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09.2004

Massachusetts Beverage Business

archivedFeaturedArticles

Article By: Robert Bradford

Last year was a pleasant surprise for
Gin


When was the last time you saw reports showing robust growth statistics for every single significant import brand on the sales charts? Notable is a 10% increase for the phenominally successful, #1 super-premium icon Bombay Sapphire (now well beyond the 600,000 9-liter annual case-sale benchmark) and a 20% increase for #2 super-premium contender, Tanqueray No.10 (now doing over 60,000 cases). But all the other premium import majors like Beefeater, Bombay Original and the regular Tanqueray, and upcoming players like Quintessential and Boodles, and small-batch niche brands like Hendricks, Plymouth and Citadelle are rapidly rising, as well.

And while there is still slight negativity in the overall domestic segment, which has been something of a category albatross for many years, now, the numbers are more hopeful than they have been in a long while. It certainly helps to is see giant #1 Seagram's, America's domestic best-seller by a 4-to-1 margin, actually reversing a long-suffering downward slide, and showing its first growth year in a decade. Seagram's has now climbed back to a 2.8 million 9-liter case plateau in annual sales, and the overall decline in the rest of the domestic segment is not nearly as severe as it has been in recent years.

But, once again, it's the imports that continue to create the buzz and excitement - and the real cause for celebration is at the super-premium levels where a whole lot of new flavor products and major brand investment have suddenly materialized. It seems like only yesterday we thought we were dealing with these esoteric little sub-categories at these high-end levels, but, now, this is where a whole lot of significant action is going on.

To find out more about where all this is heading, I examined the current gin marketplace closely with three Massachusetts distributors who share a bullish interest in gin and represent a wide variety of brands.


STERLING DUNN
VICE PRESIDENT
HORIZON BEVERAGE COMPANY'S
STEALTH DIVISION

ROBERT BRADFORD From your on-premise perspectives, how do you evaluate today's gin category? You number a couple of the principal impact imports like Beefeater, Bombay and Bombay Sapphire in your portfolio, plus several small batch players like Plymouth, Bols Genever, Van Gogh, and Quintessential. And you're now handling some intriguing new products like blue-colored, cinnamon-nutmeg-infused Magellan, and the recently-launched, pear-infused Wet-by-Beefeater. What do you see happening out there?

STERLING DUNN What immediately pops into mind about gin is that it's a field-of-dreams category. By this, I'm really referring to that line from the "Field of Dreams" movie: "If you build it, they will come." And this is what's happening right now in the gin world. There are more people entering into this category, and there's more going on than might seem to be warranted by the rate-of-consumption statistics at this particular point in time. So, it's sort of a case where you're seeing people positioning themselves for the future, and I think this is a particularly smart and significant move.

If you want some convincing proof, just look at where major present-day gin category excitement is coming from. Look at some of the players jumping in, right now, with new line extensions, new brands and enormous amounts of ad-spend brand investment, which are either introductory or re-positioning efforts within the category. Look at a giant established brand icon like Beefeater, in Allied Domecq's portfolio, coming out with a new Wet-by-Beefeater gin product. Look at an innovative brand-building genius like Michel Rioux, who was the guy behind Bombay Sapphire, Grand Marnier and Absolut vodka in its infancy, who's now introducing a new Magellan Gin. Look at a guy like Sidney Frank, who was, and still is, the architect of phenominal successes like Jagermeister and Grey Goose vodka, and who is now going to be launching a new gin brand next autumn called Blue Goose. And here's a major player like Future Brands jumping in behind something like Plymouth Gin. Doesn't this tell you something?



RB What does it tell you about the opportunities?

SD Well, just start with Plymouth Gin. I call it "the oldest new brand around" because it's a fascinating brand with all this history going for it. To begin with, it's the oldest working gin distillery in England. And it was actually the place where the Plymouth fathers spent their last night before setting foot aboard the Mayflower in 1620 to begin that historic voyage across the Atlantic to found the first New England British colony in the New World. And the amazing thing is that nobody had seen the brand in years. It took the foresight of somebody like Future Brands to devote time, attention and money to resurrect it here in the US, and make a major effort to reintroduce it to our marketplace.

