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Dutch spirits market is shrinking.
Friday, 29th February 2008
Source : Rabobank Dutch Spirits Industry Report
For the Dutch spirits industry - the glass is half empty while Dutch distilleries are on the rocks, and must spill over international borders to stay afloat.

"In a shrinking market, distillers, traders and retailers need to increase efficiency, manage the decline or revitalize the business," says a Rabobank Dutch Spirits Industry Report.

The Dutch spirits industry is one of the oldest in the world. The backbone of the industry's product range has historically been the Dutch gin ‘jenever'and liqueurs. Over the last 40 years, demand for jenever and other traditional spirits has dropped considerably, and although this has resulted in consolidation in the industry, a remarkable 60 distillers have survived, and several have even shown considerable growth.

The top-3 companies, Bols, Nolet and De Kuyper, have each developed distinct international strategies, but still 97% of jenever bottles never leave the homeland. Drinkers outside the Netherlands have not re-acquired the taste for traditional Dutch brands.

So if the Dutch aren't drinking jenever, and the non-Dutch aren't drinking jenever, then who or what is going to revive this 500 year old spirit?

"The only path to profitable growth lies abroad," says the Rabobank industry report, "The next step in the strategic development for the Dutch spirits industry has been to repositioning."

A few forward-thinking companies have shifted from the dwindling local markets and traditional spirits, to focus on export opportunities and generate international appeal. "The foreign market then becomes the major profit pool," states the industry report.

The American market is generously clutching their bottles of clear Dutch alcohol from one of the oldest and largest jenever producers. The Netherland's Nolet family has been distilling since 1691, distilling jenever. 

As a part of their antique company image, Nolet dusted off 11 generations of graying grandfathers for US magazine ads and the website. The Nolet family used their first copper kettle to concoct a recipe for Ketel One Vodka and rebrand the distillery.

But, do medium-sized Dutch distilleries have to join the vodka hype to save jenever? 

Actually, the report suggests that the Dutch distilleries need to creatively soak the market with reasons to drink jenever and "find niches in line with modern consumer trends, such as health and convenience, target marketing, regional products, premium products from new sources and innovative products with new flavour components."

"Further consolidation in the industry seems unavoidable, as it is unlikely that all current players will be able to allocate enough resources to invest for the future," concludes the Rabobank industry report on the struggling Dutch spirits industry. 

The Dutch spirits industry is a work in progress.

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