In 2011, only one in 20 (5%) spirit launches worldwide were positioned as craft. Today, one in seven (15%) launches situate themselves in this category.
Craft whisk(e)y and craft gin are the most popular offers in the category, while consumers are also showing interest in flavored spirits.
As in other F&B categories such as craft beer, the rise of craft spirits shows how consumers are demanding authentic, distinctive, local and imaginative brands.
Hotspots for craft spirits innovation
Out of the craft spirits launched between 2011 and 2015, 49% were in the US and 42% were in Europe. This compares to just 4% in Latin America and 3% in Asia Pacific.
“Craft spirit launches are growing at a rapid pace and will continue to rise in more mature markets - particularly the US - as consumers continually seek out ‘special’ offerings,” said Jonny Forsyth, global drinks analyst, Mintel.
55% of US alcohol drinkers say craft alcohol brands are of higher quality than big brands.
75% of US Millennials agree craft alcohol brands are higher quality than big brands
Around half of consumers in France (55%), Italy (53%), Germany (50%) and Poland (46%) agree that spirits from small/craft distillers are more appealing than large, mass-produced brands.
In the UK, 37% of dark spirits/liqueur drinkers are prepared to pay more for craft variants.
34% of UK Millennials agree craft drinks are worth paying more for.
Mintel credits small US producers as pioneering global craft spirits growth, in the same way craft brewers have done so in the craft beer category. These small manufacturers (producing under 100,000 cases per year) now account for around 2% of the total US spirits market.
But other countries are following the lead of the US. Mintel identifies the UK, Germany, France, Mexico, Brazil and Spain as “hotspots for craft spirits innovation.”
Meanwhile, Australia now consumes more craft spirits than the US on a per capita basis, and is using native ingredients to innovate in the category.
“Australian micro-distillers are coming to ‘old world’ spirits with an open-minded ‘new world’ mentality,” observes Mintel. “This has seen gin makers exploring local botanicals from the outback, like West Winds gin, which uses the native bush tomato, or the recently launched Noble Cut gin, which also uses pepperberry.”
Gin and whisky
Whisky accounted for 43% of global craft spirit launches in 2015, up from 37% in 2011. Gin accounted for 23% of launches in 2015, up from 9% in 2011.
Gin, however, is an attractive option for producers, taking days rather than years to produce.
“As start-ups seek to balance production of more nuanced spirits with the commercial realities, gin is an appealing choice,” said Forsyth.
Flavor is in fashion
Flavor is a big driver for Millennials, who like spirits that are more accessible in taste, but also offer something new and exciting.
This does, however, mean that brands have a shorter success life-cycle than in previous decades.
“With the US a trend-setting market for new spirits flavor innovation, it is worth other markets keeping an eye on the rise in spicy spirits innovation,” says Mintel.
“This is a wider trend being seen in the US and European food sector, and is being driven especially by Millennials seeking intense and “dialled up” flavors.”