Craft Beer Market

Market Overview:

The global craft beer market size reached US$ 117.1 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 221.5 Billion by 2028 exhibiting a growth rate (CAGR) of 10.8% during 2023-2028. The increasing demand for low-alcohol beverages, the rising health consciousness among consumers, and the inflating disposable incomes are key factors driving the market.

The Increasing Demand for Low-Alcohol Beverages Augmenting the Market Growth

The increasing demand for low-alcohol beverages has emerged as a significant driver for the growth of the craft beer market. As consumers become more health-conscious and seek alternatives to traditional alcoholic beverages, low-alcohol options have gained popularity. Craft beer, known for its unique flavors and brewing techniques, has tapped into this growing trend by offering a wide range of low-alcohol options to cater to a diverse consumer base. One of the key factors driving the demand for low-alcohol craft beers is consumers' changing lifestyles and preferences. Many individuals are opting for healthier lifestyles, which include reducing alcohol consumption. Low-alcohol craft beers, typically containing less than 3-4% alcohol by volume (ABV), provide an attractive alternative to higher-alcohol beverages while still delivering the rich flavors and complexities associated with craft brewing. Moreover, the rise of mindful drinking and moderation movements has influenced consumer behavior. As a result, people are increasingly seeking options to enjoy the social aspects of drinking without the adverse effects of excessive alcohol consumption.

Low-alcohol craft beers fit well into this paradigm, offering a balanced and controlled drinking experience. The craft beer industry has responded to this demand by embracing innovation and creativity in low-alcohol brewing. Brewers are experimenting with ingredients, processes, and techniques to create flavorful and refreshing low-alcohol beers that appeal to a broad range of tastes. This emphasis on quality and variety has attracted consumers who may have previously been disinterested in traditional beer offerings. Additionally, the growing popularity of low-alcohol craft beers can be attributed to the expanding consumer base, which includes individuals new to beer or those who typically prefer other types of alcoholic beverages. Craft breweries have effectively marketed their low-alcohol options as a gateway into the beer world, appealing to a broader audience and expanding their customer base.

Competitive analysis such as market structure, market share by key players, player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. The market structure is fragmented with a large number of small and large players operating in the industry due to a growing preference for low alcohol-by-volume beverages and product innovations. The volume of new entrants is moderate in the craft beer industry due to the expansion of distribution channels through e-commerce and the high market growth rate.

What is Craft Beer?

Craft beer is a kind of beer that is manufactured by independent breweries that prioritize quality, flavor, and innovation. It is a departure from mass-produced beers made by large commercial breweries. It is a booming industry that has captured the hearts and palates of beer enthusiasts worldwide. Unlike mass-produced beers, craft beer is brewed by independent breweries focusing on quality, flavor, and creativity. It returns to traditional brewing methods and emphasizes local ingredients, small-scale production, and unique recipes. Craft breweries are famous for their experimentation and innovation, constantly pushing the boundaries of what beer can be. They offer various styles, from classic ales and lagers to more adventurous creations like fruity IPAs, barrel-aged stouts, and sour beers. Craft brewers often draw inspiration from global beer traditions while putting their spin on the recipes, resulting in a diverse and exciting beer landscape. One of the defining characteristics of craft beer is the emphasis on using high-quality ingredients. Craft brewers prioritize sourcing local grains, hops, and yeast to create beers that showcase the flavors of their region. This commitment to quality extends to the brewing process, with many craft brewers handcrafting their beers in small batches and paying meticulous attention to detail at every step.

COVID-19 Impact:

The global economy has faced severe setbacks due to the COVID-19 pandemic. Governments worldwide have implemented measures like lockdowns, social distancing, and quarantine to combat the virus, resulting in adverse effects on various industries. For example, craft beer consumption has witnessed a significant decline as a direct consequence of the lockdowns imposed by governments globally to contain the spread of the virus. Craft beer's success in recent years has been closely tied to the on-premise experience, with brewery taprooms becoming popular among local operators. However, many breweries, significantly those heavily reliant on taproom models with limited retail distribution, have been severely impacted. Movement and operational restrictions imposed by governments have crippled their business, leading to underperformance in craft beer sales, primarily driven by on-premise consumption. As a result, craft breweries have shifted their focus to off-premise purchases, including increased demand for multipacks and packaged products to cope with the loss of on-premise sales. However, many small breweries lack the production capabilities to meet these demands. Consequently, some craft breweries have been forced to close down, while others have resorted to extreme cost-cutting measures such as staff layoffs to stay afloat.

On the other hand, off-premise craft beer sales have rallied during the pandemic, experiencing significant growth. The "Sit Home and Booze" culture that emerged during the pandemic has contributed to a surge in off-trade distribution, with physical stores and online platforms witnessing soaring alcohol sales within the global craft beer market. Craft breweries have taken advantage of this trend by establishing off-site and home delivery channels, complementing their on-site premises, and generating additional revenue. As the COVID-19 situation improves and activities gradually resume while lockdown measures ease worldwide, the craft beer market is expected to regain its previously elevated consumption levels. Although some limitations may remain for food service outlets, the market is anticipated to rebound as consumers regain confidence and seek out craft beer's unique experiences and flavors.

