The on premise has always held a special place in my heart. From visiting pubs in Northern England in my formative years to exploring Chicago’s vibrant bar scene when I first moved to the U.S. a decade ago, these experiences have shaped many of my fondest memories.
Working in this fantastic industry allows me access to invaluable data that offers a unique perspective I’d love to share with you. Our on-premise solutions at NIQ are best-in-class, equipping our clients with the insights needed to sell more products and enhance the visitor experience. The on-premise channel is where brands take flight and trends are born. By combining sales, consumer, analytic, and operator insights, we provide a comprehensive view of this landscape.
I’m excited to dive into various topics and categories in the coming months through this column, exploring the dynamic world of the on premise together.
A Gin-naissance?
This month, we’ll focus on the illustrious spirit that is gin. As a category known for its flexibility and vast variety, a good selection of gin is a hallmark of any quality establishment. But what’s the current state of gin consumption? Are people drinking more or less? Is it just gin and tonics? And who exactly is the modern-day American gin drinker?
A Shining Light in a Declining Market
It won’t come as a surprise that the spirits industry has faced challenges over the past 12 to 18 months. The post-COVID boom, when consumers flocked back to on-premise venues, has naturally slowed. In this tough economic environment, establishments must work harder than ever to attract foot traffic.
Total spirits sales have taken a hit, with dollar sales down -6.3% compared to last year. While non-alcohol categories have shown some resilience (more on that in a future column!), all subcategories are feeling the pinch. However, amidst this decline, the gin category is emerging as a shining light, currently winning the battle for share across the bar.
Despite sales declines ($) of -5.5%, share has increased at a pace only bettered by tequila and cordials.
The Power of Premium
A spirits category’s health can often be assessed by which kind of brands are the ones driving performance within it. Value-based and high-end products have their place in every kind of assortment, but it is at the top end where outlets can start charging the higher prices and generate those much-needed dollars. Within gin, super premium leads the way, significantly outperforming value, mid, and premium brands.
Several factors are contributing to premium gin’s resurgence. Craft distilleries are innovating with unique botanicals and flavor profiles, appealing to adventurous consumers. Moreover, gin’s adaptability in cocktails has made it a favorite among mixologists eager to create refreshing, signature drinks. As we delve deeper into this category, we’ll explore these trends, consumer preferences, and the innovative strategies that are helping gin reclaim its place in the hearts—and glasses—of on-premise consumers.
Cocktails are often the key driver behind sales in any spirit category—just look at how the margarita propels tequila sales, and gin is no exception. Our latest Cocktail Report, which highlights a variety of cocktail trends, reveals that classic gin cocktails like the Tom Collins, negroni, gin fizz, and martini all rank among the country’s top 25 serves. The gin consumers’ preferred serve is a cocktail with 32% stating this, pushing a premium mixer serve into second place (17%). This underscores the vital role that cocktails play in elevating gin’s profile and driving consumer interest.
A Younger, More Modern Consumer?
The stereotype that gin is for older drinkers is just that—an outdated stereotype. Data from our On-Premise User Survey reveals a different story: 42% of those who drink gin are 21-34-year-olds, compared to 34% for spirit drinkers generally.
Moreover, gin drinkers tend to be wealthier, urban dwellers who frequent on-premise venues more than their counterparts in other spirit categories. They are also more likely to visit some of the fastest-growing and most influential venue types, such as airport bars, cocktail bars, premium nightclubs, experience-led bars (think arcade games, ping-pong, golf), and hotel bars.
This shift in consumer demographics presents exciting opportunities for brands to connect with a younger audience, driving innovation and engagement in the gin category.
Warnings From Across The Pond
Despite gin’s relative success over the last year, the category remains small compared to the sales seen in Great Britain and other European countries. Gin has experienced huge growth over the last decade in these markets thanks to consistent, premium mixer serves, a significant increase in local/craft brands, and the branching out into flavored offerings.
As with all good things though, nothing lasts forever, and the category is now experiencing significant declines due to oversaturation and consumers pulling back on spending. The top brands continue to thrive, which sends a warning to our shores, in a crowded market, there will always be winners but inevitably, there will be losers too.
Conclusion
As we delve deeper into the vibrant world of gin, it’s clear that the category is poised for both challenges and opportunities. With a younger, more diverse consumer base eager to explore gin’s versatility and classic cocktails driving its popularity, there’s much to celebrate.
However, we must also heed the warnings from established markets, where oversaturation has led to declines. By leveraging insights from data and trends, we can navigate this evolving landscape, ensuring that gin continues to thrive in the on-premise space.
Originally published in Bar and Restaurant news
