Craft Spirits Market

Global Craft Spirits Market (2024 to 2029)

Global Craft Spirits Market share value in 2024 was 20.20 billion, and it is expected to grow at a CAGR of 22.15% during the forecast period 2024-2029 to reach USD 54.93 billion by 2029.

Spirits are a type of alcohol. This alcohol is handcrafted and generally produced by small distilleries. The manufacturing of craft spirits requires some level of art along with science. This type of alcohol is made by makers, they use real ingredients, and these distilleries are independently owned. Craft spirits require a person to taste, smell or touch to decide the quality of the crafted beverage. This helps to decide whether the beverage is meeting the expectation or not. This also involves checking if the craft beer is stored in a barrel for enough time or not so to be bottled. Craft spirits also involve processes such as picking up a proper block of grapes for wine production. The distillery for craft spirit is small. This is due to these craft spirits can be hands-on, and it's easier to familiarise yourself with each batch. Craft spirits distilleries are distilleries that value the importance of transparency. These distilleries produce less than 750,000 gallons yearly. 

The increase in the number of distilleries is expected to create opportunities in the market over the forecasting period. For instance, as per the American Association of Craft Spirits, As of August 2021, there were 2,290 active artisan distillers in the United States, an increase of 1.1% from the previous year. Additionally, the increase in development in the industry drives market growth. This leads to advancement in manufacturing and products. The increase in disposal income among the population is creating an opportunity for market growth. This is due to an increase in the number of people with high package salaries. This population spends a lot of time in restaurants and pubs. This leads to an increase in demand for craft spirits. These are the factors that will create opportunities in the market over the forecasting period.

Global Craft Spirits Market Drivers:

The new generation born between the 1980s and early 2000s prefers more different types of craft spirits. This is one of the driving factors in the craft spirits market. This population makes up a huge part of those who often drink craft spirits. The millennials seem to be major buyers of the huge range of food and beverages that includes craft spirits. This increases the demand for ethnic premium and flavoured-spirits this includes craft spirits. This increases the demand for craft spirits. As craft spirits are mostly made by the hands-on method, and it is composed of real ingredients. This helps to target the niche market. With the help of this, consumers have the choice to choose among various flavors and types of alcohol. The quality of craft spirits is good as they are manufactured in small amounts, which makes it easy to manufacture good quality products.The increase in consumption of alcohol helps to drive the growth of the craft spirits market. For instance, as per World Health Organisation, Male drinkers consumed an average of 19.4 liters of pure alcohol and female drinkers 7.0 liters of pure alcohol per person globally in 2016. Hence the increase in consumption of alcohol drives the growth of the craft spirits market. Additionally, the increase in the number of restaurants and bars fuels market growth. This helps the consumers as craft spirits are easily available in these restaurants. In these restaurants, craft spirits are available in various types, such as beer, wine, vodka, gin, brandy, etc. This makes the easy availability of craft spirits to customers. In addition, the increase in the number of millennial generation going to pubs helps to drive the market. These are the driving factors for the craft spirits market growth.

Global Craft Spirits Market Restraints:

The increase in government rules and regulations for the manufacturing process of craft spirits hinders market growth. This is to maintain the quality of the beverages. Additionally, the increase in taxation. Some distilleries were not allowed. They have to gain the same economy of scale same as major distilleries. Due to high taxation, increase the price of the beverage. This leads to an increase in the cost of craft spirits. This is not affordable to low-income category consumers; this leads to a decrease in demand for craft spirits. The climate-changing issues also lead to a decrease in growth in the market. Additionally, the increase in awareness among the population about the side effects caused by an increase in consumption of alcohol. The side effects caused by the increase in consumption of alcohol are liver dysfunction, liver cirrhosis, etc. For instance, as per World Health Organisation, 10% of all deaths among people between the ages of 15 and 49 can be attributed to alcohol as the main risk factor for premature death and disability. This leads to a decrease in demand for craft spirits. These are the factors that hinder the craft spirits market growth.

