The global craft spirits market was valued at USD 17,434.1 million in 2022. It is expected to reach USD 43,206.49 million by 2031, growing at a CAGR of 10.61% during the forecast period (2023–2031). The increasing demand for non-GMO, ready-to-drink cocktails and spirits based on homemade spirits can be attributed to the premiumization and inventive packaging. North America is anticipated to increase at a CAGR of 9.35% over the projected period, making it the largest revenue contributor.
The term craft refers to a particular kind of production, a level of quality, or anything other than a marketing position. Craft spirit has no accepted definition; it is more of a trade term. The general description of a craft spirit is made by a small distillery by hand using materials and ingredients that have been processed locally. Craft spirits are made from fruit infusions and distinctively flavored spirits that differ from what is typically consumed. Customers primarily view it as a luxury good.
The enormous liquor market, closely watched by major players for the past ten years, has recently seen a shift in consumer preferences. Customers favor niche brands or those that can offer a more opulent experience and a product with authenticity, personality, and storytelling. It has enabled smaller brands to carve out a niche in the market under investigation. With the growth of the craft spirits market over the years, the segment has also seen brands venture into cutting-edge packaging designs that help them stand out from the competition. Consumers are frequently persuaded to try a product by appealing spirit bottles and marketing materials that catch their attention on the shelf. As this continues to be an essential tool for drawing customers' attention and fostering product loyalty, brands operating in the segment are investing in marketing and branding from the start.
The market under study depends on government policies. Due to tax and excise duty obstacles, micro-distilleries were not allowed in several artisan spirit markets. These distilleries must gain the same economies of scale as major international producers. This means they will be less likely to continue operating if they pay the same excise duty. Craft spirit associations lobby to lower small-scale producers' taxes. Government-run off-licenses cannot sell mid- and high-strength liquor due to a monopoly (as was the case in Scandinavia). The "Safe Food for Canadians Regulations" (New Traceability Rules for Craft Alcohol) of the Canadian Food Inspection Agency (CFIA) went into effect in January 2019 and have already affected several craft producers of beer and spirits. New traceability guidelines aim for greater transparency in record-keeping and product labeling to increase consumer confidence and traceability in the event of product recalls or market-restricting hazards.
The most significant trend affecting the global market for alcoholic beverages is premiumization. As a result, the number of craft producers and brands has skyrocketed across almost every industry. Consumers are willing to pay more for a product that offers an authentic experience. This is related to the trend for craft spirits, fueled by the growth of brewpubs and a rise in consumer interest in manufacturing. With some notable launches in the last year or so, the RTD cocktail market is a vibrant category moving in a more premium direction. In addition to the rapidly expanding trend of pre-mixed stiff drinks, more regional craft spirits producers are producing bottled or canned cocktails. The modern cocktail movement is still taking over Europe.
The demand for non-GMO alcohol products, including craft spirits, is primarily driven by the consumer's rising disposable income and their perception that they are drinking alcohol of higher quality in the United States, Canada, and the United Kingdom. According to the non-GMO Project, 36% of US consumers were more likely to purchase products that had been non-GMO Project verified. The rate is anticipated to increase during the forecast period, encouraging more players to invest in this sector strategically. For instance, Tattersall Distilling, a craft distillery, announced the release of its Organic Vodka in 2020. Tattersall obtained and mills its organic grain from an independent family farm 87 miles away that is USDA-certified, non-GMO, and gluten-free. The outcome is a handmade, organic, and even higher-quality vodka that is smoother and more neutral in flavor. Spring44 Distilling, NEFT, and other small-batch producers of non-GMO craft spirits are examples.
| Study Period | 2019-2031 | CAGR | 10.61% |
| Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
| Base Year | 2022 | Base Year Market Size | USD 17,434.1 Million |
| Forecast Year | 2031 | Forecast Year Market Size | USD 43206.49 Million |
| Largest Market | North America | Fastest Growing Market | Asia-Pacific |
The global craft spirits market is segmented by region into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
North America is the most significant revenue contributor and is expected to grow at a CAGR of 9.35% during the forecast period. Due to the trend toward experimental drinking, craft spirits are becoming more and more popular. Craft distilling is no longer a specialized industry in the United States. Nearly 2,000 distilleries operate nationwide, with the west coast having the highest concentration. It is a multi-million-dollar market. Market share, total sales, revenue, investments, and employment are all rising quickly. Countless craft cocktail bars and consumers' thirst for high-end, limited-edition spirits releases contribute to the country's market growth; local supermarkets team up with craft spirits producers to introduce exclusive product lines. For instance, Hall of Fame Spirits® proudly announced its new partnership with Kroger Company 2017, one of the country's largest supermarket chains. This will enable them to sell their handcrafted, ultra-premium, small-batch vodka in shops.
