The Wine and Spirit Trade Association says the majority of new distilleries are making gin, with consumers showing ‘no signs of tiring of the quintessentially British spirit’. The UK now boasts some 95 different gin brands, selling 47 million bottles a year.
However, it notes that a number of distilleries are also investing in whisky and other spirits, meaning that as these products age and reach the market the shape of the spirits market could shift in the coming years.
“Distilleries in the UK are now diversifying and taking advantage of Brits' love of cocktails with an increasing number of new whiskies, vodkas, rums, brandies and liqueurs appearing every year,” it says.
In 2017, a total of 49 new distilleries were opened according to figures from HMRC: 22 of which were in England, 20 were in Scotland, four were in Wales and three were in Northern Ireland. Seven distilleries closed during the year (five in England and two in Scotland).
The UK has also seen a growth of distilleries outside Scotland: in 2013 the majority of the 152 distilleries operating were in Scotland. Now England shows the most rapid growth: accounting for 56% of all UK openings in the last eight years to reach a total of 135.
The popularity of gin has continued to grow spectacularly over recent years, with an increase in sales, exports and the range of products on offer.
The gin industry has risen from £630m in 2011 to £1.2bn in 2017 (12 months to Sept 2017). The majority is sold in shops (38.7 million bottles) but much is also sold through pubs, bars and restaurants (8.8 million bottles).
A YouGov poll revealed gin as the most popular spirit, with 29% of drinkers voting it as their favorite spirit.
Exports, too, have risen: worth £474m in 2016 and predicted to grow by 37.2% by 2021, according to an IWSR forcast.
“Gin is the key driver behind the surge in new distillery openings in the UK in the last five years,” said Miles Beale, chief executive of the WSTA.
“New gin brands continue to pop up on our supermarket shelves, on a regular basis, as Brits show no sign of tiring of the quintessentially British spirit. It wasn’t that many years ago when a pub would stock one gin brand and now a gin menu offering a range of gins and mixers is common place in our pubs and bars.
“It is welcome news that another 49 new distilleries opened in the UK last year bringing new jobs to the British spirit industry and helping boost Britain’s export potential.”
What about other spirits?
Although the UK’s ‘ginnaissance’ is undisputed, distillery licenses do not distinguish which spirit or spirits distilleries make.
While gin is a key part of the cocktail craze, consumers are also exploring new whiskies, vodkas, rums, brandies and liqueurs.
The number of Scotch brands in the UK market has more than doubled since 2010 to 246, while the number of UK vodka brands has gone up from 20 to 32.
Scotch whisky (which must be produced in Scotland alone) alone already accounts for 18.2% of UK spirit sales, compared to gin’s 11.5%.
While the WSTA is confident that the majority of new distilleries are making gin, it notes that many English and Welsh distilleries are also investing in whisky. These products have to age and so take longer to reach the market, meaning that the impact of the rising number of distilleries could go well beyond gin in the future.
This raises the question as to whether new brands will challenge gin, or whether the spirits categories will grow in a complementary fashion.
“It can’t be taken for granted that all new distilleries are solely for the purposes of growing the gin category, though it has clearly helped, nor does it mean that as new whisk(e)y brands come on to the market, that growth in gin will slow,” observed WSTA head of research and insights, Ciaran Myles.
“But it does imply that more brands in other categories will become available in the not-so-distant future, something that has already been happening in all spirit categories for a number of years. The question then is: will new whisk(e)y eat into existing market share, or will it increase the pie?”