I think the main reason all these guys are now being attracted by gin can be answered by just looking at the cocktail culture of today. The current situation is that everything is being driven by flavored vodkas and triangular glasses. Anything goes in there now. And the funny thing is that the martini that's being sold at the bar, today, has absolutely nothing to do with anything that you or I would have ever called a martini. Today's martinis are what used to be called shooters, because almost all of them are brightly colored and generally sweet.

My own personal professional background happens to have been primarily in the wine field, and what's happening here is something like what you see typically happening with the development of a wine drinker's tastes. You have to remember that, except for rare cases like my MW colleague Sandy Block, who seems to have sprung full-blown like Athena from the head of Zeus, and immediately started drinking Premier Cru vintage wines at an early age, all the rest of us wine drinkers entered the wine category drinking sweet and fruity stuff like Mateus or white zinfandel or whatever it was. Then, maybe, we moved to Rieslings, then to Chardonnay, and then maybe to Sauvignon Blanc. And then we started experimenting with lighter reds, then moved to heavier reds and so on. Throughout the whole process, there was this logical sort of path we were following.

The same thing is happening now in cocktails. The introduction to beverage alcohol for most LDA drinkers used to be beer. Not anymore. You're seeing these LDAs, today, beginning their adult drinking experiences with cocktails. And it's one cocktail, in particular, called a martini. Only, as I just mentioned, these are fruity and sweet shooter-like drinks that can have almost any kind of ingredient. But these LDAs ain't going to be drinking fruity and sweet forever, and when they start to shift their tastes, the next logical step can include something like gin. However, traditional gin possesses a very distinctive flavor. The juniper character is inherent, and something that you can't entirely get away from. Historically, this has been something of an obstacle for many younger drinking audiences. And this is why you're seeing these new entries into the market taking a page from the flavored vodka play book. They're not going all that way, because you can't with gin. Gin is not a fundamentally sweet spirit - it's dry. But you can do some things with numerous botanical recipes and assorted spices, not necessarily to hide, but to camouflage or add another little edge to the juniper character. And some gin products even try and entirely de-emphasize the traditional juniper-botanical idea.



RB What would be some notable examples?

SD An interesting case in point is a recent small batch 80-proof import from the UK, called Baffert's. It touts itself as "the vodka lover's gin" and claims the fewest botanicals of any gin product on the market. This is an unequivocal direct appeal to the vast vodka-drinking audience it's competing against. Another example is Hendrick's, which came on the market about three years ago and has been contributing some considerable gin interest in its own right. It's a small-batch 88-proof luxury gin item from Scotland, made by the noted single malt scotch producer Wm.Grant Sons, and is infused with rose petals and cucumber. It prides itself on eccentricity, using "A most peculiar gin . . . not for everyone" pitch line in its ad campaigns.

Look at Magellan, which is another just-introduced product that takes gin modifications to a new and different level. Not only have they infused the unusual botanical tastes and spicy complexities of cinnamon and nutmeg, which you don't find in any other gins I'm familiar with, but they've also infused a natural blue color. Mind you, this isn't just putting color on the bottle, like what you see with Bombay Sapphire, but, rather, the liquid has a bluish hue that is naturally imparted to the actual spirit in the bottle from the blue wild Iris flowers and roots which are used in the distillation process.



RB Bombay Sapphire, of course, is the super-premium colossus of the whole category.

SD No doubt about it - and this has been true for many years. It's a simply extraordinary success story by any industry standards. Remember, this is the brand that's really been responsible for generating all this modern-era gin revival for maybe a decade. And, over and above these various new product attempts to attract younger gin consumers we're seeing today, everybody's still trying to get a piece of Bombay Sapphire. Make no mistake about it. It still is the 800-pound gorilla in the super-premium gin marketplace, and is still the role model in the category. People still look at it and say, "Jesus, I'd like to get just a little piece of that!"