Asia-Pacific is expected to grow at a CAGR of 10.98% during the forecast period. Baijiu, a traditional Chinese spirit, is in high demand in China on the market for craft spirits. Additionally, premium craft spirits like Moutai, Chivas, and Martell are prevalent on Chinese tables. Whiskey, vodka, and brandy are noted as having potential prominence in demand in the western craft spirit font. JD, Taobao/Tmall, and Meituan are some of China's most well-known online retail channels for selling craft spirits. Moutai for baijiu, Martell for brandy, Absolut for vodka, Chivas for whisky, and Bacardi for rum are well-known in the Chinese craft spirits market.
Europe is expected to grow significantly over the forecast period. Consumers have more money to spend on luxury items and are more willing to try craft spirits with novel, distinctive flavors, and colors. There has been an increase in the demand for craft spirits in the United Kingdom over the study period. Due to the country's rising craft spirits consumption, many consumers are splurging on these products in off-trade channels like supermarkets, hypermarkets, and specialty shops. The nation's leading supermarket and hypermarket chains have been collaborating with independent distilleries to expand the product selection on their shelves to meet the growing demand. To eliminate the middleman and increase their profits, the major supermarket chains have also begun introducing their craft spirits brands under private labels.
In Brazil, the market for craft spirits is expanding due to consumer preferences changing and rising demand for handcrafted, small-batch drinks with distinctive flavor profiles. The rising proportion of younger demographics encourages the market for these beverages in Brazil. As the economy expands, consumers have more freedom and can now afford to purchase handcrafted alcoholic beverages. Craft spirits are becoming increasingly popular, and one of the main factors is their suitability as an ingredient in various drinks and consumers' interest in gin cocktails. Gin is a spirit category constantly growing, evolving, and innovating in terms of its products, producing areas, and consumers.
Tanzania, Ghana, Kenya, Uganda, Nigeria, and Zambia are a few of the major nations that have a sizable share of the revenue in the South African segment. Craft spirits consumption has increased significantly in these nations, driving the segment's market sales. Also, due to the increased consumption, well-known market players see increased craft spirits sales. However, in terms of demand, urban upper- and middle-class consumers in the Rest of the MEA region consume the most craft spirits. Additionally, consumption of imported spirits, which are about 50% more expensive than readily available alcoholic beverages, is concentrated in urban areas and is not as widely dispersed.
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The global craft spirits market is segmented by type and distribution channel.
Based on type, the global craft spirits market is bifurcated into whiskey, gin, vodka, brandy, and rum.
The whiskey segment is the highest contributor to the market and is expected to grow at a CAGR of 9.77% during the forecast period. Due to increasing consumer interest in craft spirits and a growing preference for high-end goods made with high-end ingredients, the demand for craft whiskey has grown. To guarantee quality and exclusivity, the major market participants in this niche have been releasing their products in small batches. The major market players have been diversifying their product lines to meet the growing demand for craft spirits.
Like craft vodkas, vodka consumers are increasingly interested in novel products with distinctive flavors and tastes. This is anticipated to fuel the market's growth over the forecast period. Food companies have been encouraged to expand their business operations by entering the alcoholic beverage market due to the rising demand for potato vodka on a global scale. The major players in the market produce vodka using the same potatoes used to make foods and snacks. Due to the growing consumer demand for clean-label and sustainable products, there has also been an increase in the demand for fully sustainable vodka over the past few years.
Based on distribution channels, the global craft spirits market is bifurcated into on-trade and off-trade channels.
The on-trade channel segment owns the highest market and is expected to grow at a CAGR of 8.37% during the forecast period. The on-trade channels segment controls a sizeable portion of the market, which includes pubs, bars, restaurants, and distilleries. Throughout the study, it was discovered that restaurants, bars, and pubs with a wide selection of exciting and unique craft spirits have a better chance of attracting customers in the future. However, in nations like Egypt, Indonesia, Israel, Saudi Arabia, Somalia, and Yemen, among others, pubs, bars, and restaurants face significant barriers to growth because of prohibitive costs and limiting licensing policies. These elements are anticipated to restrict this market segment's overall development over the forecast period.
Supermarkets/hypermarkets, online retail, wholesale clubs, and specialty shops are just a few off-trade channels that were looked at in the market context. A significant portion of the global sales of craft spirits is made through these channels. Due to a significantly wider variety of products being offered, enormous price discrepancies compared to the craft spirits sold in on-trade channels, and the convenience of buying craft spirits through these channels, this market has been expanding quickly.
