Global Craft Beer Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2024-2032)

Craft Beer Market Insights

• The total number of craft breweries in the United States reached an all-time high of 9,683 in 2023, including 2,071 microbreweries, 3,467 brewpubs, 3,900 taproom breweries, and 245 regional craft breweries.
• In 2023, small and independent USA brewers produced 23.4 million barrels of beer. Due to this, craft beer market share increased to 13.3%, up from 13.1% in 2022.
• In California, craft breweries contributed USD 8.8 billion to the state's economy in 2022 and supported more than 49,751 jobs.
• As per industry reports, California currently leads the USA with the highest number of craft breweries (1,571), followed by New York (762) and Pennsylvania (761).

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Craft Beer Market Overview

Craft beer is an alcoholic beverage that is prepared in small quantities using traditional brewing methods to emphasise quality and flavour. It is made by independent commercial breweries and the crafting takes a much longer time as it uses no additives like rice or corn and is considered an art by brewmasters. The increasing consumption of craft beer due to its availability in different tastes and flavours coupled with the utilisation of high-quality ingredients are some of the major factors catalysing growth of the craft beer market. The market’s growth is also fuelled by consumer preference for unique flavours and premium experiences, which has led to over 9,000 craft breweries operating in the U.S. alone. In recent years, these breweries have produced more than 25 million barrels of craft beer annually, highlighting the significant contribution of small and independent brewers to the industry.

Moreover, rising demand and sales of IPAs, sours, stouts has also contributed to craft beer market revenue. Taprooms and brewery tours have also risen in popularity as some consumers seek direct engagement with brewers. The potential health benefits of hop, an essential ingredient in beer, along with the presence of zinc and manganese are also expected to favour the market expansion. Additionally, collaborations have become a staple in the industry as breweries are partnering with local coffee roasters, chocolate makers, and even distilleries to create experimental flavours and attract broader audiences. This focus on product innovation has driven the market growth.

Craft Beer Market Trends

Experimentation and innovation with new ingredients

Craft breweries are increasingly experimenting with ingredients like exotic fruits, chocolate, coffee, spices, and barrel ageing to create unique flavour profiles. For instance, the number of fruit-flavoured beer offerings has surged, with a 25% increase reported over the last few years. Barrel-aged beers, once rare, are now featured by over 60% of craft breweries, as they provide rich, complex flavours. Breweries such as Dogfish Head Brewery have released beers using ingredients like prickly pear and sea salt, capturing consumer interest. This trend in the craft beer market drives customer engagement, broadens the product range, and encourages adventurous beer-drinking experiences.

Growing preference for local and artisanal beers

Consumers are showing a preference for locally brewed craft beers, supporting small businesses, and enjoying unique, community-centric products. Studies show that over 75% of craft beer drinkers prioritise local products, with purchases from neighborhood breweries making up about 30% of their total beer consumption. This trend is particularly strong in areas with high brewery density, such as Portland, Oregon, where craft beer demand is strong. By focusing on local ingredients and unique flavours, small breweries create strong community ties and capitalise on consumer preferences for fresh, authentic products, boosting local economies in the process.

Favourable government initiatives to support craft brewers

Many governments are implementing favourable tax breaks and grant programs to support the craft beer market development. For example, in the U.S., the Craft Beverage Modernisation and Tax Reform Act has help reduced excise taxes for small breweries, resulting in savings of over USD 80 million annually. The Canadian government has also introduced grants for breweries, which has contributed to a 15% increase in new brewery openings nationwide. Moreover, initiatives such as the Queensland Craft Brewing Strategy have and still supports independent craft breweries to develop their capability, access new markets, and increase its economic contribution. These initiatives have enabled small and medium-sized breweries to reinvest in expansion, innovation, and workforce development, helping them remain competitive while fuelling growth in the craft beer market.

Industry News

Feb 1st, 2024

Métier Brewing Company partnered with Columbia Distributing to accelerate expansion across Washington State, aiming to increase market share by 30% over the next two years. This collaboration seeks to enhance brand visibility while promoting diversity in the craft beer market landscape.

Jan 31st, 2024

Union Bear Brewing Co. announced the opening of a new production facility in Denton, Texas, capable of producing up to 20,000 barrels of varied beer flavours annually. This expansion solidified Union Bear’s position in the North Texas craft beer industry.

