Craft Beer Market Size, Industry Share & COVID-19 Impact Analysis, By Type (Ale, Lager, Pilsner, and Others), By Distribution Channel (On-Trade and Off-Trade), and Regional Forecast, 2021-2028

The global craft beer market size was valued at USD 95.23 billion in 2020 and is projected to grow from USD 102.59 billion in 2021 to USD 210.78 billion in 2028 at a CAGR of 10.83% during the forecast period. The Asia Pacific market is holding the largest share and it is anticipated to grow at a CAGR of 10.50% during the forecast period.

The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over. The global impact of COVID-19 has been unprecedented and staggering, with the market witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global craft beer industry will exhibit a lower growth of 6.70% in 2020 as compared to the average year-on-year growth during 2017-2019.

Beer has always been the oldest and most widely consumed alcoholic beverage around the world and has several health benefits if consumed moderately; it contains iron, calcium, vitamin B, and fiber. Advancements in beer brewing technologies have resulted in the emergence of wide-ranging products in the market. The aforementioned product is one of the most consumed variants in the spectrum and has gained immense popularity in recent years. The market is witnessing decent growth, especially in North America due to the constant modification and improvement in taste, along with the availability of numerous flavorful options in the region. The emergence of flavorful options has increased the consumption of such beverages as consumers are always seeking innovative drinks.

Declined Craft Beer Consumption amid COVID-19 to Impede Market Growth

Beer is regarded as a relaxing drink among consumers. However, the global COVID-19 pandemic outbreak has resulted in the closure of various pubs, restaurants, taprooms, and bars by governments to maintain social distancing norms. This has negatively impacted the global market. According to a study by the Brewers Association, the total brewery sales in the U.S. went down by 30.5% in May compared to the prior year. Nearly, 89% of the brewing companies, either had stopped or slowed down their production, as their year-on-year (YoY) sales have declined in April. The majority of the craft breweries on-site sales were adversely affected as 87% of the brew pubs were closed due to the lockdown enforcement in the U.S., along with the cancellation of orders and events by the distributors. However, the market is expected to recover in the coming months due to the reopening of taprooms and ease of production.

CRAFT BEER MARKET TRENDS

Growing Consumer Inclination towards Cannabidiol (CBD) Infused Beverages to Favor Market

The industry is expanding as new breweries are opening up across every region in the world. Brewers are developing new products to serve the increasing consumer demand, therefore, introducing creative styles of craft ale and lager to remain at the front foot among other rivals. The innovation of CBD, a non-psychoactive component of the cannabis plant is infused in the product. Breweries such as The Long Trail Brewing Company in Vermont have started a limited edition line-up of IPAs and APAs, brewed with hemp oil. The consumers are turning towards CBD-infused beers as they have relatively low-calorie count and the CBD reduces the bitter taste of hops in beer, while the hops flavor is complemented by the citrus notes of terpenes.

DRIVING FACTORS

Emergence of Flavorful and Strong Beers to Augment Industry Growth

The advent of many flavorful and strong craft beers in the market, including fruit & spice, honey-flavored, sour, malty & sweet, and tart & funky flavors has drawn consumers’ attention. Floral flavors such as chamomile, elderflower, and lavender balance and complement flavors and add a subtle taste and smooth quality. The addition of innovative flavors and new ingredients in beers have increasingly drawn consumers worldwide. This in turn, is expected to bolster the market growth in the upcoming years.

Rising Number of Craft and Microbreweries to Aid Growth

The rising socializing trends, particularly amongst millennials, has augmented their stopovers to the brewpubs and taprooms. This has also resulted in an upsurge in the establishment of small as well as independent breweries. Therefore, breweries are refining its beer production to satisfy the increasing consumer demand. Moreover, as per the Brewers Association, U.S.-based small as well as independent brewers brewed around 26.3 million barrels in 2019, with a volume surge of 4% in comparison with the previous year. The craft production was responsible for 25.2% of the total product retail market in 2019 in the U.S., which has aided the overall market growth.

RESTRAINING FACTORS

Availability of Other Alcoholic Craft Beverages to Hamper Growth

Though alcoholic beverages are widely consumed worldwide, the availability of numerous other alcoholic craft beverages such as gin, rum, whiskey, and wine are hampering the market growth. The growing inclination of consumers towards such craft spirits owing to their willingness to try out new variants in craft beverages has increased their consumption. Furthermore, the other alcoholic craft beverages are more diverse than this alcoholic beverage and are undergoing several distillation techniques to obtain high-quality liquor. Along with this, the availability of numerous flavors in alcoholic craft beverages such as grapefruit, plum, raspberry, lemon, and others are impeding the market growth.