The phenominal thing about this brand, when it first appeared, was that they took a point of difference at a time when there wasn't the proliferation of new brands that you're seeing now. They put it in a blue bottle, so it stood out on the back bar. They raised the proof up to 94 to give it more mouthfeel, and did some botanical things that made the flavor different and more complex. And, presto!, they have just totally owned this super-premium upper segment of the gin market ever since.

You continue to have the usual Beefeater, Bombay Original and Tanqueray battle going on at the premium level, but, at the super-premium level, it's no contest. Sapphire is miles ahead of anyone else. Tanqueray No.10 has come in and tried to take them on, unquestionably seeing some significant pockets of success. But look at Sapphire's numbers over the past 10 years. The growth has been both dramatic and amazingly consistent. On the national sales charts, Bombay Sapphire now does well over 600,000 cases in annual 9-liter-case volume sales in the US. It's nearest super-premium competitor is Tanqueray No.10, which does something like around 70,000 cases, annually. Does any other product completely dominate a category segment by this kind of 9-to-1 margin? Not even close.

I can only say that anybody who is entering into gin or profiting off the category, right now, should be lighting a little candle at the altar of Bombay Sapphire, because these have been the guys who have been showing the potential for the future of gin for a good many years, and created excitement and vitality in the category at a time when it was in relative decline. Sure, you're now seeing a lot of people wanting to get back into the game. But you must remember it was Sapphire that was making this category attractive and keeping things alive for a great many years.

Another example of a promising new gin product is the recently-launched Wet-by-Beefeater, which is a pear-infused line extension, and represents a distinctive departure from its notably dry parent Beefeater brand. But, unlike flavored vodkas, when I taste Beefeater Wet, I don't get a strong pear flavor. This is a lot more subtle. What it does is ameliorate some of that traditional pronounced juniper quality, making this gin a little friendlier to somebody who is just starting to stick toes into the gin pool for the first time.

I might add that, in the case of a big established brand like Beefeater, this kind of brand alteration can also get a little tricky with core consumers, because chances are good that many regular Beefeater Dry drinkers may not find Beefeater Wet all that appealing, so it could be something of a disconnect. However, this may not be of real concern to marketers, since everybody's primary brand-building initiatives today are all targeted at growing the youth market. It's the segment of the drinking population that everyone is trying to capture in marketing efforts. So, everybody is going all out to get a piece of the LDA business, because, as the saying goes, if you can claim them as consumers when they're young, you keep them as they age.



RB From what I've heard from many brand marketing directors, there has always seemed to be an unusual degree of consumer loyalty among gin drinkers. Do you find this to be true?

SD Interesting point. I was recently talking to a bartender friend who was saying this exact same thing about his own gin customers. He was telling me that gin drinkers are some of the most brand-loyal beverage alcohol consumers you'll find anywhere. Today's vodka audiences are wildly experimental - they're willing to try anything and everything, anywhere, anytime. But a gin drinker really sticks with a specific brand profile, which almost always has a distinctive identity.

Traditionally, there are very different gin family styles, such as London gins, Dutch gins and highly stylistic proprietary gins, which, by legal definition, can only be made by one producer and distilled within the confines of one location, like, for example, Plymouth Gin, produced only by Coates Co. at their Plymouth, England, facility. If I remember correctly, the basic difference between these gin styles is that Dutch is heavier, London a lot lighter, and a gin like Plymouth, which uses only copper stills that give a rounder mouthfeel, will be somewhere in between, but is closer to a lighter London gin.

With Dutch gin, the botanical infusion is done with the mash and a re-ferment process, whereas with London gin, you rectify a clear distilled spirit first, and then do the infusion. Right now, for the American palate, it would appear that the Dutch style is far and away the least appealing. Why? I guess it's just too "ginny". That's why you don't see a lot of it in circulation, and there's a reason for that. Also, there are some gins from Holland, like the elegantly-packaged super-premium Van Gogh in our portfolio, which actually isn't a Dutch style gin at all. In fact, it's a typical London dry style despite its point of origin. But, quite frankly, we haven't been able to do much with it to date.

