Craft Beer: From Adolescence to Maturity
The craft trend is evolving as it becomes more deeply embedded in the global beer landscape. Growth in the US is decelerating but the sector remains lively, and at the same time, microbreweries are opening in new markets around the world. Definitions remain a point of contention and initiatives to boost clarity are on the rise. Euromonitor International’s recent strategy briefing: “The Evolution of Craft: A New Era for Beer?” looks in more detail at how the trend is developing, and what it means for the wider beer industry.
Mature Markets: Craft Beer Comes of Age?
2017 figures from the US Brewers Association report just a 5% rise in US craft beer production volumes – a considerable reduction on previous years. To some extent, this was inevitable, as double-digit growth cannot continue indefinitely. However, the speed and severity of the slowdown is a clear sign that US craft is entering a new, and arguably more sustainable, stage of its lifecycle. The initial explosive growth period is over.
While competition is intensifying and more breweries are closing, a relatively moderate rate of growth is not – on its own – a sign that craft beer is on the way out. Microbrewers are continuing to innovate, with new styles, revived traditional recipes and hybrid products providing opportunities. Tapping into the shift toward experiences over commodities, brewpubs are helping to drive consumer engagement and at the same time providing a platform for experimentation.
Emerging Economies: Showing Early Signs of Promise
While the craft beer movement is entering a new phase in its original markets, it is still in the early stages of progress across much of the world. Imported brands are often a key part of craft’s initial development, but these are being swiftly followed by the opening of new microbreweries.
Local offerings are now available in a huge range cities and towns globally, and this number continues to rise. One of the signatures of the craft movement is the inclusion of distinctly local ingredients which add a unique twist to global styles – wasabi and green tea in Japan, and Amazonian fruit in Brazil, to name just a few.
The sector’s share remains limited in leading global beer markets such as China and Brazil. However, interest is high and growth is dynamic, hence the considerable attention the craft trend in these markets is drawing from mainstream companies.
No Time to Stand Still
In addition to intensifying competition, microbrewers are exposed to many of the same background shifts that are affecting the wider beer industry – for better or worse. The rise of digital technology, growing health awareness and new legislation will have a significant impact in the near future, if not already. The consumer desire for ‘new and different’ has always been central to microbrewers’ success. In an increasingly challenging environment, the ability to adapt and innovate will prove ever more critical.