Opportunities in Craft Beer Market

The market offers significant opportunities, especially in product and packaging diversification, international expansion, and direct-to-consumer (DTC) sales. Creative packaging, encompassing unique labels, storytelling, and branding can help breweries stand out in a crowded marketplace. Many, like Sierra Nevada, embrace vintage or retro themes, evoking a sense of nostalgia. Brands like Mikkeller, use illustrated characters and whimsical artwork. Many craft breweries, such as New Belgium Brewing, incorporate natural elements like mountains, rivers, or animals to reflect their focus on sustainability and local ingredients. Additionally, breweries such as BrewDog leverage bold typography and vibrant colour contrasts to create a modern, edgy, and aesthetic appeal for younger consumer base. Moreover, craft beer dynamics and trends are being influenced by rising popularity of experimental brews like sour beers. As per industry reports, sales of sour beer in the U.S. have grown by over 40% in the last two years, while hard seltzers, often offered by craft breweries, saw a 35% increase in demand among craft drinkers in a recent year. There’s also a robust opportunity for craft breweries to expand internationally, as markets like Asia-Pacific are seeing increased interest. Direct-to-consumer (DTC) sales also offer breweries a profitable channel; for instance, in the U.S., DTC alcohol sales reached approximately USD 5 billion in 2023, which benefitted craft breweries significantly.

Craft Beer Market Restraints

Craft breweries face rising production costs, especially while purchasing key ingredients like hops and barley. Barley prices have increased by over 15% year-over-year due to supply chain issues, significantly impacting profit margins for small brewers. Additionally, many craft breweries struggle to comply with complex regulations. For example, the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) requires breweries to obtain a federal brewing permit and adhere to specific labelling and advertising guidelines. Additionally, breweries must navigate state-specific laws for distribution and sales, which can limit direct-to-consumer sales and hence, can adversely impact craft beer market revenue. These regulations add time and expense, with new breweries often needing up to 12 months for federal and state approvals before they can legally operate. Competition from large beer corporations further challenges independent brewers. Anheuser-Busch, for instance, recently acquired multiple craft breweries to boost its market share. These factors are impacting the market proliferation.

Craft Beer Market Dynamics

Brewers and breweries are using advanced technologies to develop improved formulations, boosting the market development. For instance, Species X, a new entrant in Columbus craft brewery scene, is setting itself apart by integrating AI, data analytics, and machine learning into its operations. This could involve predicting flavour profiles based on ingredient combinations, automating quality control to ensure consistency, or even personalising beer recommendations for customers based on their preferences.

Craft beer market expansion is also being facilitated by the rising consumer inclination towards low and no-alcohol craft beers. Breweries like Athletic Brewing Co. have capitalised on this trend, achieving over USD 15 million in sales in a recent year, showing that health-conscious consumers value flavourful, alcohol-free options. Larger breweries, including BrewDog, have launched alcohol-free versions of their popular beers, tapping into this trend as well. These products expand the market by offering guilt-free alternatives.

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Craft Beer Industry Segmentation

“Craft Beer Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Pilsners and Pale Lagers
• Ales
• Specialty Beers
• Others

Market Breakup by Distribution Channel

• Off-trade
• On-trade
• Others 

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Craft Beer Market Share

By Type Insights

Pilsners and Pale Lagers occupy a sizeable market share as they are known for their crisp, clean, and refreshing taste, making them widely appealing to a diverse range of beer drinkers. These beer styles are versatile and serve as a great introduction to craft beer for individuals who are accustomed to mass-produced beers, and their familiar flavours can attract new customers. Craft brewers are innovating within these traditional beer styles, offering unique takes on Pilsners and Pale Lagers by experimenting with different hops, malts, and brewing techniques and these innovations keep the styles fresh and exciting for consumers.

As per the craft beer industry analysis, ales are also expected to witness robust growth in the coming years as they encompass a wide range of beer styles, including IPAs (India Pale Ales), stouts, porters, and Belgian ales, among others. This diversity offers consumers a broad spectrum of flavours, aromas, and experiences, catering to a wide range of palates. Ales are particularly favoured by craft brewers for experimentation due to their versatile nature as brewers can explore various hop varieties, yeast strains, and brewing techniques, resulting in innovative and unique beers.