This all gets back to what I said at the start about gin being a "Field of Dreams" category. Producers may want to be there on the playing field, but you have to build in order to attract an audience - otherwise, you've got a pretty empty ballpark. And as a distributor, I have to personally embrace those key players who are helping me drive my own field-of-dreams business, right now. Bombay Sapphire is hugely important, because it's still the engine pulling the train. A brand like Plymouth has growing importance, because, as people move into this category, here's a gin that has a distinctive and different presence for its historical background, and stylistic qualities that set it apart from anyone else. Something like Wet-by-Beefeater and a Magellan can be important because, again, they've wrapped themselves in this page from the flavored vodka category script, and, therefore, offer points of difference and flavor tastes which present more of a cutting edge and fun for luring the braver vodka drinkers over to gin.



RB As is so often true with building any brand and category interest, it would seem the primary challenge here is at the on-premise level.

SD Exactly right. It's axiomatic in this business that brands are built at the on-premise level where most experimenting goes on. And it's especially true with gin. So, the key person who really needs to be bravest in this whole gin initiative, and is maybe the most important person in the whole equation, is the person behind the bar. I mean, the sad fact, right now, is that you can talk all you want about all this martini rage, but hardly anyone knows what a martini really should be by definition. A real martini is all about gin, of course, and, in fact, the very first martini recipe of in the 19th century specified a particular gin brand which happens to be Plymouth. It was the original martini cocktail prescription on record. And this kind of product awareness can offer a lot of significant cachet for discerning gin drinkers as they become more familiar with all this richly-endowed category history, and I'd like to see a lot more emphasis on it in future marketing efforts.

But, meanwhile, you and I can go out on a little pub crawl, tonight, and examine all the martini menu lists that are being offered, and I would bet you that a good majority of them don't even have a single gin martini listed. So, pretty obviously, we need to be encouraging key bartenders to look at gin opportunities with a new kind of creative slant and say, "OK, what can I do different with gin? What can I create that will have a flavor profile that's going to be friendly to people and something they're really going to like, instead of just relying on typical old gin gimlets, the old style martini, or the Tom Collins - since nobody wants to drink out of a highball glass anymore, anyway?" We have to get some of these more adventuresome bartenders to set themselves apart as true mixologists and start presenting gin in different and imaginative ways. And whatever drink they come up with, it's going to have to be served out of that triangular glass, because it's this martini glass that's driving drinks right now as much as anything else.

I mean, it's simply astonishing. In all my on-premise work, when I go into any establishment and look down the bar, and count the number of beer steins and pilsener glasses, the number of wine and highball glasses, what I'm mainly seeing is this overwhelming number of martini glasses everywhere. It's become like a sex-in-a-glass symbol. And, so, to be really successful, gin simply has to find ways that are friendly and flavorful which can get it into this glass. So far, there really haven't been too many effective answers.

One of the most flavorful gin cocktails I know is something like a Ramos Gin Fizz, which, if I remember from my bartender days, has gin, light cream, orange juice, egg white, and orange flower water. Another version is a New Orlean's Fizz that's built around a lime flavor with fresh limes and lime garnishes. These drinks are easy to screw up, but when made right they're an absolutely fabulous showcase cocktail with flavor profiles that people are looking for today. However, a major drawback about this type of drink for on-premise practical usage is that they are a total pain-in-the-butt for any bartender to make. A more workable solution would be something like the new pear martini recipe that Wet-by-Beefeater has been getting some early success with, where a little pear liqueur is added in. But the on-going challenge remains trying to find more creative and appealing consumer usages for the category.

