The total number of distilleries in the UK has risen by 19% in the last year, from 110 in 2015, to 131 in 2016, research from accountancy group UHY Hacker Young has revealed.
Since 2012, there has been a 107% surge in the number of distilleries in the country, in large part due to the popularity of artisan gin.
Indeed, sales of gin surged by 12% in the past year, ensuring that for the first time ever sales of spirits brought more money to the UK treasury than beer.
Whilst analysts say that UK gin sales are expected to soar, UHY Hacker Young predicts sales of Scotch whisky will fall slightly by 2020 to £1.17 billion, from £1.28 billion in 2016.
The short production time of gin allows distillers to quickly ramp up production, without the lengthy maturing process of whisky. And the ability to quickly produce limited-edition lines sold at higher margins has ensured sales have kept up with rising demand.
Several high value acquisitions within the sector have also contributed to the growing number of distilleries, as new entrants look to imitate these successful exits.
London gin maker Sipsmith was bought by Beam Suntory in December. In addition, larger players have also entered the market to capitalise on the growing trend towards premium gin. Brewdog, the Scottish craft brewery, recently launched distillery division called Lone Wolf.
UHY Hacker Young head of drinks James Simmonds said: “The gin-naissance shows no signs of abating, with the industry going from strength to strength.
“Five years ago, artisan gin was a relatively unknown product, but now it’s very common to see five or ten different premium gins on the menu or on a supermarket shelf. Premium gins often retail at around £30 a bottle making it a high margin industry.
“Gin can be very versatile – with many companies adding new and unusual flavourings to their products. This means that new producers can differentiate themselves relatively easily in comparison to other spirit producers such as whisky.
“However, not all gin distillers that start up will have the same success. They need to ensure they have tight business plans, funding in place and they robustly test their assumptions in their marketing and sales strategy.”
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