The Craft Spirits Market was valued at $16.54 billion in 2023 and is estimated to reach $54.94 billion by 2028, with a CAGR of 22.15% from 2023 to 2028.
One category of alcohol is spirits. Small distilleries typically make this customized alcohol. Craft liquor production requires a combination of art and science to some extent. These distilleries are individually owned and produce this kind of alcohol using real ingredients. To determine the quality of a craft spirit, one must taste, smell, or touch the drink. This aids in determining whether or not the beverage lives up to expectations. This includes determining whether or not the craft beer has been kept in a barrel long enough to be bottled. Picking the right block of grapes for wine manufacturing is one technique that goes into crafting craft spirits. Small distilleries are used to make craft spirits. This is because getting to know each batch of these handcrafted spirits is simpler and more accessible. Distilleries that specialize in craft spirits recognize the benefits of transparency. Less than 750,000 gallons are produced by these distilleries annually.
Market Drivers and Restraints:
The younger generation, those who were born between the 1980s and the early 2000s, favors a wider variety of artisan spirits. This is one of the market-moving elements for craft spirits. This group represents a sizable portion of those who frequently use craft spirits. A large portion of the enormous variety of foods and beverages, including craft spirits, appear to be purchased by millennials. The market for premium ethnic and flavored spirits, including artisan spirits, rises as a result. Craft spirits are now more in demand as a result. Craft spirits are manufactured with real ingredients and are typically made by hand. This aids in focusing on the particular market. This gives customers the option to select from a variety of alcohol flavors and types. Craft spirits' high quality can be attributed to their small-batch production, which makes it simple to produce goods of high caliber.The artisan spirits sector is expanding as a result of the rise in alcohol use. For instance, according to the World Health Organization, men consumed 19.4 liters of pure alcohol on average per person and women 7.0 liters of pure alcohol on average per person in 2016. Thus, the market for handmade spirits is expanding as alcohol consumption rises. The expansion of the restaurant and bar industries also stimulates the market. Customers benefit from this since these eateries have easy access to craft spirits. These restaurants provide a variety of craft alcoholic beverages, including beer, wine, vodka, gin, brandy, and others. Craft spirits are so readily available to consumers. Additionally, the rise in millennial generation pub visits contributes to the market's growth. These are the key determinants of the craft spirits market's expansion.
Craft spirits manufacture is subject to more government restrictions and regulations, which slows the expansion of the market. This keeps the beverages' quality intact. Moreover, taxation has increased. Certain distilleries were prohibited. They must achieve the same economies of scale as significant distilleries. Increase the cost of the beverage because of the hefty taxes. As a result, the price of craft spirits rises. Due to the fact that low-income consumers cannot afford this, there is a decline in the demand for craft spirits. The market's expansion is also slowed down by the problems with climate change. In addition, people are becoming more aware of the negative repercussions that come with increased alcohol intake. The increased usage of alcohol has negative side effects such as liver cirrhosis and malfunction. For instance, according to the World Health Organization, alcohol is the primary risk factor for premature death and disability in 10% of all fatalities among adults between the ages of 15 and 49. Craft spirits saw a decline in demand as a result. These are the things that prevent the market for handmade spirits from expanding.
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The report is segmented as follows:
The Craft Spirits Market is segmented by Product Type; the Market is segmented by Distribution Type:
By Product Type (Whiskey, Vodka, Gin, Rum, Brandy, Liqueur, Other)
By Distribution Channel (On-Trade, Off-Trade)
Regional Segmentation:
The Craft Spirits Market is dominated by the North American region on a global scale. Over the course of the projection period, the North American region is anticipated to dominate the market. The millennial generation favours purchasing aesthetically pleasing goods. The government has also given its assent to the secure approval policies. Moreover, this area is seeing an increase in distilleries. This will be used to create a variety of flavours and tastes for handmade spirits. For instance, the US spirits business made 200 million USD in sales in February 2022, according to the Distilled Spirits Council. These are the elements that fuel regional market expansion.
The craft spirits market is anticipated to expand at the quickest CAGR in the Asia Pacific region. This is a result of the sizable client base in the growing nations in this region, including Malaysia, Thailand, China, India, and China. Market expansion is fueled by the vast populations of China and India. Since the millennial generation receives substantial packaged wages, they are free to spend more money on aesthetically pleasing drinks with many flavours.
Impact of the COVID-19 pandemic on the market:
The COVID-19 outbreak had a significant impact on the food and beverage sector. Lockdown and travel restrictions were implemented as a result of COVID-19. Market losses were significant. During the epidemic, many eateries, clubs, and pubs were shuttered. In addition, due to government regulations, the speciality and retail stores were shut down. Craft spirits sales decreased as a result of this. The various nations forbade the export and import of products. This constituted a significant barrier during the pandemic. Additionally, all industries were shut down as a result of the shutdown. As a result, productivity fell during the pandemic. The stores were shut because craft spirits are not considered an emergency product. Following the pandemic, every store and bar was open. This contributes to the market's growth. The market for craft spirits was hurt by COVID-19. But after the epidemic, the market for handmade spirits saw a rise in demand.
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