Anyway, I think the best news for the gin, right now, is that we're undoubtedly seeing some encouraging forward motion and a pronounced new interest. Gin is more diversified, exciting and a lot healthier than it's been in years. We're not at that point, yet, where you'd call this an event, but the category has clearly begun taking baby steps in the right direction. There's now all kinds of marketing clout of major suppliers like Allied Domecq, Bacardi USA and Schieffelin Somerset heavily supporting their brand imports, plus the introduction of these new entries. All this is helping draw attention with some very interesting high quality products, and many of the gins of today have clear points of difference to work with. So, it's not just Dad's stuffy old gin category anymore. And, like I said, if we can really get some bold bartenders creatively working these brands in the on-premise arena, a lot people are going to start having a whole lot of fun.


JIM HICKEY
VICE PRESIDENT
UNITED LIQUOR'S CENTURY DIVISION

ROBERT BRADFORD As I recently reported in these pages, United Liquors currently does about a 36% share of total spirits sales and is the #1 distributor here in Massachusetts. Most of the trade is now well aware that you've just gone through an incredibly challenging period of dramatic expansion, relocation, restructuring, brand changes, and repositioning in the past year. Apparently, one of the key new organizational developments was United's new Century Division you're directing, which was created just last winter to be an exclusive strategic alignment with the many Diageo and Schieffelin Somerset's brand interests that you're now handling. One of these core brands, of course, is Schieffelin Somerset's best-selling premium import, Tanqueray gin, as well as its more costly super-premium offspring, Tanqueray No.10. So, for this closeup report on the Massachusetts gin market, I'm interested to know how you would evaluate Tanqueray's performance and consumer awareness, right now?

JIM HICKEY Well, first, just to give you a bit more input about the present need for creating our new Century Division, you have to realize that the combination of Diageo and Schieffelin Somerset, today, represents the largest producers, promoters and manufacturers of distilled spirits in the world, and has now acquired a staggeringly large portfolio of major premium brands like Tanqueray which have nothing but upward growth written all over them in terms of consumer demographics. So, you take what this supplier is doing, and combine it with the critical strategy here at United Liquors to align with that supplier, with the right relationships, the right framework, plus the understanding that there needed to be a change in the route to market from manufacturer's hands to consumers' hands, and the need for a special new division to handle all this became apparent.

As far as Tanqueray gin is concerned, it certainly is one of our key products, and presently does 60,000 cases here in the state. It's currently growing at about 7% to 8% and is a major core brand for us in terms of commanding attention, driving sales dollars and having tremendous growth potential against the appropriate target consumer audience in the near future. It's been a critical lynch pin in our performance since Century started last February, and it fits very nicely into the focus detail that we execute both on- and off-premise. There's no question that up-selling our customers to premium and super-premium spirits is where the business is headed. Our portfolio is very much driven by those price segments, and Tanqueray is certainly a main staple.

We sell some other great gin brands like Bombay and Gordon's gin, but Tanqueray has a special place with us here in Massachusetts, where it does 53% of our total gin business. It's also positioned to grow. We're getting tremendous marketing support from Schieffelin Somerset. For example, just this week, two nights in a row, I was driving home either via the Southeast Expressway or the Mass. Turnpike, and here were two huge prominently-located billboards advertising Tanqueray, which are being seen daily, by hundreds of thousands of drivers coming in and out of the Boston area. Schieffelin Somerset has always been tremendously involved with consumer awareness and this kind of big ad-spends behind their brands. The fact is, they've increased their ad budget 25% just since last year. Aside from Tanqueray, this also applies to their whole portfolio of leading high-image brands in many categories like Hennessy, Johnnie Walker, Grand Marnier, and Moet. Their consumer imagery has been so successful, in fact, that being seen with a Schieffelin brand, today, is often viewed as being successful in life.



RB What else do you suppose gives the Tanqueray brand such consumer cachet and even, perhaps, a certain kind of snob-appeal aura?

