Craft Spirits Market Size, Share & Trends Analysis Report By Product (Whiskey, Vodka, Gin, Rum, Brandy, Liqueur, Others), By Distribution Channel (On-trade, Off-trade), By Region, And Segment Forecasts, 2024 - 2030

Craft Spirits Market Size & Trends

The global craft spirits market size was valued at USD 21.40 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 28.4% from 2024 to 2030. Some of the primary reasons driving market expansion are rising demand for craft spirits and an increase in the number of craft distilleries, and rising disposable incomes. The millennial population with considerable purchasing power is expected to drive market growth. Craft distilleries are creating immersive experiences for customers through tours, tastings, and cocktail classes, that help to build brand image and encourage repeat business. Also, the online boom has made it easier than ever for consumers to discover and purchase artisanal spirits from all over the world. This not only allows small distilleries to expand their reach but also helps them gain a loyal following on a global scale.

Licensed distillers with a set production volume make craft spirits. They should have separate operations with less than 25% capital from an alcoholic beverage sector player and operational control. The product must have a label certified by the Alcohol and Tobacco Tax and Trade Bureau in the United States (TTB). Due to the large demand in the United States, the sector is primarily centered in North America. Due to advantageous approval regulations, investments in the United States have expanded at a promising rate in recent years. In 2012, the Alcohol and Tobacco Tax and Trade Bureau (TTB) received 13,867 new applications, up 24.4 percent from 2009 and 82 percent from 2006.

Furthermore, Millennials, those born between the 1980s and the early 2000s, make up a considerable demographic of alcoholic beverage consumers, as they make up a large portion of those who frequently visit restaurants and pubs. They appear to be the most powerful buyers of a wide range of foods and beverages, including craft spirits. Moreover, many craft distilleries have closed their tasting rooms in the last few months to comply with local and state public health guidance and to protect their employees. The craft beer industry is constantly evolving, fueled by innovation, experimentation, and a passion for creating delicious and unique brews.

According to a survey of nearly 300 American distilleries conducted by the Distilled Spirits Council of the United States (DISCUS) and the American Distilling Institute in august 2021. And, as one might assume, the number of customers for those who could open securely was restricted. As a result, over 40% of craft distilleries reported a significant decrease in on-site sales (i.e., 25% or more). More than a quarter of respondents claimed their tasting rooms were entirely closed. Besides, shift towards locally-sourced and sustainable products along with rising consumer interest in craft and premium beverages will boost the craft liquor market growth.

Despite COVID-19 negative impact in 2020, the market for craft spirits continues to increase, according to the US Craft Spirits Association. Surprisingly, the most steadfast product domain that was unaffected by the pandemic was booze. Between August 2020 and August 2021, the number of craft distilleries increased by 1.1%. In 2020, the market is expected to generate revenues of more than USD 5 billion. In terms of market suffering, the numbers demonstrate resiliency. Craft distilleries are increasingly collaborating with each other, creating limited-edition releases and sharing knowledge.

Market Concentration & Characteristics

The growth of this market can be attributed to increasing consumer spending on innovative flavor combinations and high-quality ingredients. However, the rapidly changing consumer taste preferences and needs encourage manufacturers to innovate, improve, and diversify their product offerings to meet the changing demands of consumers worldwide.

Companies focus on strategic acquisitions to expand their presence overseas and reinforce their position in the market. Over the next few years, internationally reputed companies are likely to acquire small-and medium-sized companies operating in the industry in a bid to facilitate regional expansion.

The craft liquor industry is subject to a complex set of federal, state, and local regulations. Navigating complex licensing and distribution regulations can be a major obstacle for small craft distilleries. Streamlining regulations and promoting local distribution channels can foster further growth. Furthermore, the transition to sustainable production would also mean substantial investments in sourcing sustainable ingredients and raw materials owing to the change in the process of craft spirits manufacturing process.

Product Insights

The whiskey segment led the market and accounted for a 44.5% share of the global revenue in 2023. The growth of this segment is due to the extraordinary and one-of-a-kind flavor that the mentioned product domain provides. Whiskey has been able to deliver certain medical benefits as a result of product developments over the years. Distillers are increasingly adding a variety of herbs and spices to lengthen the offering for both taste and medical purposes. Moreover, whiskey contains a lot of polyphenols, an antioxidant that has been shown to lower LDL (bad cholesterol) and raise HDL (good cholesterol). Around 51% of persons in the U.S. have dangerously high cholesterol, which whiskey can assist with.

The gin segment is anticipated to grow at the fastest CAGR of 31.5% from 2024 to 2030. Brands are increasing their consumer appeal by including regional botanicals, aged expressions, new flavors, and other innovations. While the average retail price of a 750ml bottle of gin sold in the United States last year was USD16.77, the average artisan gin retails for more than USD 30.

