Craft beer is not mass produced in “mega-brewery” corporations. It’s a part of the microbrewery industry and forms a considerable smaller proportion of the global market for beer. However, craft beer are expensive since they are exclusive and hence have high manufacturing cost. They are specialized and do not enjoy the same worldwide popularity of mass-produced beer. This also drives up their price.
Despite the high cost, craft beer is seeing soaring sales thanks to a reviving interest of consumers in beers produced using traditional methods on account of robust marketing strategies of players. For example, many are seen promoting their products through beer fests. This coupled with increasing spending capacity of people worldwide, better distribution channels, and increasing consumption of alcohol in almost all parts of the world are having a positive influence on the market for craft beer.
Keen Manufacturers Experiment with Flavors in their Constant Quest to Increase Customer Base
The market for craft beer is currently facing stiff challenge from the likes of wine, cider, and other health drinks. Financial slowdown in the U.S. post the economic meltdown of 2008 and also the ripple effect in nations of the U.K., France, and Germany have also hurt demand for craft beer. This has resulted in a stagnant market. To overcome the challenge, manufacturers in the market are coming up with new products having different flavors to entice more consumers. In fact, in certain regions, such breweries have even started to contribute to the economy. California is one such region where craft beer has become a prominent economic engine that is generating employment and growth.
Economic Growth in Asia Pacific Drives Demand for Craft Beer
While the market in Europe and North America are battling declining revenues, the Asia Pacific market is opening up new avenues for growth. This is because of the fast-expanding large economies of India and China with their large population pool that have substantially driven up demand. Apart from that, other developed nations of Australia and New Zealand, which are major producers of craft beers, are also catalyzing growth in the Asia Pacific market.
Market Seeing Increasing Deal-making
Overall, the competition in the global craft beer market is getting heated with new policy support for it by various governments and also because of the increasing deal-making. Players are also coming up with unique promotional and marketing strategies to outgun rivals and up sales. They are also increasing outlays on advertising to promote their brand image and product sales.
Competition Set to Intensify with Entry of New Players
Some of the prominent participants in the global market for craft beer are Stone & Wood Brewing Co., Omer Vander Ghinste, The Boston Beer Company, Sierra Nevada Brewing Co., Deschutes Brewery, The Gambrinus Company, Chimay Beers And Cheeses, Feral Brewing Co., Vagabund, Bell's Brewery, Inc., New Belgium Brewing Company, D.G. Yuengling and Son, and Lagunitas Brewing Company. Going forward, the market is expected to see many new entrants which will likely make the competitive landscape fragmented. This will also predictably intensify competition. Indian conglomerate United Breweries, which is a leading beer manufacturer in India, for instance, is now looking to enter the craft beer market too to tap into the new crop of alcohol lovers of means who are willing to pay a premium for unique products.