Australian Gin Report: Trends, Triumphs, and Tribulations

Australia has seen an exponential rise in its gin industry over the past decade, much of which on display last weekend at Junipalooza Sydney, where 40 of them served up their wares to eager enthusiasts.

It's a dynamic market, infused with the passion of artisanal producers and bolstered by unique native botanicals. It paints a picture of innovation, resilience and creativity.

However, like any evolving industry, it comes with its share of opportunities and challenges.

Having completed a full Junipalooza weekend and on the other side of multiple distillery visits, speaking to dozens of producers and tasting just shy of a hundred domestic offerings - here’s my abridged report on the big talking points in Australian Gin right now.

1. Taxation Stagnation

The Australian gin scene faces an ever-growing challenge: taxation. Often described as "a handbrake on growth" by those I spoke to, there's a resounding concern about how the current trajectory of taxation policies continues to stifle the industry.

As luxury spending is already on a decline, the six month incremental hikes in tax poses a significant threat, especially as the current levels (some $100+ per litre) are already some of the highest in the world.

This taxation trend doesn't just deter producers from making further investments in infrastructure and personnel, but consumers too. Gin is already considered a luxury good and when spending is down as people tighten their belt, it’s the kind of good that drops off the shopping list very quickly.

It’s clear that while increased taxes might seem like a short-term boost for government coffers, it is counter-productive in the long run for the economy and at the cost of an otherwise thriving local industry.

Feedback from industry insiders underscores the potential benefits of a tax freeze. It could spur job creation and propel distillers to enhance their production capacities and reach, both at home and overseas. However, despite ongoing dialogues with the government and positive noises emerging, faith in industry bodies to successfully bring about this change remains mixed.

2. Range Rationalisation

In the craft distilling sector, diversification is the name of the game. Unlike their British counterparts, Australian producers often tout a broad spectrum of offerings, from gin to liqueurs, whisky, rum, and vodka – making their ranges expansive and poised to respond to changing market demands.

As the gin trend begins to taper, not only does the increasing demand for other spirits grow, but the call for more focused gin ranges also becomes evident.

Brands must focus on the purpose of each SKU, its target audience, and the occasions it caters to now more than ever. Nowhere was this more obvious than on back-bars in Sydney, where there was a notable retraction of domestic gins on shelves. “What’s the point in having all of them?” one leading figure told me, “rate of sale is everything now”. ??

The sentiment also came up time and again in conversation – and the winning formula seems to lie in selectivity. Producers who curate their range meticulously, consolidating around only a few gins and who have a clear route to market with purpose and intent for each variant, tend to better convey their brand ethos and narrative.

In time, this will help them maintain a more loyal fan base as consumers buy into the brand and an idea - not just a certain flavour.

3. Base Spirit & Native Botanicals

Australia's gin producers enjoy unique advantages.

Should they want to, the less stringent rules give them the capability to produce their base spirit. Some harness this to extremely well, with cane, grape and cereal base spirits all being honed into fantastic vodkas that are used as the basis for further rectification. The fullness of mouthfeel adds texture, and the craft is hugely impressive to learn about.

The second is access to rich diversity of native botanicals. Oceanic ingredients, hybrid varietals, unique to Australia species and a culinary scene that’s adventurous and multicultural makes for informed and spoiled for choice distillers.?

Combine the two and it can yield spectacular results. No wonder so many Australian gins scoop international awards! Yet, crafting a signature recipe is all about moderation. What came up time and again, both in conversation and in the way they are described is balance.

Gone are the days of lemon myrtle forward everything. Gone are days where it’s okay to have juniper brandy. The scene has moved on and in showing restraint and subtlety with the indigenous botanicals, alongside the ability to push the spirit to near 95% ABV and further filter where needed, Australian Gin makers are showing their prowess.

4. Re-formulations and Growing Challenges

For many gin producers in Australia, the journey began with experimentation. Self-taught methods and iterative trials were the foundational pillars of many a distillery. Some got it right first time, others made mistakes they still live with.

With time, their expertise grew (as did their brands) and upscaling production has been the focus for the past few years. From a distilling quality perspective, it was clear to see how far the industry has evolved since 2019 at Junipalooza.

Many are better equipped, more experienced and having seen products go from concept to glass and the feedback making its way all the way back, a few are even choosing to refine their original gin recipes for sharper botanical nuances and heightened flavour profiles.

It was also clear to see the improvement in quality in the second or third product releases – a direct consequence of the learning curve producers have gone through and their improved skill sets.

Less overt to drinkers but hot on producers’ thoughts when pushed a little were the dilemmas of scaling up. Should the existing recipes be recalibrated when upgrading production scale or do you stick to what you made before even if it means recreating inefficiencies?

Many are grappling with this choice.

While some have successfully replicated their flavours and improved the process, (some even elevated their profiles while upscaling) it’s been notable to taste others who inadvertently diminished the brightness of their gin by no longer doing what made it so special in the first place.

5. Tourism & Parochial Trade

Australia's wealth of wineries and a booming tourism economy underscore the value of visitor centres and cellar doors.

Beyond just sales, these spaces immerse visitors in a brand's universe, moulding them into brand advocates. It’s a side of the craft distilling business many European distillers should take inspiration from, as the base-line standard for Australian front of house offerings is significantly more advanced than those here.

Furthermore, there's an innate regional pride in Australia. Producers consistently witness local consumers (and trade outlets) fervently backing their regional brands.

What was presented to me by owners’ time and again was the contrasting fortunes this brings.

This instant localised loyalty is limiting on a national scale as it makes breaking into cities very challenging even for Australian brands. That said, it’s a huge positive closer to home and when combined with the volume sold through tourism direct at the distillery, the protective parochial support provides a steady volume for many producers.

It enables them to achieve a respectable annual output and have business than can steadily employ dozens of people and make predictable forecasts for the year ahead.

It also underscores the need for local government support, schemes and regional brand building. Made in Tasmania, Made in South Australia and more are not just tag lines, but growing campaigns to promote subsets of producers on the international scene – just as what happened for wine regions like the Yarra, Barossa and the Margret River in the decades past.

I return feeling like the Australian gin scene is at an interesting crossroads. It’s evolved rapidly and changing once more even quicker.

It’s amazingly diverse and has examples of the very best quality in every aspect of ginsmith’ing you can look into.

With challenges like taxation and upscaling, range curation, continued opportunities to showcase native ingredients, the reliance many have on tourism and more - producers will navigate the changing landscape in many different ways. They'll need to as well, there are strong headwinds ahead for the gin category.

One thing's for sure; innovation, adaptability, and authenticity will remain paramount.

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