Craft Spirits Market Overview
The Craft Spirits Market size is estimated to reach $124.7 billion by 2027 and is poised to grow at a CAGR of 21.4% over the forecast period of 2022-2027. A craft distillery follows the importance of transparency in distilling, which translates into a fair use of ingredients. Moreover, the craft distiller should not produce more than 750,000 gallons annually. Lastly, the spirits distillation location should be communicated to the concerned authorities with that bottling location, and the process along with the aging process should be communicated as well. Furthermore, the craft distiller should hold ownership of 51% or more of the DSP to be labeled as a craft distillery. Craft spirits are distilled in small quantities, and some of the famous forms of craft spirits include gin, vodka, and rum. People’s craze regarding alcohol consumption is growing, and millennials are now preferring local craft spirits as they are locally outsourcing the said ingredients from local farms which in turn are boosting the local demand. Additionally, craft distillers are now adding a USP in terms of product innovation which can aid health. The consolidation of the industry along with the consumption of alcohol which follows sustainable production methods are some of the factors driving the Craft Spirits Industry forward in the projected period of 2022-2027.
Craft Spirits Market Segmentation Analysis – By Type
The Craft Spirits Market based on type can be further segmented into Whiskey, Gin, Vodka, Brandy, Rum, and Others. Whiskey held a dominant market share in the year 2021. It is owing to the extreme and unique taste which is offered by the said product domain. Product innovations over the years have allowed whiskey to provide certain medicinal benefits as well. Distillers are now adding various herbs and spices, to elongate the offering for taste purposes as well as for medicinal benefits. Whiskey has high levels of polyphenols, an antioxidant that has proven to reduce the LDL or bad cholesterol and substantiate the HDL or good cholesterol. Within the US, around 51% of adults have unprecedented levels of cholesterol, which whiskey can help.
However, vodka is estimated to be the fastest-growing, with a CAGR of 21.9% over the forecast period of 2022-2027. Vodka has been unprecedently used in craft spirits, especially the millennials are favoring canned cocktails, and vodka has various flavors such as orange-apple-lemon-light or hard, hence, vodka can be substantiated into different uses which will aid the product demand.
Craft Spirits Market Segmentation Analysis – By Distribution Channel
The Craft Spirits Market based on distribution channels can be further segmented into Off-Trade Channels and On-Trade Channels. On-Trade Channels held a dominant market share in the year 2021. It is owing to the opening of restaurants-bars and pubs- and various other ancillaries whose sales have substantially picked up post-vaccination and opening of economies. Moreover, liquor has been linked to the overall ambiance, and consumers prefer to drink such craft spirits in environments where they can socialize and bond with other pupils.
However, Off-Trade Channels are estimated to be the fastest-growing, with a CAGR of 22.1% over the forecast period of 2022-2027. It is owing to the cost-benefit one can take advantage of while opting for such channels. Owing to various taxes and surcharges such as sales tax or service tax, the overall cost of end-products rises, which users can mitigate by choosing the sale channel. For example, SLO Canned Cocktails, a pack of four RTDs are available for $17.99. However, the same alcohol content can cost somewhere close to $62-$65 for a pair of four cans.
Request for Sample Report @ https://www.industryarc.com/pdfdownload.php?id=504982
Report Price: $ 4500 (Single User License)
Craft Spirits Market Segmentation Analysis – By Geography
The Craft Spirits Market based on geography can be further segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. North America held the largest share of 38% as compared to the other regions in 2021. It is owing to the sheer size of the craft distiller market. Recently, it was valued at $6.7 billion in revenue terms. Additionally, the region has prominent craft distillers which are responsible for such staggering numbers.
However, Asia-Pacific is expected to offer lucrative growth opportunities to marketers in the projected period of 2022-2027. It is owing to a rising inclination to set up local breweries and craft distillers such as United Spirits that has propelled the start for craft spirits manufacturing in India. Lastly, a major chunk of the millennial population is concentrated in the likes of India, which is responsible for a surging alcohol demand in the projected period. Liquor consumption and urbanization have had a close associated correlation, thereby, with the increase in urbanization the consumption for craft spirits would grow.
Craft Spirits Market Drivers
The growing number of craft distilleries owing to the demand generation has been a key market driver
Consumers have grown extremely weary of the presence of local breweries, especially craft distilleries. Owing to such demand, a substantial increment has been in terms of new market entrants. Consumers have now been aware that sustainable products benefit them as well as the supplier/raw material manufacturer or processors. For example, US Craft Spirits Association went on to say that despite COVID-19, the market hasn’t stopped growing. Interestingly, liquor has been the most steadfast product domain which didn’t halt owing to the pandemic. The number of craft distilleries grew by 1.1% from August 2020 to August 2021. The market registered a sales equivalent of>$5 billion in 2020. The figures show robustness in terms of market affliction. Moreover, the volume differentiation between the sales from craft spirits and non-craft spirits was 3% in favor of the former.
