trends to follow: micro, spritzers and low
What else can we expect from spirits in 2020? CGA’s Business Leaders Survey last year showed that micro-distilled spirits are on the up, and the continued popularity of super-premium gins and other ‘small batch’ styles shows that drinkers do have an appetite for niche products—although the total market may remain relatively small.
Spritzers also appear to be coming back in a big way. CGA research shows that 72% of cocktail drinkers would consider drinking a spritz now, with gin and vodka among the most popular options. A third key area is no and low alcohol spirits, and our Influencers Report reveals that more than two thirds (70%) of influential bartenders see it as a trend to be aware of. No and low is still a very small fraction of the spirits category, but consumers are showing healthy interest and there have been a number of high profile brand launches in recent months.