An analyst for the research firm, Spiros Malandrakis, said that the British-born spirit suffered a 2 per cent decline in worldwide volume output in 2011.
Performance mirrored its underwhelming growth rate in 2010, he added, noting that the “much-vaunted great leap forward is apparently yet to come”.
Euromonitor International said it expected gin to record only flat volume growth globally between 2011 and 2016, with declines already witnessed in Spain slowing, and UK growth slowing also.
Economy brand grip
The US accounted for the vast majority of gin sales, according to Euromonitor, while the UK saw modest two per cent growth after a relative upsurge in 2010.
But Indian sales dropped by 5 per cent (by volume) in 2011, in a repeat of what Malandrakis described as the “dismal performance” of 2010.
One reason for this was the transition from local to branded products in the country, he added.
“Unlike vodka and other blended Scotch whisky, where standard brands dominate, gin continued to largely be in the grip of economy brands.”
These accounted for 50 per cent of volume sales in the country, Malandrakis added.
But more crucially, gin did not possess the ‘youthful’, ‘fashionable’ associations of blended Scotch whisky and vodka, the analyst said.
He added: “Gin has not dazzled the all-important urban youth and hence has continued to mainly focus on low-income, heavy-drinking consumers in Western and Southern India.
Malandrakis said that Euromonitor expected volume growth in India to “remain anorexic at best or face a further hemorrhage. The US will continue, reluctantly, to embrace the category. So where should distillers focus?”
Given a “perfect storm of austerity-driven abstinence” in core sales regions, penetrating emerging markets could prove one way, Malandrakis said.
But he expressed reservations given the “acquired taste”, and said that on account of this, new growth in gin could prove a long-term strategy.
“Providing more accessible products for less sophisticated palates should not be seen as taboo. If Hoxton Gin’s proposition actually works, perhaps more irreverent launches should follow.”
Premium products and a heritage that stressed luxury was one way forward for distillers, Malandrakis said in conclusion.
“But taking into account the still precarious state of the vast majority of western markets should also become part of the equation,” he added.
“After all, gin's affordability and humble roots are what made it popular in the first place.”