Demand for craft spirits in the US shows no sign of slowing

By Helen Gilbert

Published: 24 October, 2018

The appetite for craft spirits in the United States - arguably the nation behind the boom in craft drinks worldwide - still packs a major punch new research suggests.

The research, published in the IWSR US Craft Spirits Report 2018, revealed an extra 1.5m nine-litre cases contributed to 31.1% of the total spirits growth in the US last year.

Craft spirits – which account for 3.3% of the total US spirits market – continue to significantly outperform the overall industry in terms of both volume and value growth, the report stated.

Between 2010 and 2017, the CAGR for overall spirits volume was 2.8%, compared to 25.8% for craft spirits, while forecasts for 2022 predict that total spirits volumes should perform at a CAGR of 2.1% against craft’s 22%, the IWSR paper stated.

Craft whisky made up 36.9% of the overall category growth in 2017 with 580,000 nine-litre cases added to the market. Other craft categories that contributed significantly to the growth of their parent categories included vodka (51.6%) and brandy (32.9%).

The trend could take off if in Europe if recent new product developments in the craft beer movement are anything to go by.

According to recent data from the Mintel Global New Products Database (GNPD), North America (and the US especially) dominated the global craft beer industry in 2013, accounting for 52% of all craft beer retail launches compared to just 29% for Europe.

In 2017, roles reversed with 54% of launches originating in Europe and just 19% in North America, while new craft beer product launches in the continent have more than doubled over the past five years by178%.

“Over the last few years, interest in craft beer has migrated from the US into the UK and now into continental Europe,” Jonny Forsyth, associate director, Mintel Food & Drink, said.

“Our research suggests that Europeans are embracing craft beer because they are looking for new, more exciting offerings compared to their usual beer options, especially in markets such as Germany, where brewers and beer styles have remained unchanged for centuries. While markets like Germany, Belgium and Czech Republic are still dominated by their own beer styles when it comes to innovation, consumer interest in craft beers is already there and offers ample opportunities for manufacturers.”

Although there were no specific craft spirits figures for the UK, the IWSR’s Drinks Market Analysis 2018 data found that demand for rye whisky is growing fast, driven by bartenders in the cocktail trade.

The volume figures for spirits categories in the UK 2013-2017 also showed gin continued to perform very well, with a volume increase of 23.4% 2016-17, taking total UK consumption in 2017 up to nearly 42 million litres. Appetites for both vodka and white rum, however, declined.

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