JH Well, the brand's heritage is very important to understand. It's been around since 1830, and has had real staying power for all this time. This kind of longevity always helps establish a true quality message with any product. And, certainly, as with other categories, Tanqueray's pricing has a lot to do with imaging. It's always been a pricing leader against the category, with a 750ml selling around $15, and a 1.75 averaging in the $25 to $30 range. But you've also got across-age demographics going for it. I mean, everyone's had a TNT, a Tanqueray and tonic. It's a great summer drink, and we're trying to give this more and more a year 'round appeal. Obviously, this has proven to be a highly successful selling point when you consider that over half of Tanqueray consumption is via this TNT drink. It's somewhat analogous to the Cuervo Gold margarita image with tequila drinkers, or what Crown Royal with Coca-Cola has been able to establish. Tanqueray has this same kind of hold on a gin-and-tonic for today's gin-drinking audience. And it's an ideal drink for entry level drinkers, since it's easy drinking and has a taste and image that LDAs respond to.



RB How's Tanqueray No.10 performing?

JH It's been catching on nicely and growing about 15%, right now. It may be at a higher super-premium price-point, in the $29 range for a 750ml, but it's really been clicking for us this year. It has a unique, ultra-smooth blend of botanicals and juniper to appeal to the most discriminating gin drinker, but also lends itself beautifully to a variety of gin cocktails, starting with a truly classic martini and several creative new martini recipes like one we call a Ten Grand. This combines No.10 with Grand Marnier, a little pineapple juice and some fresh lime juice. A No.10 green apple martini has also been an on-premise success. But getting back to what we were saying about upscale consumer imagery, one of the things that No.10 really has going for it is fantastic ratings, above and beyond what the Tanqueray brand already has achieved. No.10 just received a 98 rating from Wine Enthusiast. It got a gold medal and Spirit of the Year awards from Wine Spirits Annual Buying Guide. It received a 5-star rating from the Spirit Journal. And it won a gold medal at the world competition for spirits out in San Francisco. You can't begin to measure how much recognitions at these highest levels add to building the quality message and stature of a brand.



RB Do you feel optimistic about the overall outlook for the gin category?

JH Very much so. And here, again, is where Tanqueray provides so much leadership. There's always been a clear consistent message of premiumness and quality about this brand, which also, by association, helps build an image for gin, in general. "Distinctive since 1830" is Tanqueray's tag line. This definitely commands a whole lot of respect for gin consumption. Anyway, my job is to take whatever brands we're fortunate enough to be assigned, and go out there and bang 'em out, selling them to the right customers, and doing the right brand-building, sales-driving stuff to sustain long-term growth. And with a brand like Tanqueray, I see all kinds of opportunities ahead.

Don't think for a minute that all these young flavored vodka drinkers out there can't be persuaded to experiment and dabble in other categories and try drinks like a Tanqueray and tonic. It's refreshing, has the zest of lime flavor, is easy to mix, and it can come out perfect every single time. The lower segment of the category is where you find most of the category troubles and all the struggles in the competition back and forth between the Gordon's, the Gilbey's and the Seagram's. This is where the battle comes out on price. But for a new user, just coming into premium and super-premium, they can readily be attached to a brand. And, as they enter into the gin category, Tanqueray is a natural. It's been a defining premium icon for generations. And this is not going to change. Like they say, get 'em young, keep them for life.


MIKE BRODY
VICE PRESIDENT of GENERAL SALES
M.S. WALKER

ROBERT BRADFORD What developments are you seeing in the gin category today and what brands are performing particularly well for you in your portfolio?

MIKE BRODY There are two distinctly different levels of this category that we're involved with. There's the domestic lower-premium end with brands like Jim Beam's, Gilbey's and Burnett's from Heaven Hill, plus the gin labels we own and produce such as Rubinoff, Cossack, Caldwell's, Kimnoff, the S.S. Pierce labels, and many others. As the last remaining bottler in the state, we buy in bulks, add water to it, filter it, and bottle it under various brand labels. In this country, there are only a few suppliers from whom you can buy train carloads of gin that you then blend down to 80-proof or what have you for the domestics. And we've done exceptionally well with this lower-end of the business for quite some time now.

