Consumers are showing a preference for craft brews that not only support their local economy but also feature a more unique taste.
Los Angeles, California (PRWEB) October 31, 2011
Craft beer is expected to attract a larger share of the demand for alcoholic beverages over the five years to 2016, as consumers continue to switch to high-quality yet reasonably priced beers. The craft brewing industry has been growing consistently according to IBISWorld, the nation’s largest publisher of industry research. Consumers are showing a preference for craft brews that not only support their local economy but also feature a more unique taste. Smaller players have also gotten crafty, using marketing techniques like beer tastings and brewery tours. For this reason IBISWorld has expanded its industry research report collection to include craft brewing industry and other industries within beverage production.
IBISWorld projects that industry revenue in the overall brewing industry will grow at an annualized rate of 1.9% over the next five years, reaching $30.3 billion in 2016. According to IBISWorld analyst, Agata Kaczanowska, much of this increase will occur in the craft beer industry egment which has been growing consistently. “There was a more rapid increase in the number of these smaller operations in the 1990s,” says Kaczanowska. “Craft brewers are responsible for the 4.5% annualized rise in brewing establishments to 1,709 over the five years to 2011.” Data from the Beer Institute's 2010 "Brewers Almanac" suggests that 98.8% of the estimated 1,678 breweries currently in operation in the United States qualify as specialty brewers. “However, though they dominate the market in terms of business numbers, craft brewers are responsible for about only 5.9% of industry revenue,” says Kaczanowska.
IBISWorld expects that the development of brand names over the next five years will be critical to players' success, both in competition among brewers and competition against substitutes like wine and spirits. Such development will be an advantage to larger players that run more cost-effective promotional campaigns. However, younger beer drinkers (aged 21 to 24) will increasingly experiment with and seek out unusual flavors as part of their drinking experience, which will provide opportunities for craft and microbreweries like the Boston Beer Company, Craftworks Restaurants & Brewery Inc., New Belgium and Sierra Nevada Brewing Company to expand their market reach.
For more information, download the full report from IBISWorld on the Craft Beer Production Industry.
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