By Distribution Channel Insights

The availability of diverse flavours and superior quality beers through various off-trade channels is boosting the market expansion. Moreover, the rising inclination of customers towards off-trade distribution channels, supported by the emergence of e-commerce and improved availability through online platforms, is catalysing the segment’s growth. Off-trade channels often offer a broad selection of craft beers, including local, regional, and international options which cater to diverse consumer tastes and preferences, allowing individuals to explore new and unique brews beyond what might be available at their local bar or pub.

Craft beer demand growth is also being driven by the expansion of on-trade channel, which encompasses establishments like bars, pubs, restaurants, and breweries. In the United States, there are approximately 65,000 bars and pubs and over 9,000 breweries contributing to this growth. In the UK, an estimated 47,000 pubs and over 2,300 breweries are currently present. Bars and pubs often offer craft beer on tap, ensuring that customers are served fresh and properly stored beer.

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Craft Beer Market Regional Insights

North America Craft Beer Market Trends

The availability of hop, a vital ingredient in the preparation of craft beer, is playing a crucial role in the growth of the market in the North American region. As per the report of the National Institute of Food and Agriculture, United States, the 2021 value of U.S. hops yield totalled USD 662 million, witnessing a 7% rise in production from the previous year. In addition, the strong foothold of craft brewing companies in the region and the increasing production of craft beer are also contributing to the incremental development of the market. As per craft beer market analysis, there are currently more than 9,000 craft breweries across the region. In Canada, the number of licensed breweries has reached around 1,200, with craft beer accounting for nearly 10% of national beer sales. Moreover, government support, such as the U.S. Craft Beverage Modernisation and Tax Reform Act, has provided tax breaks to small brewers, which help saves the industry an estimated USD 80 million annually. This has allowed breweries to reinvest in innovation and expansion. Additionally, Canadian provincial governments are easing restrictions on direct-to-consumer sales, further supporting the craft beer sector.

Asia Pacific Craft Beer Market Drivers

The Asia Pacific region is one of the fastest-growing markets for craft beer, driven by a rising middle class and a growing preference for premium products. In countries like China, the industry is expected to grow at a high CAGR% as young consumer in the country are increasingly seeking unique flavours and premium offerings. Japanese and Australian governments are promoting local craft breweries by reducing excise taxes on small producers and relaxing distribution regulations. For example, in Japan, recent policy changes have enabled breweries to sell beer directly to consumers online, fuelling craft beer market opportunities. In Australia, the market is being supported by government grants that encourage local ingredient sourcing and sustainable brewing practices. In addition, the expanding number of beer companies in countries such as India and China are further invigorating the market.

Europe Craft Beer Market Opportunities

Europe has a rich history of brewing, and the market here is expanding, particularly in the UK, Germany, and Belgium. The UK has around 3,000 breweries, including many craft breweries. Government initiatives like the Small Brewers’ Relief scheme, which reduces beer duty for breweries producing under 60,000 hectoliters, have helped small breweries thrive. In Germany, there is a growing trend towards artisanal beers and craft beer sales have increased by 10% in recent years, further boosting market growth.

Latin America Craft Beer Market Growth

In Brazil, craft beer sales have increased by over 20% annually in recent years, supported by a growing middle class and consumer interest in artisanal products. Brazil now hosts over 1,000 craft breweries, and the government has introduced tax incentives for small brewers to foster this burgeoning industry. Mexico has also experienced rapid growth, with nearly 1,400 microbreweries in operation. The Mexican government supports the craft beer market growth by reducing excise taxes for breweries that produce under 5 million liters per year. Additionally, in Argentina, recent government reports indicate that the craft beer sector contributes approximately USD 200 million to the economy, supported by subsidies for breweries that focus on local ingredient sourcing. Many Latin American breweries are also exploring exports, particularly to the U.S. and Europe, further boosting their regional presence.

Middle East and Africa Craft Beer Market Dynamics

The market in the MEA region is growing, although it remains relatively niche. However, South Africa has emerged as a leading craft beer hub, with more than 200 craft breweries. In 2023, the South African government released an economic development report highlighting the potential of craft breweries to boost local tourism and job creation. Additionally, to encourage small-scale breweries, South Africa has introduced incentives for breweries using local grains and hops, aiming to reduce import reliance. In the UAE, where alcohol consumption is permitted, a growing expatriate population and tourism industry have fuelled the demand for premium and craft beer. Dubai has also become a focal point for microbreweries, and recent policy changes allow more restaurants and bars to sell alcohol, contributing to an increase in craft beer sales.