CRAFT BEER MARKET SEGMENTATION ANALYSIS

By Type Analysis

Craft Lager to Lead Craft Beer Industry

The craft lager segment is witnessing significant growth in the market owing to the brewers trying and adding new styles like light lager and pales to their product portfolios to draw consumers' attention from mainstream brands. The consumers are increasingly demanding craft lagers due to their light and malty taste. The brewers are shifting towards the product with longer shelf lives and less expensive ingredients, which has increased the craft lager production. According to the Brewers Association, in the Great American Beer Festival (GABF) 2019, lagers made up 1764 entries in nearly 18 different styles which constitute 15.8% of this alcoholic beverage. Followed by lager, ale is holding the major share in the market.

By Distribution Channel Analysis

Off-trade Sales to Dominate Trade Distribution

The sales of craft beer through off-trade channels has increased in recent years owing to their wide availability in different flavors and types. The off-trade channels such as supermarkets and convenience stores are usually preferred by consumers to buy as they offer pre-chilled, convenient bottles, or cans. As per the Martson’s Beer Company’s off-trade beer report 2019, approximately 35% lager and 16% ale consumers incline towards buying this alcoholic beverage via such off-trade sources. Moreover, consumers these days, favor drinking at their residence rather than in pubs as it is comparatively comforting, relaxed, as well as cost-effective. As per the survey in 2018 by, Stoneage Pub Company and Molson Coors, 87% of the consumers chose to comfortably drink at their residence, which has affirmatively influenced the growth of the segment.

REGIONAL INSIGHTS

The growing demand for unique flavors, coupled with the rapid urbanization and increasing disposable incomes has positively impacted the consumption growth in the Asia Pacific. China and India are likely to have major sales. The craft beer industry in China has increased by 250%, with above a thousand craft breweries functioning in the country, contributing to the region’s market growth.

Followed by the Asia Pacific, North America is projected to hold the second-largest market share throughout the forecast period. The rapid expansion of craft breweries in the U.S. is a major factor contributing to regional market growth. Its surging popularity is mainly due to the increasing number of microbreweries and its large volumetric production.

In Europe, the growing demand for premium products has supported the market growth, coupled with the increase in consumption of craft ale.

The Middle East & Africa markets are projected to witness strong growth during the projected period due to high demand in the growing urban centers in the region.

KEY INDUSTRY PLAYERS

The Boston Beer Company is Focusing on Base Expansion to Intensify Global Competition

The global market is consolidated with the presence of key giants worldwide. Companies such as The Boston Beer Company, Heineken NV, Constellation Brands, Inc., and Anheuser-Busch InBev, are actively focusing on new product launches, incorporating new ingredients, and process improvements for their existing beverages. The key players also focus on strategic mergers to fortify their business and bolster their market presence. For instance, in June 2020, Anheuser-Busch InBev acquired the remaining 68.8% stake of Craft Brew Alliance, a craft beer brewing company in order to diversify its product portfolio.

LIST OF KEY COMPANIES PROFILED:

• D.G. Yuengling& Son, Inc. (Pennsylvania, U.S.)


• Heineken N.V.(Amsterdam, Netherlands)


• The Boston Beer Company, Inc. (Massachusetts, U.S.)


• Constellation Brands, Inc. (New York, U.S.)


• Anheuser-Busch InBev (Leuven, Belgium)


• New Belgium Brewing Co. (Colorado, U.S.)


• Sierra Nevada Brewing Co. (California, U.S.)


• DuvelMoortgat NV (Puurs, Belgium)


• Bell's Brewery, Inc. (Michigan, U.S.)


• Dogfish Head Craft Brewery Inc. (Delaware, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• April 2021: B9 Beverages Pvt. Ltd. under its brand Bira91 announced their plan to launch limited edition of craft beers in various flavors in India owing to the consumers growing demand for bold and exquisite flavors.


• October 2020: Latambarcem Brewers launched bottled craft beer brand Maka di in India, due to the rising popularity of beer in India.

REPORT COVERAGE

The craft beer market report provides qualitative and quantitative insights into the industry. It also offers a detailed craft beer market analysis with market size and growth rate for all possible segments in the market. Various key insights presented in the report are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key craft beer industry trends.

Report Scope & Segmentation