The use of AI-ML has created a huge potential for market growth
Artificial Intelligence and Machine Learning were being heavily used in all other industries, however, the advent of AI-ML in making craft spirits has created a huge market potential, which experts estimate would help in bypassing the sales growth in comparison with non-craft spirits. The volume has upped from 2.2% in 2015 to 4.7% in 2020. Additionally, the value of craft spirits has grown from earlier 3% in 2015 to 7.1% in 2020. The major reason has been consumer demand, but the supply side has been aided by the use of artificial intelligence and machine learning. Some of the common ways through which AI is used is, AI cognitive services will be fed raw data including the distillery’s legacy recipes, sales numbers, and customer preferences. The algorithm can then generate more than 70 million recipes, that should be both popular and tasty.
Direct Purchase @ https://www.industryarc.com/purchasereport.php?id=504982
Craft Spirits Market Challenges
The market is highly concentrated which is supplemented by relatively higher costs, leading to a differentiated sales pattern
The market of craft distilleries has been under pressure in terms of market concentration. Moreover, the exports have shrunk from the US, as a decrement of 32.9% has been seen in 2020. Additionally, employments have shrunk by nearly 50% from 2019. Moreover, the large producers severely outpace the small producers owing to low capital tapping potential. 1.6% of the total craft producers are termed “large” and they represent a value equivalent to 57%. However, the majority of 90.1 craft distilleries are small, and they only supplement the demand for 10.3% annually. Additionally, the cost anomalies are high in comparison to big-brewhouses as they have capital infusion powers. Non-craft distillers have the potential to bring FDIs and start factories in low-labor countries, which in the case of craft distillers is absent. The following becomes a prime reason for cost-disparity.
Craft Spirits Market Industry Outlook
Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in this market. Craft Spirits top 10 companies include:
Asheville Distilling Company
Black Dirt Distillery
Copper Fox Distillery
Dark Corner Distillery
Tito’s Handmade Vodka
Willian Grant and Sons
In December 2021, Bold Rock launched its Craft Spirits Collection. The craft spirits would include Cinnamon Apple Whiskey, which is A 70 Proof, 35% ABV apple-forward whiskey, with a kick. Vodka would be 5x distilled at 80 Proof and 40% ABV. The American Whiskey would be an 84 Proof, 42% ABV whiskey with rick oaky and vanilla notes with hints of dark coffee and maple syrup. Lastly, the straight bourbon would be 88 Proof and will have 44% ABV while containing aromas of worn leather, stone fruits, and a lingering sweetness.
In November 2021, Rod Hammer’s SLO Stills, an award-winning craft distiller has introduced the new line of RTD or Ready to Drink canned cocktails at the Whiskey Fest in San Francisco. Rod & Hammer’s SLO Stills’ canned whiskey cocktails (11% ABV; 22 proofs; MSRP $17.99/12oz four-pack) are full-strength and ready to drink straight out of the can – no mixing necessary. Flavors include a Whiskey Margarita, Whiskey Mule, and a Whiskey Paloma.
In June 2021, United Spirits of India has expressed to go beyond and explore the vertical of craft spirits. To do so, they are planning to launch a new whiskey. The product is coming out after nearly two decades. The new brand would be named “United Epitome Reserve”. USL’s new product will be India’s first small batch and will be artisanal 100% rice whiskey. The product will be distilled in Punja-band and will be matured in Goa.
Geographically, North America held a dominant market share in the year 2021 owing to a vast network of craft distilleries. Additionally, the millennial population of the west has been adopting and demanding such locally crafted spirits as each one of them offer something different, and studies have indicated that people tend to drink more when they associate liquor with emotion. However, Asia-Pacific is expected to offer lucrative growth opportunities to the marketers owing to the rising millennial population and their inclination to consume alcohol as the trend governs.
The consolidation of the industry along with the consumption of alcohol which follows sustainable production methods are some of the factors driving the Craft Spirits Market. However, high cost pertaining to craft spirits in comparison with bulk manufacturers has been a market impeding factor.
A detailed analysis of strengths, weaknesses, opportunities, and threats will be provided in the Craft Spirits Market Report.
Spirits Packaging Market
For more Food and Beverage Market related reports, please click here
About IndustryARC: IndustryARC primarily focuses on Cutting Edge Technologies and Newer Applications market research. Our Custom Research Services are designed to provide insights on the constant flux in the global supply-demand gap of markets. Our strong team of analysts enables us to meet the client research needs at a rapid speed, with a variety of options for your business. Any other custom requirements can be discussed with our team, drop an e-mail to firstname.lastname@example.org to discuss more about our consulting services.