As reported by the CGA, gin's market share in hospitality businesses such as bars, pubs and restaurants has dropped significantly with around 28% of consumers drinking less gin in comparison to 2021.
Other choices like vodka, liqueurs, and specialty drinks have seemed to be more attractive to customers as gin is seen as an overpriced option - take a look at our blog post Six Food and Drink Trends for 2023 to find out more about the rise in popularity of tequila and rum.
Pal Gleed, CEO of The Gin Guild, said:
"This is a really dark moment for the industry. Some distillers are currently operating on margins but are struggling to cover rising costs for as long as possible."
What's more, due to the ongoing cost of living crisis, some distilleries were forced to shut as consumer demand for bigger and cheaper brands has increased.
Pre-Covid, supermarkets were stocking up on many deluxe gins produced by independent distilleries as buyers were looking to purchase more local brands. Compared to many other spirits, gin takes less time to be fabricated and many producers use neutral spirits that are purchased from large suppliers. As a result, gin became popular amongst British consumers and its demand grew noticeably.
According to the CGA, it is still a profitable market with more than £1.5 billion worth of gin sold in 2021 by the hospitality sector. However, in 2022, sales were down by £163.6m from 2019, when gin sales were at its greatest.
Therefore, the future for craft gin distilleries is unknown and a lot of uncertainty can be expected moving forward.