This is the value-conscious part of the marketplace where consumers are looking to save themselves a few bucks. Price points average between $10 and $15 for a 1.75l, and maybe a brand like Gilby's will retail in the $15 to $20 zone. But there's been a whole new recent gin development at the super-premium import level, which is where the category has really started to get more and more fascinating. At this level, 750mls sell in the $20-plus range, and the really amazing thing is to see how many consumers are willing to buy in at these significantly higher price points without even blinking. The quality tradeup is obviously there.

Interestingly enough, if you go back 30 years ago, when I first started, we were producing a lot of flavored gins, as well as a great many flavored vodkas, too. I remember a mint-floavored gin that was doing exceptionally well. Somehow, the flavor market sort of disappeared for a while, but look at today's marketplace. Flavored vodkas are all the rage, and, although flavored gins haven't taken it to that level yet, keep watching, because it's beginning to happen quite rapidly, in fact. Just look what flavored rums have done. I'm fairly certain we're not too far from seeing the gin category exploding in this same direction.

All this is indicative of something that I feel is so often true about this industry. Everything that's old is new. And another thing is that a lot of people want to tell you that gin usage is somewhat limited because of its juniper flavor. But I'm one to tell you that juniper does not necessarily have to be a deterrent, but can actually add zest, character and interest to a great many drinks. You can use it as the base for a whole range of cocktails. Think about gin-based cosmopolitans or gin-based apple martinis. They work. The truth of the matter is that gin can be remarkably mixable when combined with the right ingredients.



RB What imports interest you?

MB We have a diversified selection that goes all the way back in history to the category's origins with one of our import brands. Gin was invented by a Dutch chemist named Dr. Sylvius, who produced it as a medicinal product. Not long after, the first commercial gin spirit was produced by Bols in the mid-1600s. We're still selling this 80-proof Bols Genever brand today. Another historic import we carry is Plymouth Gin. It's 82.4-proof, and has been produced by the same distillery since 1793, and was recently purchased by the Absolut Spirits Company. They pride themselves on having no bitter botanicals and an unusually smooth taste. Compare this to a brand like Citadelle that we carry, which is an 88-proof pot-still gin produced in Cognac, France, and has about 19 botanicals, and makes the absolute classic, shaken-not-stirred type of dry martini that 007 James Bond would love.

So, here you are taking a Dutch spirit, made popular by the British, and you can go into Hendrick's Gin, which we carry, that's distilled and bottled in Scotland. It's made by the well-known Scotch producer, Wm. Grants Sons, who introduced it to the US in September, 2000. We've it carried it from the beginning. It has a light, crisp, smooth, aromatic taste, with a flavor profile of coriander, citrus peel, juniper, rose petals, and cucumber. Last year, it won Gin-of-the-Year in Food & Wine's spirits competition, and received a gold medal at the San Francisco 2003 Wine Spirits Competition. It was also voted "Best Gin in the World" by the Wall Street Journal last year. So, it's been piling up a tremendous number of critical awards and accolades, far greater than anything we ever initially anticipated. The buzz has become tremendous.

You really know a product is making it when you go to a friend's house for dinner and he's telling me, "I've discovered a great new gin. Tonight, I really want you to try it." And he's showing me a crock bottle of Hendrick's. He explained that his daughter lives in Boston's North End. She's recently tried it and liked it so much she brought him a bottle as a present. Now he loves it, too. I almost hated to have to tell him, "That's great, but I already know about it, because I'm the Hendrick's distributor."

What this illustrates is that, in the beginning, with specialty gins like Hendrick's, you're always trying to find ways to go mainstream. We use a grill-marketing tactic, which is getting people to taste, taste, taste, just trying the product. You get the on-premise accounts to make martinis with them. You float a cucumber slice on the top to show a point of difference. And once the consumer has gotten into it like this, then they start talking, one to another. It's the most basic and successful of all marketing campaigns when you can get this kind of person-to-person taking place.

