The big guys want small distilleries because those are the gins consumers want to drink

FEW drinks have enjoyed such a successful makeover as gin. Once decried as “mother’s ruin” and vilified in artist William Hogarth’s 1751 depiction of “Gin Lane”, the spirit has gone from being caricatured as the Queen Mum or Princess Margaret’s tipple of choice to a hipster staple enjoyed even by millennials increasingly turning their backs on alcohol.

The volume of gin sold in the UK has soared during the past decade, growing by 33% in 2018 alone, according to figures from International Wine & Spirit Research (IWSR).

The same data showed gin’s slice of the UK spirits market doubled from 9% by volume to 18% between 2008 and 2018, with its share of retail sales by value accelerating even faster from 9% to 19% over the same period.

But – whisper it – that growth may just be coming to an end.

A note issued in December by asset management and research firm Alliance Bernstein to its clients analysed figures from data monitoring company Nielsen.

They highlighted gin’s rolling threemonth volume growth had fallen from a high of more than 50% in 2018 to just 4% between August and October last year, while the rolling threemonth price-mix had contracted by 0.4%, the first time in “some years” it had turned negative.

“Although we caution against taking these numbers as a completely accurate reflection of manufacturer sales, due to the limitations of offtrade-only Nielsen data, it does look like this could be the beginning of a sea change in UK gin trends,” the note said.

“It appears as if the market has now reached saturation for ever higher priced new entrants, with ever more obscure botanicals.”

What effect could reaching “peak gin” have on distillers in the north of Scotland? If sales start falling then could mergers and acquisitions be on the cards in the gin sector?

“The craft players that have only been on the market for one or two years and which have very optimistic growth projections are likely to be disappointed – and their financial backers as well,” Trevor Stirling, managing director of European beverages at Bernstein told The

Press and Journal. “Some of the craft brands that have achieved critical mass and have a distinct positioning could still be of interest to the majors, particularly those that have proven potential outside the UK, but there’s going to be a shake-up – it’s going to be tough.”

Stirling reeled off a list of big players that had already acquired craft distillers, including Teacher’s blended Scotch owner Beam Suntory buying Sipsmith, Benriach parent Brown-Forman taking over Ford and Pernod Ricard – the French group behind Chivas Brothers – swooping on Monkey 47, Canadian label Ungava and Malfy in Italy.

He thinks there will still be room on the shelves for micro-distillers,