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Strategy Briefing

Craft Spirits: Distilling the Facts Behind the Buzz

44 pages, Jun 2018

US$1,325

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

Craft spirits are becoming increasingly widespread across a range of markets as interest for artisanal products grows in the wake of shifting lifestyle trends. But just how big is the craft spirits market? And what are the challenges facing craft producers, and the spirits industry as a whole? We explore the key issues impacting the craft spirits market, not least by trying to better understand what ‘craft’ actually means, while also exploring the parallels and divergences with craft beer.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

There is no consensus on how to define craft spirits, but common themes exist

Many trade associations exist representing the interests of micro-distillers, but they each define “craft” in a different way. There are some common themes across definitions, however; namely quantity of production and independent ownership.

Craft spirits are most prevalent in mature markets of Western Europe, North America, Africa and Australasia

The market share of craft spirits remains very small. The most developed market, and the market where the trend began, is the US, with a 2.6% volume share of the overall spirits market. Gin, vodka and whiskies are the biggest categories within craft spirits, as well as local country-specific liqueurs.

Underlying lifestyle trends are shaping the rise of craft spirits

The convergence of lifestyle trends in certain markets has led to the growth of craft spirits, notably the rise of the hip urbanite culture in much of the West, as a reaction against mainstream and corporate offerings and a desire for originality.

Tax incentives and lifestyle trends will help to further propel craft spirits

The growth of interest in locally-produced, authentic products across a range of categories favours the further growth of craft spirits. Furthermore, tax incentives in certain markets will also facilitate the creation of new micro-distilleries.

The erosion of the term “craft” could limit growth

A lack of consensus on a range of issues, including the use of bulk spirits, the definition of hand-made and the quantity of production, could erode the term “craft”, and subsequently, consumer confidence in craft spirits.

Ultimately, craft spirits are unlikely to reach the same level of market penetration as craft beer

The relative expense of setting up a micro-distillery and the time to get spirits, especially brown spirits, to market, are key barriers to growth. Also, the fact that industrial producers are now creating interesting stories around their brands and producing spirits with complex taste profiles means craft spirits will find it harder to differentiate.

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Introduction

Scope

Craft spirits: key findings

Objectives

Global volume growth rates for spirits are picking up

Tequila, gin and whiskies are the fastest growing categories

What are Craft Spirits?

The US and Canada

South Africa and Scotland

There is no industry consensus on what “craft” means

Beyond industry definitions: the view from the consumer side

Which Factors Helped Craft Spirits to Develop?

Lifestyle factors have helped give rise to craft spirits

This is reflective of certain underlying megatrends

Premiumisation : the power to spend more on the things that matter

Premiumisation has helped fuel the growth of craft spirits

Ethical living is increasingly being prioritised by consumers

Where are Craft Spirits Most Prominent?

Selected key craft spirits markets: 2017 volume estimates

North America: US

North America: Canada

Western Europe: UK

Western Europe: Germany

Western Europe: Finland

Western Europe: Norway, Denmark and Sweden

Middle East & Africa: South Africa

Australasia: Australia

Asia Pacific: Singapore

Asia Pacific: Japan

How will Craft Spirits Evolve?

White spirits in the short term, brown spirits in the long term

The lifestyle aspect of craft spirits gives further impetus for growth

Asia Pacific shows the most promising value growth for spirits

Interest in craft is growing rapidly in Asia Pacific

Brewery-distillery hybrids are a way for micro-brewers to expand

Multinationals are acquiring successful micro-distilleries

Multinational brands are also adapting their positioning

Micro-distillers are likely to form trade associations to lobby on tax issues

Craft spirits faces challenges which craft beer did not

The erosion of the term “craft” is the biggest barrier to growth (1)

The erosion of the term “craft” is the biggest barrier to growth (2)

Craft spirits: looking to the future

Report Definitions

Definitions and terminology

Why buy this report?

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Megatrends

Strategy Briefing

Craft Spirits: Distilling the Facts Behind the Buzz

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

There is no consensus on how to define craft spirits, but common themes exist

Craft spirits are most prevalent in mature markets of Western Europe, North America, Africa and Australasia

Underlying lifestyle trends are shaping the rise of craft spirits

Tax incentives and lifestyle trends will help to further propel craft spirits

The erosion of the term “craft” could limit growth

Ultimately, craft spirits are unlikely to reach the same level of market penetration as craft beer

Want to find out more about this report?

Table of Contents

Introduction

Scope

Craft spirits: key findings

Objectives

Global volume growth rates for spirits are picking up

Tequila, gin and whiskies are the fastest growing categories

What are Craft Spirits?

The US and Canada

South Africa and Scotland

There is no industry consensus on what “craft” means

Beyond industry definitions: the view from the consumer side

Which Factors Helped Craft Spirits to Develop?

Lifestyle factors have helped give rise to craft spirits

This is reflective of certain underlying megatrends

Premiumisation : the power to spend more on the things that matter

Premiumisation has helped fuel the growth of craft spirits

Ethical living is increasingly being prioritised by consumers

Where are Craft Spirits Most Prominent?

Selected key craft spirits markets: 2017 volume estimates

North America: US

North America: Canada

Western Europe: UK

Western Europe: Germany

Western Europe: Finland

Western Europe: Norway, Denmark and Sweden

Middle East & Africa: South Africa

Australasia: Australia

Asia Pacific: Singapore

Asia Pacific: Japan

How will Craft Spirits Evolve?

White spirits in the short term, brown spirits in the long term

The lifestyle aspect of craft spirits gives further impetus for growth

Asia Pacific shows the most promising value growth for spirits

Interest in craft is growing rapidly in Asia Pacific

Brewery-distillery hybrids are a way for micro-brewers to expand

Multinationals are acquiring successful micro-distilleries

Multinational brands are also adapting their positioning

Micro-distillers are likely to form trade associations to lobby on tax issues

Craft spirits faces challenges which craft beer did not

The erosion of the term “craft” is the biggest barrier to growth (1)

The erosion of the term “craft” is the biggest barrier to growth (2)

Craft spirits: looking to the future

Report Definitions

Definitions and terminology

Why buy this report?

Want to find out more about this report?

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