Distribution Channel Insights

Off-trade sales of craft spirits are expected to grow at a CAGR of 29.8% from 2024 to 2030. Hypermarkets, supermarkets, convenience stores, micro-markets, and wine and spirit shops all fall into this category. People choose these establishments because they provide substantial discounts and exclusive incentives.

The on-trade sales channel accounted for the largest market revenue share of 57.4% in 2023. It is due to the opening of restaurants, bars, and pubs, as well as a variety of other ancillaries, whose sales have increased significantly following vaccination and the opening of economies. Furthermore, customers prefer to drink craft spirits in locations where they can connect and bond with other students, and liquor has been related to the overall ambiance.

Regional Insights

The North America craft spirits market made the largest contribution to the global revenues, with a share of 59% in 2023. The regional market also accounted for a volume share of nearly 60% during this period. Over the forecast period, the region's growing millennial population is expected to drive demand. Because of secure approval policies developed by regulatory bodies, the number of manufacturers in the United States has increased at a rapid rate.

The Asia Pacific craft spirits market is expected to witness a CAGR of 35.1% from 2024 to 2030. The region’s market growth can be attributed to the growing consumer purchasing power and the millennial generation across emerging nations such as China, India, Malaysia, Thailand, and Indonesia. The craft spirits market in Asia Pacific is predicted to grow at the fastest CAGR from 2024 to 2030. Huge potential in these countries' underdeveloped marketplaces is likely to provide lucrative opportunities in this region.

In addition, in Asia Pacific, economically independent millennials are living with their parents, giving them more spending power. As a result, millennials in countries like China and India prefer to spend more on leisure activities, which is expected to have an impact on the region's craft spirit market.

India craft spirits market

The craft spirits market in India is expected to grow at a CAGR of 35.6% from 2024 to 2030, as a result of factors such as increasing disposable income, improving quality of life, and willingness to spend more on premium alcoholic beverages. Craft distillers are drawing inspiration from India's rich culinary heritage, incorporating local herbs, spices, and fruits like kokum, bael, and jamun into their spirits. This creates products with distinctly Indian flavors that resonate with local audiences.

U.S. craft spirits market

The craft spirits market in the U.S. is projected to grow at a CAGR of 29.4% from 2024 to 2030. Craft distillers are constantly experimenting with new ingredients, techniques, and aging processes, leading to a diversity of offerings and unique flavor profiles. This continuous innovation keeps the U.S. craft spirits industry exciting and attracts new consumers.

Philippines craft spirits market

Government initiatives to simplify licensing and distribution are making it easier for small distilleries to enter the craft spirits market in the Philippines, fostering competition and diversity. As the Philippines' tourism industry recovers, craft spirits offer a unique way to showcase local flavors and cultural experiences, attracting international visitors.

Key Companies & Market Share Insights

The global craft spirits market is characterized by the presence of a few well-established players such as Heaven Hill Distilleries Inc, Diageo plc, Pernod Ricard, Constellation Brands Inc., Suntory Holdings Limited, Bacardi Limited, Campari Group, Sazerac Company Inc., Highwood Distillers, and Rogue Ales. The market players face intense competition from each other as some of them are among the top craft spirits manufacturers with diverse product portfolios for craft spirits. These companies have a large customer base due to the presence of established and vast distribution networks to reach out to both, regional and international consumers.

Recent Developments

• In March 2022, Diageo, the world's largest beverage alcohol company, revealed today plans for a new USD 245 million distilleries to support its Crown Royal Canadian Whisky brand's momentum and growth objectives. It will use resource efficiency technology and run on 100 percent renewable energy to ensure that the new distillery is carbon neutral and produces no waste for landfill

• In March 2022, Diageo plc launched its latest manufacturing complex, which features two high-speed can lines, with the ability to make over 25 million cases of malt-based beverages and spirits-based Ready-to-Drink (RTD) cocktails.

• In February 2022, Heaven Hill announced the acquisition of ‘Samson & Surrey’ including Widow Jane, Few Spirits, Tequila Ocho, Bluecoat Gin, Mezcal Vago, and Brenne French Whisky. Heaven Hill's portfolio will be bolstered by high-growth, super-premium brands in several of the industry's fastest-growing categories as a result of the acquisition.

Craft Spirits Market Report Scope

Global Craft Spirits Market Report Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global craft spirits market report on the basis of product, distribution channel, and region:

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Whiskey

  • Vodka

  • Gin

  • Rum

  • Brandy

  • Liqueur

  • Others

• Distribution Channel Outlook (Revenue, USD Million, 2018 - 2030)

  • On-Trade

  • Off-Trade

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • Spain

    • Italy

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia & New Zealand

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • South Africa

    • UAE