Innovative Start-ups in Craft Beer Market

Start-ups in the market focus on innovation, local engagement, and sustainability to differentiate themselves in a competitive landscape. Many prioritise unique flavours, such as fruit-infused or barrel-aged beers, appealing to adventurous consumers. Additionally, they are focusing on locally sourced ingredients and partnering with regional farms to support the local economy and reduce environmental impact. Sustainability is another core focus, with practices like water conservation and recyclable packaging gaining importance. Furthermore, many start-ups are engaging directly with their communities through taprooms, brewery events, and collaborations with other local businesses. These strategies help build a loyal customer base and create a strong sense of brand identity. Few start-ups that have worked towards creating a favourable craft beer market outlook are:

Athletic Brewing Co., founded in 2017 and headquartered in Connecticut, United States, has quickly became a leader in the non-alcoholic craft beer space. By 2022, the company had raised over USD 75 million in funding, which included investments from prominent figures like J.J. Watt. It achieved sales growth of over 300% annually in its first few years and reached nearly 50,000 barrels of production by 2023. Its distribution has expanded to all 50 USA states and select international markets, which also allows it to capture a significant share of the rapidly growing non-alcoholic craft beer market.

Other Half Brewing Co., founded in 2014 and based in New York, United States, is a major name in craft beer landscape, renowned for its popular IPAs, sours, and stouts. The brewery produces approximately 20,000 barrels annually and operates locations in Brooklyn, the Finger Lakes region, and Washington, D.C. Company’s limited releases often sell out within hours as customers line up to buy cans that can resell on secondary markets for several times their original price. Its collaboration projects include over 50 partnerships with other breweries worldwide, further increasing its influence and reach in the craft beer community.

Competitive Landscape

Market players are increasing their collaboration efforts as well as adopting novel methods to enhance their production capabilities and stay competitive in the market. For instance, companies like Dogfish Head Brewery are offering low-calorie options like their "SuperEIGHT" beer, which appeals to those mindful of calorie intake. Sierra Nevada is experimenting with seasonal brews, such as their Hazy Little Thing IPA, which showcases innovative hop combinations. Players like Stone Brewing have introduced limited-edition beers like their Arrogant Bastard Ale, which is known for its bold flavours and unique ingredients. New Belgium Brewing provides engaging brewery tours and tastings, which creates a community atmosphere that fosters brand loyalty. As per craft beer market overview, many breweries are focused on sustainable practices and using locally sourced ingredients. For example, New Belgium Brewing recently reduced water usage to just 3.2 gallons per gallon of beer, which is well below the industry average of 5-6 gallons. On the other hand, Allagash Brewing sources over 1 million pounds of Maine-grown wheat annually to produce organic craft beer. Such practices have fostered customer loyalty.

Key Industry Players

Boston Beer Company, Inc. was founded in 1984 and is headquartered in Massachusetts, United States. It is best known for its Samuel Adams brand and produces a variety of craft beers, hard seltzers, ciders, and tea-based beverages. The company has also expanded to markets in Canada, Europe, and Asia.

Sierra Nevada Brewing Co. was founded in 1980 and is headquartered in California, United States. As per craft beer market report, it is one of the largest and most established craft breweries in the country and is renowned for its Pale Ale. It also distributes in Canada, the UK, and selected European markets.

Duvel Moortgat NV was founded in 1871 and is headquartered in Belgium. It is known for its Belgian beers, including Duvel and La Chouffe. It operates in over 60 countries and owns several breweries, such as Firestone Walker Brewing Company (California) and Boulevard Brewing Company (Missouri).

CANarchy was founded in 2015 and is headquartered in Colorado, United States. It operates many craft breweries, including Oskar Blues and Cigar City Brewing. It is known for its canned craft beer and is focused on expanding the presence of its brands in retail channels.

Other craft beer market players include D.G. Yuengling & Son, Inc., and Left Hand Brewing Co., among others.

Recent Developments

Feb 1st, 2024

Canarchy Craft Brewery Collective officially rebranded itself as Monster Brewing Company, a strategic move aimed at enhancing its alignment with the parent company, Monster Beverage Corporation. This transition reflects Monster's ambition to expand its presence in the craft beer market.

Jan 31st, 2024

Species X Beer Project, which opened in January 2024 in Columbus, Ohio, shifted its focus on a futuristic approach to brewing by integrating artificial intelligence (AI) and wild yeast fermentation into its processes.