Craft Beer Market Trends:

The craft beer market has experienced significant growth worldwide, driven by factors that have reshaped consumer preferences and the beer industry. One of the primary drivers of the craft beer market's growth is the desire for flavor and diversity. Craft breweries offer various beer styles, flavors, and innovative creations that appeal to consumers seeking unique taste experiences. Craft beer enthusiasts are drawn to the wide variety of options available, allowing them to explore different styles and discover new favorites. Furthermore, there has been a notable increase in consumer education and sophistication regarding beer. Beer enthusiasts are becoming more knowledgeable about brewing processes, ingredients, and beer styles. This growing understanding and appreciation for beer has created a demand for high-quality craft beer. The shift towards supporting local businesses and products has significantly impacted the craft beer market. Consumers are increasingly drawn to the authenticity, craftsmanship, and sense of community associated with local and independent breweries. Craft beer allows consumers to connect with their local culture and support small-scale production, contributing to the growth of the craft beer industry. This, in turn, is positively influencing the market.

The preferences and habits of millennials have played a crucial role in driving the growth of the craft beer market. This demographic values authenticity, unique experiences, and supporting independent businesses. Craft beer aligns with these values, making it a popular choice among millennials willing to explore and experiment with new flavors and brands. The rise of social media and digital marketing has significantly contributed to the visibility and accessibility of craft beer. In some regions, regulatory changes have facilitated the growth of the craft beer market. Government policies that support small-scale breweries reduce barriers to entry, and encourage entrepreneurship have created a favorable environment for craft beer producers to thrive. This has resulted in increased competition, innovation, and market expansion. The rise of beer tourism has positively impacted the craft beer market. Travelers increasingly seek destinations with vibrant craft beer scenes, visit breweries, attend beer festivals, and explore local beer culture.

This tourism-driven demand has not only boosted local craft breweries but also contributed to the overall growth of the craft beer industry. As consumer preferences evolve, the craft beer market is expected to expand further, providing opportunities for new breweries, innovative flavors, and an enriching beer experience.

Key Market Segmentation:

IMARC Group provides an analysis of the key trends in each sub-segment of the global craft beer market report, along with forecasts at the global, regional and country level from 2023-2028. Our report has categorized the market based on product type, age group and distribution channel.

Product Type Insights:

• Ales
• Lagers
• Others
   

The report has provided a detailed breakup and analysis of the craft beer market based on the product type. This includes ales, lagers, and others. According to the report, lagers represented the largest segment. Lagers are brewed and conditioned at relatively cold temperatures. They have more carbonation and less bitter taste as compared to ales. Lagers are commonly distinguished as pale, amber, and dark, wherein pale lager is the most preferred type of beer.  Nowadays, several manufacturers are introducing lagers with low-alcohol content and lesser calories, which is escalating the product demand among health-conscious consumers. Moreover, the introduction of premium lagers and the rising product adoption in bars, restaurants, pubs, and hotels are further driving market growth.

Age Group Insights:

• 21-35 Years Old
• 40-54 Years Old
• 55 Years and Above
   

A detailed breakup and analysis of the craft beer market based on the age group have also been provided in the report. This includes 21-35 years old, 40-54 years old, and 55 years and above. According to the report, 21-35 years old accounted for the largest market share. The 21-35 years old age group is the most influential age group, which is propelling the evolution of the craft beer industry. This age group has been the prime customer of craft beer. Moreover, flavored beer is more popular among female consumers in this age group. The rising number of millennials and the growing trend of home parties and social gatherings are also fueling market growth.

Distribution channel Insights:

• On-Trade
• Off-Trade
   

The report has provided a detailed breakup and analysis of the craft beer market based on the distribution channel. This includes on-trade and off-trade. According to the report, on-trade accounted for the largest market share. The on-trade distribution channel includes bars, restaurants, coffee shops, clubs, and hotels. The managers of these outlets and professionals like bartenders and waiters play a crucial role in the sale process. In recent years, consumers have been shifting toward a more comfortable and lavish experience provided by on-trade premises like brewpubs, tasting rooms, and tiki bars. This is also fostering the growth of the market.

Regional Insights:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa.  According to the report, Europe was the largest market for craft beer. The growing consumption of flavored brews, especially in the UK and Germany, has escalated the demand for craft beer. Furthermore, several leading manufacturers in the region are introducing innovative beer flavors and investing in creative advertising campaigns to expand their product portfolio. Along with this, the establishment of new breweries and the increasing willingness of consumers to spend more on alcoholic beverages with improved tastes are catalyzing market growth.

Competitive Landscape:

The report has also provided a comprehensive analysis of the competitive landscape in the global craft beer market. Some of the companies covered in the report include:  

• Anheuser-Busch InBev SA/NV
• Bell's Brewery Inc.
• Constellation Brands Inc.
• D.G. Yuengling & Son Inc.
• Diageo Plc
• Duvel Moortgat
• Heineken NV
• New Belgium Brewing Company Inc.
• Oskar Blues Brewery LLC
• Sierra Nevada Brewing Co.
• Stone & Wood Brewing Co. (Lion Brewery Co)
• The Boston Beer Company Inc.
   

Please note that this only represents a partial list of companies and the complete list has been provided in the report. 

Report Coverage:

Key Benefits for Stakeholders:  

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the craft beer market from 2017-2028.  
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global craft beer market.  
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region. 
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the craft beer industry and its attractiveness. 
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.