The Craft Beer Market Is Projected To Expand At A CAGR Of 6.9% Until 2032, Reaching US$ 174.68 Bn

Craft beer sales are expected to reach US$ 87 Bn as of 2022, according to a recent report by Fact.MR. The industry is forecast to grow at a CAGR of 6.9% over the forecast period of 2022-2032, reaching US$ 174.68 Bn by 2032.

In the course of the previous five years, the market expanded steadily at a CAGR of nearly 5%, valued at over US$ 81 Bn by the end of the period. Despite declining prospects in 2020 due to COVID-19, growing reliance on instant beverages during lockdown drove major e-commerce companies to partner with leading beverage manufacturers, enhancing the availability of craft beer across a wide range of adult demographics.

Many factors are involved in creating the perfect beer or ale. It can be difficult to define what craft beer is, but small, independent breweries are usually the ones producing unique products. A variety of flavors is used for attracting customers, including honey, fruits, tart, sweet and sour, funky flavors and spicy.

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Key Takeaways from the Market Study

• North America is expected to be a lucrative region, accumulating 36% market revenue
• Craft beer consumption to increase in Europe, accounting for 41% of global demand, fueled by premium brands.
• With a CAGR of 5.2%, microbreweries are expected to retain their prominence through 2032.
• Among products, pale ale will experience maximum sales, accounting for 25% of total revenue
• Global craft beer market to experience almost 2x from 2022 to 2032

“Craft beer’s growing demand for natural ingredients and flavors, in conjunction with increased health consciousness, is resulting in an increase in the use of natural flavors,” says a Fact.MR analyst.

Low alcohol by volume (ABV) preferences- a major opportunity for this market

Consumers are becoming more health-conscious as they are increasingly drawn to low-alcohol beverages, and sales of no-alcohol and low-alcohol beers have been rising as a result of increased competition with new, enhanced taste-enhancing products.

Increasing awareness of alcohol consumption and a desire to try new beverages have contributed to the popularity of low-alcohol beers and ciders. In the United Kingdom, where off-license and supermarket sales have reached record highs, this trend is evident in the demand for low alcohol drinks by volume.

Another reason is the fact that low-alcohol beers are now a lot cheaper than their high-alcohol counterparts, or those with 2.8% ABV or less. Craft beer would benefit from the reduction in cost if low-alcohol beers became more popular and be a prominent opportunity for the market for craft beer.

Why is North America emerging as an important hub for Craft Beer?

Large volume craft beer production and independent microbreweries to bolster the market

North America is likely to hold the largest share of the growing demand for craft beer until 2032. The variety of independent microbreweries and the production of craft beer in a large volume has become the major reason behind the success of craft beer in the American market.

Independent breweries and the support of small businesses have helped boost the market for craft beers. They have greatly contributed to the development of this market. According to Fact.MR, a 36% market share is anticipated for the North American craft beer industry.

Data from the Brewers Association shows Colorado and Vermont to be the state’s most economically impactful craft beer drinking states. Among states with more than 21 adults, Colorado ranks first in economic impact per capita with $764, while Vermont is second with $681. These numbers represent the overall output of the craft beer industry in each state based on the 21+ population.

Why is there Enhanced Preference for Pale Ale Craft Beers?

A bitter taste and unique flavor is attracting the customers

Amongst all craft beer products, pale ales are one of the most popular choices for consumers, with Indian pale ales (IPA) gaining maximum traction. There is a touch of bitterness in the taste of the Indian pale ales that have become the trademark of this product.

Their unique flavor and taste make them highly sought-after in the market. Even though other products have grown in popularity quite rapidly throughout the years, IPA and Haze IPA will always make the top list of consumer demands. In addition, IPA helps in the establishment of healthy bones and also assists in maintaining good health. A market share of 25% is expected for this segment during the forecast period.

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Competitive Landscape

Manufacturing companies can increase revenue and market share through strategic collaborations by meeting consumer demand and increasing production. The end-user can benefit from eco-friendly products thanks to the emergence of new products and technologies. Strategic collaborations enable manufacturers to increase production and meet consumer demand, which will increase revenue and market share. The advent of new products and technologies will allow end-users to enjoy products that can be flavored by nature.

• On October 1st, 2020, AB InBev, one of the largest breweries in the world, completed the long-awaited acquisition of the Craft Brew Alliance. Further, AB InBev purchased the remaining 68.8% shares with $220 million gaining full ownership over the firm.
• On August 12, 2021, Coca-Cola FEMSA, the Mexican Bottling company, confirmed its acquisition of the Brazilian beer brand Therezopolis to acquire the Brazilian Craft Beer market.
• Constellation Brands, Inc., announced its acquisition of Florida-based brewery, Funky Buddha Brewery, in August 2017, reaffirming its plan to dominate the high-end beer sector in the U.S.
• With the growing demand for craft beer, AB InBev’s venture capital unit, ZX Ventures, opened up a new brewery in Wuhan, China in February 2018.
• Australian Craft Brewers Company Stone and Wood was acquired by Lion, one of the major players in the domain of alcoholic beverages, on 9th September 2021. In addition to acquiring Stone and Wood, Lion may be able to acquire Little Dragon, Sunny Seltzer and Fixation by purchasing full ownership of Farmentum Group, the parent company of Stone and Wood.

Key Segments Covered in the Craft Beer Industry Survey

By Product

• Brown Ale
• Pale Ale
• Porter
• Stout
• Pale Lager
• Pilsner
• Marzens
• Bocks
• Other

By Brewer

• American Sour
• Non-Alcoholic
• Belgian Fruit Lambic
• Flanders Red Ale
• Belgian Gueuze

Sales Channel

• Microbreweries
• Brewpubs
• Contract Brewing Companies
• Independent Regional Craft Brewing Companies

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