Stephen Noblett, Food and Drink Sector Specialist at the Department for International Trade (DIT), explains how British distillers can make the most of the spike in demand for British craft gin overseas.
The UK is in the midst of a gin boom. Sales of gin in the UK topped £1.6 billion in the year to June 2018 according to the Wine and Spirit Trade Association, and alongside the so-called ‘ginnaissance’ at home has come a real thirst for our gin overseas.
According to statistics from HMRC, UK gin exports totalled more than £612 million in 2018 – up by 15% on the previous year. To put this into perspective, three out of every four bottles of gin imported around the world is from the UK (WSTA).
The largest single gin market for the UK, the United States, imported £191 million worth of our tipple in 2018, up £13 million on the previous year (WSTA/HMRC). However, the market with the highest export growth rate for British gin was South Africa, with the country importing 222% more of the spirit in 2018 than in 2017 (WSTA/HMRC).
As the international gin market grows, new distilleries across the country are making exporting a key part of their business strategy.
UK gin brands are well positioned to make the most of international demand, with our country boasting innovative gin distilleries, both large and small stretching from Land’s End to John o’ Groats.
To help businesses navigate the export process, the Department for Environment, Food and Rural Affairs (Defra) and the Department for International Trade (DIT) are offering a wealth of support to help British distillers who are keen to explore new opportunities abroad through the Food is GREAT campaign.
One UK craft distiller that has taken advantage of this global demand is The Cotswolds Distillery, which has seen its export sales grow by 350% since it began exporting in 2015.
To achieve this impressive growth, the company received help from the Food is GREAT campaign, working with a DIT International Trade Adviser to help navigate the exporting process.
After focusing on the US market for its initial foray into exporting, the company now ships its gin to 28 markets around the world including to Australia and Hong Kong.
As the UK’s domestic gin market becomes increasingly competitive, exporting can not only help local distilleries like The Cotswolds Distillery increase their resilience, but also boost their profitability as they access new marketplaces abroad.
However, alongside the benefits there are some challenges that firms looking to start or grow their exports must consider.
One major factor that distillers must navigate is alcohol regulation, with overseas markets often setting out specific requirements around factors such as labelling and packaging, which can differ from those in the UK.
For example, in the United States standard-size bottles for spirits are 750ml, while in the UK the standard size is 700ml. Additionally, all products must comply with US Food and Drug Administration rules, US Alcohol and Tobacco Tax and Trade Bureau laws for alcohol labelling and advertising, as well as each state’s individual alcohol beverage control requirements. It is small details like these that DIT can help to advise a business on as it considers moving into a new market.
These barriers, along with considerations such as finding trusted logistics providers and navigating new tax systems, can all be addressed with the right planning, insight and guidance.
Our network of International Trade Advisers can provide one-to-one support to help with issues such as legislation, translations and tax. My team offers local businesses opportunities to meet new partners through meet-the-buyer events in the UK, and they also organise trade missions to key overseas markets.
I’m encouraging all firms looking for support to contact their local DIT office to see the support available. Businesses can also visit great.gov.uk, which has thousands of live export opportunities currently listed and includes general information on exporting and events.
With overseas demand for our gin only set to grow, British distillers keen to take a wedge of this market shouldn’t put their export plans on ice.