Business ideas: Gin
With sales of gin soaring, 2016 marks the perfect time to launch your own gin distillery, open a gin bar, or even create a gin subscription service…
Gin is having a moment – again! It was mooted a couple of years ago, but according to market research group Mintel, the UK is in the midst of a “gin-naissance” with sales of the spirit set to reach £1.31bn by 2020 following estimated sales of £1.04bn in 2015.
This rising demand for gin – sales are up 25% on 2012 – has been triggered by changing tastes of younger consumers; particularly those aged 18-34 who are now the most likely age group to drink gin.
For entrepreneurs with an interest in the drinks market, 2016 presents an opportunity for you to create your own spin on gin…
Starting a gin company: Why it’s a good business idea
In Mintel’s December 2015 report, it predicted that Brits would have drunk a whopping 29 million litres of gin by the year-end and an even larger volume in 2016. And it’s not just market data which points to a gin revolution.
Waitrose recently announced that its gin sales are up 300% with gin courses at its cookery school for 2016 fast selling out. Similarly in a recent chat with Startups.co.uk, Tom Boardman, founder of gift, gadget and unusual products seller Firebox.com told us that its Unicorn Tears Gin Liqueur was the company’s bestseller in the lead-up to Christmas.
Support for the annual Gin Festival, which holds events across the UK, is also growing fast and has amassed over 40,000 fans on social media and counting.
But that’s not all.
The number of gin distilleries in the UK has multiplied in recent years and according to the Gin Guild there are now 17 gin distillers across the country, with two in the capital alone.
The surging number of distillers has paved the way for entrepreneurs to launch their own bars focused solely on gin such as the London Gin Club which stocks over 200 gins and gin “emporium” Heads and Tales in Edinburgh. Could you follow their lead and launch your very own gin bar?
Gin-related business opportunities
Opening a gin bar is one of the most obvious ways to capitalise on the “gin-naissance” trend. London is host to some of the country’s most popular gin bars so if you think gin is the business for you, then take inspiration from the likes of the London Gin Club and Portobello Star; home to the famous Portobello Road Gin.
In addition, pop-up gin bars are becoming ever more popular and offer a great way to trial out your business idea: Peters & Co. Gin Palace in Hackney is a good example of a successful gin pop-up.
Becoming a ginsmith and launching your own distillery is another way to enter the market but will require technical expertise and investment. The Gin Foundry offers a useful guide on how to create a craft distillery and advises you to think about a USP when thinking about starting a gin brand; your gin will need to have unique or improved flavours or other selling points to help it stand out.
If it’s an events business you’re looking for, you might want to consider running your own gin-making and cocktail classes. Interest in Waitrose’s gin courses suggests demand is on the up.
For tech-savvy entrepreneurs, 2016 could also be the perfect time to launch your own online gin club and subscription service; comparable to the craft beer services offered by Startups Awards stars Beer52 and HonestBrew. A few entrepreneurs have entered the gin subscription market recently, such as The Gin Crowd, but are relatively early-stage so there’s still an opportunity to disrupt the space.
Nik Koster of drinks agency Garnish Communications is currently involved in launching the ‘World of Gin’ campaign and says that year on year, gin has showed growth in sales with no signs of slowing down. Koster commented:
“A large part of gin’s success has been down to the start-ups and small businesses launching in the category.
“There’s a number of ways for businesses to capitalise on the growing market, with Eventbrite announcing an increase of 25% in gin events there’s a large demand in the market for both the product and new and interesting ways to try the products themselves.
“It’s important to know there’s a lot of competition out there now and to make sure you build a concrete plan, find your USP and stick with it especially if you want to build a business focused on long-term success.”
Chris Wisson, senior drinks analyst at Mintel, added:
“The strong performance of gin continues to stand out within the spirits market, and is widely seen as the most sophisticated type of white spirit by category users.
“One of gin’s sobriquets is ‘Mother’s Ruin’ and the drink still has certain associations with older drinkers, contributing to it being likely to be seen as an older person’s drink and the least likely as a young person’s drink. However, our research indicates that gin is in fact now most likely to be drunk by younger consumers, suggesting that it has a chance to forge a dynamic image and move into even more innovative areas.”