Initially, when Grant's introduced it into just a few select US metro markets, like with us in the Boston area, we took it on-premise for about 90 days before it even entered a single store. And for almost all of 2001, we still were only placing it in just a few of the better wine and bottle shop retail outlets, because finer gins have almost become like single malt scotches, where they create a niche and cult-like following. These are the markets where you'll find that when consumers like a particular taste, they stay with it. And, still today, we are doing far more on-premise than off-premise with a brand like Hendrick's.

Same is true with our Plymouth gin, which is a classic, small-batch traditional 82.4-proof British brand with a distinctive traditional London Dry juniper accent. As I mentioned, it was recently purchased by the Swedes who own Absolut, and who are now promoting Plymouth in their white spirits portfolio, as well. And look what the Absolut Spirits Co., VNS, is doing with it now - you're seeing all kinds of advertising for Plymouth in upscale consumer magazines, and it's getting a big play in newspapers like the Boston Globe. This, of course, is another way of trying to develop this same select type of connoisseurship following.



RB "Small batch" is by now a liberally-employed definition/term used in all sorts of whiskey marketing. When it comes to small batch gin production, do you actually find distinctive higher qualities in small-batch products, or is this more to do with advertising hype?

MB In my view, small-batch can truly make a huge taste difference in gin. Flavors are married more effectively. The resulting spirit is much more defined. If you take any flavored spirit, whether it be flavored vodkas or rums or whatever, and you truly distill it, rather than just rectify it with added flavors, the difference in taste is just tremendous. And, particularly with the enormous range of ingredients and flavor subtleties in many of these high premium gins, quality is significantly enhanced by the right kind of marriage between the alcohol and the botanicals when it's produced by a small-batch distilling technique.



RB So, how would you characterize the overall gin marketplace, right now?

MB At this point, there's still no major challenge to the dominance of vodka in the white spirits industry. I mean, you're still filling 10 bottles of vodka to one bottle of gin, so the market is much, much smaller. But the fairly dramatic growth of the gin market at super-premium levels and above is what's significant here. It's an amazing situation where you're seeing such broad and contrasting developments. Our company looks at gin as being a very real future opportunity, on the verge of exploding the way the vodka and rum categories have with flavors. I just think it's the next white goods step into flavors. To me, there's a natural progression from vodka, to rum, and now to gin. Actually, Seagram's was getting into this years ago with their Gin Juices flavors. It's a spirit that possesses sufficient character and versatile base, so that, if you add something a little sweet in there, it can be used with almost anything.

Sure, I know that if you were to talk to marketers of many major gin brands, like the big one in the blue bottle, or whatever, they may still want to tell you that, No, No, No!, gin has remain targeted to the person who's that classic martini or gin-and-tonic drinker. But I'm telling you that the younger consumer of today thinks that a martini is anything that's light and sweet and gets served in a V-shaped glass. The young adult consumer today is an experimenter. And, so, in this experimental present-day drinking culture, people are looking for a whole spectrum of tastes and textures, which can include all kinds of opportunities for gin at these more intriguing, flavor-infused levels of the category.

Today, in our market, the hottest flavor of all is raspberry - and don't be surprised is if you see one of the majors coming out with a raspberry-infused gin offering in the very near future. In fact, I'd almost be willing to bet my house on it. And orange, lemon or lime are other immediate possibilities. It's a natural progression that's inevitably going to happen.

Understandably, none of this will be of any particular interest to older gin consumers - but that's not the point. The major gin brands aren't concerned about losing their base of business, which is pretty much secure and stablized. What they want are new upstart products which will create a whole new consumer base of younger drinkers coming into the category. And, sooner or later, many of these will want to gravitate towards more classic gin consumption, as well. So, as I see it, all this translates into a very optimistic business outlook, particularly for these upper level products. I'm more and more convinced we're on the threshold of of the most dynamic era that gin has ever known more and more products being presented in exciting and intriguing ways. The pendulum is swinging back in the right direction for this category. It's just a matter of time.


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