The global craft spirits market is estimated to grow at a CAGR of 32.61%% from a market size of USD15.289 billion in 2019 to a market size of USD83.147 billion by 2025. The crafts spirit market is propelled to grow during the forecast period due to the growing beverage industry worldwide offering innovative beverages as per the evolving market needs. The crafts spirit is a distilled spirit or a 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 flavoured 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 require at least one distilled spirit, and holds significance in several bars, hotels, and restaurants as essentials for cocktails. The evolving lifestyle of the consumers worldwide with the adoption of a modern lifestyle is providing an opportunity for the market to thrive in the forecast period. As many of the millennials reached the legal drinking age, these drinks are gaining popularity, along with the increasing purchasing power of millennials in the developing regions, and high purchasing power in the developed regions of the world. Also, these populations prefer to experiment with unique and non-conventional alcoholic beverages, further providing an impetus for surging the market growth in the forecast period.
The market, on the basis of products, is segregated into brandy, gin, whiskey, rum, flavoured liqueurs, and others. Whiskey is projected to grow to hold a significant market share in the forecast period. The major reason being that it is the most consumed product of the craft spirits, followed by gin and rum. The worldwide acceptance of gin is mainly attributed to its exceptional taste and flavour. Also, the craft distilleries focus on the utilization of varied spices, fruits, herbs, and botanicals for the production of innovative craft spirit products, propagating the market demand in the forecast period. The procurement of raw materials is mostly done from the manufacturer’s family-owned farming houses, with robust experience in the production of fruits and grains.
The growing number of craft spirit distilleries are further augmenting the market growth over the next five years.
According to the American Craft Spirits Association, the number of craft distilleries grew by 26% in 2017 in comparison to the previous year. The employment also rose in the craft spirit industry where the association data project found that over 19,000 individuals were employed full-time in the craft spirits enterprises in 2017. This was reported to grow by 47% from over 13,000 employees in the year 2016.
The number of craft distilleries jumped 26% in 2017 compared with 2016, according to an annual report, released last week, by the American Craft Spirits Association, an industry trade group.
The American Craft Spirits Association has defined a craft distillery as a distillery that values the importance of transparency in distilling and remains forthcoming regarding their utilization of ingredients, their distilling location and process, bottling location, and process, and the aging process. Also, a distillery that produces fewer than 7,50,000 gallons every year, and a distillery having an operating control over their DSP.
Growing popularity of innovative beverages around the globe is soaring the market demand in the forecast period.
Nowadays, different types of beverages are entering the market at the global level, hence, with high consumer demand for innovative beverages, these are gaining popularity with time. This is majorly due to the fact that consumers round the globe look for drinks that are more than a medium for quenching thirst. Hence, the beverage manufacturers worldwide are working on increasing their product portfolio with continuous innovations with consistent R&D efforts as per the current market demand. These beverage products help in sustaining the busy, active, and health-conscious lifestyle of a range of consumers. For this, manufacturers are experimenting with a range of infusions, beverage technologies in order to satiate the growing market demand. This is because of the fact that one-size-fits-all is no longer the followed trend and does not support the customers’ insatiable taste for different varieties of drinks. The introduction of innovative beverage dispensing technology is further contributing to fueling the market demand, as the rapid innovation in beverage dispensing technologies is holding on the interests of many consumers in consuming high-quality drinks. For example, the fountain system for handling various viscosities and yields holds importance in order to provide the best infusions such as for making a cocktail and provide a consumer with the best refreshing experience.
Geographically, the North American region is projected to hold a significant market share due to a substantial demand from the United States of America. The Asia Pacific region is accounted for holding a high CAGR in the global craft spirits industry during the forecast period.
The APAC region is poised to grow at a high CAGR owing to the growing food and beverage industry resulting in the installation of beverage vending machines due to the high demand for innovative beverages including craft spirits. The growing trend of changing living conditions and the adoption of ready-to-drink, ready-to-eat, and convenience food and drinks is further driving the market growth in this region. Vending machines business in China is growing at a significant pace, one of the reasons include the increasing number of newly installed machines attracting more customers due to payment by smartphones. This has further helped in the elimination of malfunctions with notes and theft. Also, the dense population of the millennial population is further burgeoning the market demand in the forecast period. In Japan, which is also known as the land of vending machines and has a high reputation for innovations is known for having the highest density of vending machines. In addition, the introduction of ready-to-drink whiskey beverages at the local retail is fueling the market growth during the forecast period. Furthermore, fascination for technology and automation and long working hours is adding to the success of the vending machines business in Japan, further providing an impetus for the market growth during the forecast period. The high popularity of craft spirits among the people of the North American region is one of the main reasons for the market growth. Additionally, the rising number of craft spirits distilleries offering employment to many individuals is strengthening the market growth in the forecast period. There is a substantial concentration of small, medium, and large distilleries in the region.