Key Trends in Alcoholic Beverages: Powerful changes shaping the wine, beer, spirits and alcohol-free beverages industry

The alcoholic beverage industry is undergoing some significant changes at present and whilst there are some good opportunities for growth and innovation developing, there are also some concerning signs for the industry in certain segments. The trend for premium products in the beer and spirits industries has spawned the craft industry and it has proved to be a particularly difficult nut to crack for the big beer producers.

Buying up craft beer companies sometimes has unexpected outcomes with the industry and consumers alike, punishing acquisitions severely, whilst on the other hand traditional mass produced beer volumes are declining. A similar process is happening in the spirits market, with multiple old fashioned products getting craft revival and premiumization.

A powerful trend in the industry is the revelation that people are drinking less and particularly younger consumers are choosing to consume less alcohol because of the health impacts and this is leading to newer alcohol-free products that are making good progress. The wine industry has a difficult fight on its hands as it finds its legendary production regions suffering from reduced grape yields as a result of more severe weather patterns, this is leading to new countries emerging as market players as a result.

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Table of Contents

Table of Contents

Executive Summary 2

Beer: Big players move in on craft industry but this could be misguided 2

Spirits: Craft and premiumization driving spirits segment 2

Alcohol-free: Beverages are becoming increasingly popular as fewer young consumers drink alcohol 2

Wine: Market faces some significant climatic challenges 3

Beer: big players move in on craft industry but this could be misguided 7

Craft beer has been a sector of huge growth, but maturity is arriving 7

Beer volume sales are declining but beer dollar sales are increasing 8

Craft beer companies are hit hard when acquired 9

Craft beer companies are trying to fight takeovers by seeking funding 9

Big beer can end up killing their expensive new brands 10

Big beer should search for premiumization not craft 11

The rise of true or mass craft labelling 12

Cannabis is proving to be a potential substitute for beer 12

Constellation Brands begins the first of a wave of big beer moves into the cannabis sector 12

Spirits: Craft and premiumization driving spirits segment 14

Consumption is polarizing globally 14

Value is increasing ahead of volume 15

Increasing wealth concentration spurring demand for super premium 16

Craft beer revolution has spilled over into spirits 16

Smaller distilleries are impacting the market 16

Gin has grown in popularity in the UK16

Whiskey also a future trend in the UK17

Premiumization further driven by limited edition 17

Large brewers are increasingly involved in craft M&A 17

Brands behind gin revival acquired by multinationals18

Diageo investing in craft via Distill Ventures 19

Established brands are launching experimental products 19

Other spirits are now engaging in craft production 19

Diageo acquired Casamigos in 2018 19

Veganism trend will rise in spirits 19

Alcohol-free: beverages are becoming increasingly popular as fewer young consumers drink alcohol 20

A growing trend for less alcohol consumption with millennials 20

Health concerns from alcohol is a key driver for this trend 21

Soft drinks are not the solution in this particular case 22

Premiumization becoming more popular and offers a new solution for alcohol producers 22

Success of Fever Tree commensurate with gin’s popularity in the UK22

At present alcohol replacement products are growing very well 23

Seedlip alcohol-free gin, hits the premium trend well 23

Alcohol-free craft beer is booming by adding more flavor to a traditionally poorly received segment 24

Big Drop Brewing offers a wide range of flavor alternative to alcoholic beer 24

Non-alcoholic wine options are becoming mainstream but there is room for more innovation 25

Other new options are developing for innovation from other forms of inhibition 25

Wine: Market faces some significant climatic challenges 27

Premium and fine wines segment is a good place to be but not forever 27

Canned wine is helping wine to appeal to younger consumers 28

Climate change concerns for the wine industry are significant 29

New countries are making progress in the wine market 30

China is heavily developing its wine market and has been highly awarded 31

Eastern European wine options are now much more attractive 32

English wine is developing due to climate and seasonal changes 33

Key Findings 35

Appendix 36

Sources 36

Further Reading 36

Ask the analyst 37

About MarketLine 37

Disclaimer 37

List of Figures

List of Figures

Figure 1: Beer consumption by continent, volume million liters 1999-2022 7

Figure 2: Growth between small and large US breweries compared 2017 &2 018 CE’s (cases 24 12 oz bottles) 8

Figure 3: 2010-2017 Number of US craft beer companies acquired 9

Figure 4: Budweiser’s Super Bowl advert 2015 10

Figure 5: US Beer sales volume 2017, million BBLS 11

Figure 6: Brewers Association independent craft seal 12

Figure 7: Global spirits market value 2013-2017, $bn and yearly growth 14

Figure 8: Global spirits market volume 2013-2017, billion liters and yearly growth 15

Figure 9: US spirits revenue by product tier, 2007 and 2017 15

Figure 10: UK gin manufacturers’ sales and price per liter, GBPm, 2008-2017 17

Figure 11: Sipsmith gin products 18

Figure 12: Alcohol drinking habits in the UK 2005-2017 20

Figure 13: Heineken advertisement campaign “Moderate Drinkers Wanted” 21

Figure 14: Fever-Tree promotional material 23

Figure 15: Seedlip range of products 24

Figure 16: Big Drop Brewing range of craft non-alcoholic beers 25

Figure 17: Global wine volume liters, million, YoY growth by category 2008-2021 27

Figure 18: Global wine volumes by country 2007-2017 liters, million 28

Figure 19: Underwood wine in cans 29

Figure 20: Climate change effects on wine growing regions estimated 2050 30

Figure 21: Chinese wine production volumes 2007-2021 liters, millions 31

Figure 22: Top six countries by number of Grand Gold Medals awarded 2017 and 2018 32

Figure 23: Wineries launched in England 2016-2017 33

Figure 24: Chapel Down Winery Kent UK 34

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