Craft Spirits Market size is valued at $ 46.7Bn by 2019 and is anticipated to grow at a CAGR of 25.33% during the forecast period 2020-2025. The Craft Spirits Market growth rate is attributed to the growing beverage industry worldwide offering innovative beverages as per the evolving market needs. The crafts spirit is a distilled spirit or liquor that is distilled as compared to the wine and beer that are fermented. The crafts spirits widely available in the market include brandy, gin, whiskey, rum, tequila, and flavored liqueurs among others. The burgeoning craze of drinking liquor mainly in cocktail parties and social or corporate gatherings are driving the growth of the global crafts spirit market in the forecast period. Liquors are the foremost ingredients used for making cocktails; hence, several drinks that require at least one distilled spirit, and holds significance in several bars, hotels, and restaurants as essentials for cocktails. From growing social acceptability of mild alcohol consumption among consumers especially amongst youth to the rapid emergence of demand for premium quality craft spirits owing to changing cultural attitudes of the young and affluent population is anticipated to propel the Craft Spirits Market during the forecast period 2020-2025.
Product Type – Segment Analysis
Whiskey segment held the largest share in the market owing to the unique flavor, taste and texture offered by the juniper berries in the preparation of whiskey thereby, anticipated to increase the sales of whiskey. Furthermore, the product innovations such as flavored whiskey, formulated using exclusive ingredients, is anticipated to propel the market growth.
However, gin segment is anticipated to experience a substantial growth over the past few years, owing to rising consumer demand. Distilleries have taken a strategic approach to use unconventional ingredients such as lemon, orange peels, almond, grape, saffron, coriander, spices, anise, and cinnamon to enhance the taste and flavor of products. Market players are focused on new product launches to fulfill the consumer demands. For instance, in August 2019, Downton Abbey has expanded its product portfolio with the launch of its super-premium London Dry Gin.
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Distribution Channel – Segment Analysis
Based on distribution channel, on-trade sales segment held the major share of the market in terms of revenue in 2019, and is estimated to grow with a CAGR of 19.53%. This is owing to the increasing number of small and medium sized pubs, clubs, lounges and restaurant’s offering premium quality craft spirit. Furthermore, these sales channels offer complementary entertaining services like music, dance floor and free snacks, which is to leverage the sales of through this segment of distribution channel.
However, in developing countries there is an inclination in consumer base towards off-trade alcohol consumption owing to price and safety concerns.
By Geography – Segment Analysis
North America dominated the Craft Spirits Market with a share of 37% in 2019. The application of Craft Spirits has grown rapidly over the last few years owing to the Growing millennial population in the region, huge population and increasing disposable income. The region, led by the U.S., is home to many globally renowned beverage manufacturers that have helped the market growth at a robust rate, owing to secure approval policies adopted by regulatory organizations. According to a report published by the U.S. Department of Commerce, U.S. alone spends more than $230Bn annually on alcoholic beverages thereby, the growth is creative, innovative cocktails and the rising “cocktail culture” in the U.S. which is to aid the make craft spirit such as super-premium tequila and vodka trendy.
Asia Pacific is anticipated to witness robust growth over the forecast period, owing to increased purchasing parity, coupled with the significant growth of millennial population in emerging countries including China, India, Malaysia, Thailand and Indonesia. Enormous potential in the unexplored markets of these countries is to create lucrative opportunities in these regions. Economically independent millennials in Asia Pacific are living with parents, which leads to more spending power. As a result, millennials in countries such as China and India tend to spend more on leisure activities, this, in turn, is projected to impact the product market in the region. For instance, in February 2020, Natural Distilling Co. an Australian craft distilling company announced the launch the Hemp Gin and Hemp Vodka.
Drivers – Craft Spirits Market
Growing Adoption of Automation and New Product Launches:
With adoption of technology, manual filling is difficult and can lead to significant product losses. The automation with a small mobile filling line increases production speed thereby, frees up personnel for use elsewhere and limits product loss owing to human error. Moreover, the craft distillers are focused in the production of innovative products using various herbs, spices, botanicals, and fruits. They obtain raw material from family farms with strong experience in grain and fruit production. The continuous launch of new, unique product is expected to tip the scales in favour of the vendors in the global craft spirits market in the coming years.
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Challenges – Craft Spirits Market
Increasing Consumer Shift towards Low-Alcohol Beverages
The major challenge for the market is attributed to rising concerns about the adverse effect of alcohol consumption is encouraging consumers to opt for low-alcohol containing beverage consumption such as wine, beer and others. Moreover, there is an increasing consumer shift towards craft beer and wine which is anticipated to hinder the market growth.
Craft Spirits Industry Outlook
Product launches, mergers and acquisitions, joint ventures and geographical expansions are key strategies adopted by players in the Craft Spirits Market. In 2019, Craft Spirits Market share is fragmented by the top ten players present in the market. Craft Spirits Market top 10 companies are Diageo Plc., Remy Cointreau, Pernod Richard, William Grant and Sons Ltd., Rouge Ales, House Spirits, Anchor Brewer & Distillers, Copper Fox Distillery, constellation Brands Inc., Woodinville Whiskey Co. and others.
In January 2019, Jameson announced the launch of its new bottle of Irish Whiskey at Irish Distillers’ Fox & Geese bottling facility in Dublin, made using pressure sensitive label technology thereby, allowing split labels applied to the glass bottles.
In December 2016, Prenod Richard announced the complete acquisition of Smooth Amebler, which was expected to increase their market prominence.
North America dominated the Craft Spirits Market with a share of 37% in the year 2019.
The factors such as growth of Craft Spirits market can be attributed to expanding customer penetrations and inclinations towards unique and experimental distilled liquors are amongst the major factor projected to impel growth of Craft Spirits Market.
Escalating fashion of restaurants and bars amongst the juvenility span and the government ordinances and procedures concerning distilled food & liquors in several nations’ stars are the key factors owing to the growth in the segment during forecast period 2020-2025.
Related Reports :
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B. Luxury Wines And Spirits Market
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