Whiskey and agave-based spirits like tequila and mezcal have been getting most of the media coverage for their respective stellar growth trajectories, but there are a couple of other spirits categories the industry and consumers should be keeping their eyes on.

If you were to take the category figures at face value, it would be easy to overlook the performance of gin and rum. For the calendar year 2016, gin volume was up a modest 0.7 percent to 9.9 million 9-liter cases, while rum volume was slightly down by 0.2 percent to 24.7 million cases, according to the Distilled Spirits Council. Meanwhile, American-produced whiskey was up 6.8 percent and the tequila category (which includes mezcal and other agave-based spirits) was up more than 7 percent. So, with mid-to-high-single digit increases like those, it’s easy to see why these categories are getting most of the attention. However, the real trends—especially those relevant to craft spirits producers—are hidden behind those category-wide numbers. Super-premium gin, the price tier that includes most craft gin volume, was up nearly 12 percent. The same tier in rum saw a volume gain just shy of 8 percent. Granted, the super-premium segments of both categories remain relatively small—it’s just under 1.5 percent of all gin cases sold and 2 percent of all rum cases; the percentage of each category’s total revenue is a bit higher, due to the higher price point, accounting for about 3 percent of overall gin dollars and 5.5 percent of rum sales. But consumers are trading up into above-premium segments for both, which translates to a significant opportunity for craft producers. It also means immediate profit potential, as both spirits can get out into the market faster than whiskey without being tied to the same aging requirements of the latter.

And craft should soon be able to have a greater impact on the overall category numbers, considering the segment's growth trajectory. Among the findings in the Craft Spirits Data Project—which ACSA conducted in partnership with Park Street and IWSR—was that the number of craft producers reached 1,315, as of August 2016. For some perspective, there were only 204 producers in 2010. So, there are more than six times the number of craft spirits producers in the U.S. than there were just six years prior to the study. Craft's share of overall U.S. spirits volume reached 2.2 percent; its share of spirits revenue passed 3 percent. In 2010 craft volume and revenue share were only 0.8 percent and 1.1 percent, respectively. So, expect to see overall U.S. gin and rum numbers climb, as craft producers make a more significant contribution to the market in the coming years. 

Rum already is benefiting from the tiki bar renaissance, as it’s a staple of some of the most iconic tropical drinks. Many such establishments also serve as rum education institutions. Alameda, Calif.’s Forbidden Island, for instance, offers a multi-page well-curated menu of rums, designed for sipping. The bar also offers tasting flights organized around a particular theme, region, or flavor profile.

And, to get a sense of where craft gin is headed in the United States, the best places to look are outside the country. Europe has rapidly become a continent of gin fanatics over the course of the past decade. The United Kingdom in particular has been experiencing a massive renaissance of the spirit that it put on the map in the eighteenth and nineteenth centuries. The British government reported that the number of gin distilleries in the U.K. doubled between 2010 and 2015. The growth of the country’s Gin Festival has been a major reflection of the spirit’s rebirth. The consumer tasting festival began in the English city of Leeds in 2013 and now has grown to nearly 20 such events each year in locations throughout the country.

And it’s not just England; gin production and consumption is also surging in Scotland—yes, whisky territory. Many Scottish craft distillers have been turning to gin for a couple of reasons, aside from market demand. For one thing, it’s hard for startups to compete with iconic Scotch whisky brands that benefit from massive, mature stocks. Secondly, they don’t have to wait for gin to age. That's a significant issue among American craft spirits producers as well. 

Many American craft distillers have been producing world-class gin in their own right for many years and it’ll only be a matter of time before the categories start grabbing some of whiskey’s abundant headlines here. 

Nielsen recently conducted a Design Category Audit with 10 craft bourbon brands, evaluating them on a variety of metrics among 500 U.S. consumers. Package designs were evaluated on their ability to stand out, drive preference and convey key brand messages.

The study revealed that taller bottles, along with bolder colors and single focal points on pack gain advantages on visibility and share of attention. Among the packages evaluated, Iowa Legendary Rye was top-ranked for visibility—being seen by 1.9 times more consumers within the first few seconds of looking than the least visible pack tested. Iowa Legendary Rye also elevates consumer perceptions as the most broadly differentiated pack tested, establishing itself as the most “unique,” “bold,” and “masculine” pack. However, 291’s design claimed the top spot for overall likability.

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