Craft Spirits Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The craft spirits market is projected to register a CAGR of 10.51% during the forecast period, 2022-2027.

Most global distillers offering craft spirits have reported sharp negative packaged sales as ​COVID-19 restrictions have heavily impacted craft distillers. On-site tasting room sales have been particularly vulnerable. Over 50% of craft distillers in the United States reported a significant impact on their tasting room sales. Approximately 40% of craft distillers reported that their on-site sales were down by 25% or more. Over 15% said their tasting rooms were wholly shut down in 2020, as per the American Distilling Institute and Distilled Spirits Council, US data.

The demand for ethnic premium, super-premium, and flavored spirits, which include craft and artisanal varieties, increased among global consumers. This increased demand fuelled the growth of the craft spirits market during the study period. The craft spirits boom led to the introduction of many new products that have successfully carved out a niche for themselves by leveraging package designs that promise quality through evocative design and hand-crafted sensibilities.

People are becoming more conscious and inclined to step out of their comfort level, which is why major producers are modifying and innovating by creating accessible, fun, and delicious spirits with innovative packaging. Thus, beverage professionals have been incorporating these spirits in cocktails through creative applications to cater to the rising demand from consumers.

Key Market Trends

Growing Preference for Innovative Flavors

With the current trend of having flavored whiskey, pubs, bars, and restaurants that offer innovative and distinctive ranges of flavored craft spirits have a higher chance of garnering demand. Crafts spirits are easily accessible in the market, including gin, rum, brandy, tequila, whiskey, and flavored liqueurs. Consumers prefer products made up using natural or organic flavors such as natural spices, botanicals, fresh citrus flavors, vanilla, and raspberry. However, various small-scale brands are promoting and marketing clean label ingredients like non-GMO grains and spring water and broadcasting their mission-driven initiatives in their local associations. The growing trend of drinking liquor, especially in social or corporate gatherings, is accelerating the growth of the crafts spirit market. Craft spirits such as whiskey have been witnessing widespread growth due to their popularity in bars. The trend of having innovative, fresh flavored craft spirit in high quality and product craftsmanship is boosting the growth of the craft spirits market.

North America Leading the Global Market

North America held the largest share due to the growing demand for craft spirits and the rising number of craft distilleries across the region with frequent product launches. Also, the growing number of craft distillers in the region, along with the rising demand for ethnic premium and super-premium spirits, including craft and artisanal varieties, is prompting several countries to import the same, further fueling the market’s growth in the region. As per the report published by the US Department of Commerce, the United States alone invests more than USD 230 billion annually in alcoholic beverages. The US craft spirits market is growing significantly as several giant manufacturers are offering innovative, creative cocktails with craft spirits and producing super-premium tequila and vodka due to the increasing “cocktail culture” in the country.

Competitive Landscape

The market is highly competitive with the presence of key players, such as Rémy Cointreau, William Grant & Sons Limited, Pernod Ricard, Diageo PLC, and Rogue Ales & Spirits. The major strategies adopted by the companies operating in the craft spirits market are product innovations, mergers and acquisitions, and expansion. However, the growing demand for craft spirits is expected to be the main trend over the forecast period, which may increase the market’s activity. Advanced distribution network and manufacturing expertise give an upper edge to the manufacturers to expand their range of products worldwide.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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