Impact of Covid-19 on the Craft Spirits Market:

The food and beverage industry was majorly affected by COVID-19. COVID-19 caused the imposition of lockdown and travel restrictions. The market faced a huge loss. Many restaurants, bars, and pubs were closed during the pandemic. Additionally, the retail shops and specialty shops were closed due to rules imposed by the government. This led to a decrease in sales of craft spirits. The export and import of goods were prohibited by the various countries. This was a major restricting factor during the pandemic. Additionally, the lockdown led to the closing down of all industries. This led to a decrease in production during the pandemic. As craft spirits do not come under the emergency product, the shops were closed. While after the pandemic, all the shops and bars were open. This helps to increase the market growth. COVID-19 harmed the craft spirits market. But post-pandemic, there was an increase in demand for the craft spirits market.

REPORT COVERAGE: 

This research report on the Global Craft Spirits Market has been segmented and sub-segmented based on product type,distribution channel, & region. 

Global Craft Spirits Market - By Product type:  

• Whiskey
• Vodka
• Gin
• Rum
• Brandy
• Liqueur
• Other

Among these, the whisky segment dominates the craft spirits market. The whisky segment is expected to show its dominance over the forecasting period. This is due to the flavor it offers, which leads to an increase in demand for whisky. Additionally, whisky has some medical benefits. Whisky increases HDL, which is good cholesterol, while it decreases LDL, which is bad cholesterol. This is due to the distillers focusing on manufacturing crafted whisky with certain herbs. These herbs are increasing the taste and medical benefits. The increase in the prevalence of high cholesterol problems across the world. For instance, as per the Centre’s for Disease Control and Prevention, In the US, more than 25 million persons have total cholesterol levels that are more than 240 mg/dL. In the United States, 7% of kids and teens between the ages of 6 and 19 have high total cholesterol. The Gin segment is expected to show the fastest CAGR growth over the forecasting period. This is due to an increase in innovations in this category.

Global Craft Spirits Market - By Distribution Channel:

• On-Trade
• Off-Trade

Among these, the off-trade channel dominates the craft spirits market. The off-trade channel is expected to show dominance over the forecasting period. This is due to the presence of these products in various offline shops such as hypermarkets, supermarkets, etc. The high and easy availability of craft spirits drives segmental growth. The major population opts for off-trade because they offer many sales and discounts over the products. At the same time, the on-trade segment is expected to show the fastest CAGR growth over the forecasting period. This is due to people preferring to visit restaurants and bars.

Global Craft Spirits Market – By Region:

• North America
• APAC
• MEA
• latin America
• Europe

Regionally, the North American region dominates the Craft Spirits Market. The North American region is expected to show dominance in the market over the forecasting period. The millennial population prefers to spend their money on aesthetic products. Additionally, the secure approval policies are authorized by the government. Additionally, the rise in the number of distilleries in this region. This is to manufacture various types of craft spirits with different flavors and tastes. For instance, as per Distilled Spirits Council in February 2022, the US spirits industry generated 200 million USD in revenue. These are the factors that drive the regional market growth.

The Asia Pacific region is expected to show the fastest CAGR growth in the craft spirits market. This is due to the huge customer pool in the emerging countries in this region, such as India, China, Malaysia, Thailand, etc. The huge population base in the countries like India and China drives market growth. The millennial generation has major packaged salaries; hence they are independent to spend more money on aesthetic drinks with different flavors.

KEY MARKET PLAYERS: 

Key Market Players Of Craft Spirits Market are Pernod Ricard (France), Diageo (UK), Hotaling & Co. (US), Westward Whiskey (US), Tuthilltown Spirits (US), Woodinville Whiskey Co. (US), Rémy Cointreau (France), Rogue Ales & Spirits (US), William Grant & Sons Limited (UK), Constellation Brands, Inc. (US), Chase Distillery Ltd. (UK), Copper Fox Distillery (US).

RECENT HPPENINGS IN THE MARKET:

On 22nd June 2023, A new partnership between Niagara Falls Craft Distillers, a maker of craft spirits, and United Crafts, a Toronto-based business that owns and represents several Ontario beer and beverage companies, was revealed.