Craft Beer is Going Flat. Can Craft Spirits Continue The Insurgency?

Richard Schmidt answers Clarke Moody’s questions about the craft beer industry.






Key Takeaways

 

  • The craft beer movement in the US has enjoyed extraordinary success at the expense of Big Beer, rising from 3.6% market share by volume in 2006 to 12.3% in 2016.
  • This growth occurred for five main reasons: growing consumer interest in all things artisanal, lackluster national and regional beer brands, a more favorable regulatory environment, the relative low cost and ease of brewing on a small scale, and the social nature of beer consumption providing market momentum for “in” craft brands.
  • Craft breweries are now becoming victims of their own success as market maturation causes growth to tap out. Also, Big Beer has finally learned the mantra: If you identify a trend, ride it, don’t fight it, and acquired a number of craft breweries accordingly, further dampening independent craft beer’s growth.
  • Craft beer’s success in the US has encouraged new craft brewers to challenge beer conglomerates in markets from China to Ireland. In an analogous trend, craft spirits are gaining popularity due to many of the factors that allowed craft beer to first flourish in the US, leading some to predict that craft spirits could achieve similar market share.
  • The big alcohol conglomerates, however, will likely not again be passive in response to the threat, making the growth path for independent craft beer and spirits harder, though not impossible.

Disclosures

 

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