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Attitudes towards Craft Alcoholic Drinks - UK - February 2016

“Consumers are likely to become increasingly demanding of brands which claim to be ‘craft’, and the onus is on the brands to ensure that they can provide clear evidence of their craft credentials.”
– Chris Wisson, Senior Drinks Analyst

This report looks at the following areas:

  • The ongoing issue of defining ‘craft’
  • Does ‘craft’ growth risk putting family and medium-sized companies out of business?
  • Online is a good fit for craft drink sales
  • Craft needs to convey value for money

‘Craft’ is currently one of the buzzwords within the alcoholic drinks industry, with landlords and retailers alike looking to tap into the popularity of craft drinks. Craft beer is particularly big business, with new breweries opening each week. While some brands such as Guinness are looking to tap into the trend via internal projects, the acquisitions of Meantime and Camden Town in 2015 by SABMiller and InBev, respectively, are unlikely to be the last time a large brewery looks to buy its way into the segment.

A lack of a definition has not hindered the growth of craft drinks to date, with no imminent sign of this trend slowing down. However, with more operators entering the market, consumers are likely to become even more demanding of craft brands to prove their credentials and show that they are not just jumping on the bandwagon.

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
      • Executive Summary

          • The market
            • Alcoholic drink prices continue to rise
              • UK consumers continue to cut back on alcohol
                • The ongoing rise of craft drinks
                  • Population changes could also impact the market
                    • Companies, brands and innovation
                      • Packaging and design innovation
                        • Flavour and ingredients
                          • Partnerships and takeovers
                            • Craft spirits set for a profile boost
                              • The consumer
                                • Consumers are most likely to associate craft drinks with a unique flavour
                                  • Figure 1: Consumer definitions of craft alcoholic drinks, any ranking 1-5, November 2015
                                • Mainstream repertoires are wider than craft ones
                                  • Figure 2: Purchase of craft and mainstream alcoholic drinks, November 2015
                                • Only 24% of beer buyers are willing to spend £4+ on pints of craft beer
                                  • Cost could be a barrier to the growth of craft
                                    • Figure 3: Attitudes towards craft alcoholic drinks, November 2015
                                  • 59% of drink buyers think that ‘craft’ needs to be defined
                                    • Figure 4: Further attitudes towards craft alcoholic drinks, November 2015
                                  • What we think
                                  • Issues and Insights

                                    • The ongoing issue of defining ‘craft’
                                      • The facts
                                        • The implications
                                          • Does ‘craft’ growth risk putting family and medium-sized companies out of business?
                                            • The facts
                                              • The implications
                                                • Online is a good fit for craft drink sales
                                                  • The facts
                                                    • The implications
                                                      • Craft needs to convey value for money
                                                        • The facts
                                                          • The implications
                                                          • The Market – What You Need to Know

                                                            • Alcoholic drink prices continue to rise
                                                              • UK consumers continue to cut back on alcohol
                                                                • The ongoing rise of craft drinks
                                                                  • Population changes could also impact the market
                                                                  • Market Drivers

                                                                    • Alcoholic drink prices continue to rise
                                                                      • Figure 5: UK excise duty rates for selected alcoholic drinks, 2005-15
                                                                    • UK consumers continue to cut back on alcohol
                                                                      • The ongoing rise of craft drinks
                                                                        • Population changes could also impact the market
                                                                        • Key Players – What You Need to Know

                                                                          • Packaging and design innovation
                                                                            • Flavour and ingredients
                                                                              • Partnerships and takeovers
                                                                                • Craft spirits set for a profile boost
                                                                                • Launch Activity and Innovation

                                                                                  • Packaging and design innovation
                                                                                    • Flavour and ingredients
                                                                                      • Partnerships and takeovers
                                                                                        • Craft spirits set for a profile boost
                                                                                        • The Consumer – What You Need to Know

                                                                                          • Consumers are most likely to associate craft drinks with a unique flavour
                                                                                            • Mainstream repertoires are wider than craft ones
                                                                                              • Only 24% of beer buyers are willing to spend £4+ on pints of craft beer
                                                                                                • Cost could be a barrier to the growth of craft
                                                                                                  • 59% of drink buyers think that ‘craft’ needs to be defined
                                                                                                  • Consumer Definitions of Craft Alcoholic Drinks

                                                                                                    • Unique flavour most widely seen as mark of craft drink
                                                                                                        • Figure 6: Factors consumers see as defining a craft alcoholic drink, any ranking 1-5, November 2015
                                                                                                      • Five other factors also stand out as key craft signifiers
                                                                                                        • Small volumes
                                                                                                          • Independently owned and produced
                                                                                                            • Only 23% define craft drinks on price grounds
                                                                                                              • Younger drinkers respond to NPD and a modern look
                                                                                                                • 22% do not know what craft drinks are
                                                                                                                • Purchase of Craft and Mainstream Alcoholic Drinks

                                                                                                                  • Mainstream drinks repertoires are wider than craft ones
                                                                                                                    • Figure 7: Repertoire of types of craft and mainstream alcoholic drinks bought, November 2015
                                                                                                                  • Beer performs best for craft purchases …
                                                                                                                    • Figure 8: Purchase of craft and mainstream alcoholic drinks, by type, November 2015
                                                                                                                  • … with ale/bitter leading the way
                                                                                                                    • Figure 9: Share of all buyers of a drink, who have bought craft variants of the drink, by drink type, November 2015
                                                                                                                  • Cider follows a similar pattern to lager
                                                                                                                    • Spirits starting to tap into the craft movement
                                                                                                                      • Wine lags behind in the craft stakes
                                                                                                                      • How Much Drinkers Are Prepared to Spend on Craft Beer

                                                                                                                        • Only 24% of beer buyers are willing to spend £4+ on a pint of craft beer
                                                                                                                            • Figure 10: How much drinkers are prepared to spend on a pint of craft beer, November 2015
                                                                                                                          • £2-2.49 can be a lucrative price point in the off-trade for 500ml bottles
                                                                                                                            • Figure 11: How much drinkers are prepared to spend on a 500ml bottle of craft beer for drinking at home, November 2015
                                                                                                                        • Attitudes towards Craft Alcoholic Drinks

                                                                                                                          • Cost could be a barrier to the growth of craft …
                                                                                                                            • Figure 12: Attitudes towards craft alcoholic drinks, November 2015
                                                                                                                          • … as could the lack of a definition …
                                                                                                                            • Dedicated ‘craft’ sections could aid choice
                                                                                                                              • Figure 13: An example of Wetherspoon Craftwork display, October 2015
                                                                                                                            • … while taste does not appear to be a barrier
                                                                                                                              • More information about taste welcomed
                                                                                                                              • Further Attitudes towards Craft Alcoholic Drinks

                                                                                                                                • 59% of drink buyers think that ‘craft’ needs to be defined
                                                                                                                                  • Figure 14: Further attitudes towards craft alcoholic drinks, November 2015
                                                                                                                                • Craft is only preferred by one in four
                                                                                                                                  • Importance of scale and maker
                                                                                                                                    • Large scale a put-off for some
                                                                                                                                      • Taste trumps maker for most
                                                                                                                                        • Producing drinks on site and in partnership
                                                                                                                                          • Craft drinks in the on-trade
                                                                                                                                            • Role of reviews
                                                                                                                                              • Potential for drinks flights to reduce risk
                                                                                                                                                • Figure 15: An example of a beer flight
                                                                                                                                              • Branded glasses in demand
                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                  • Abbreviations
                                                                                                                                                    • Consumer research methodology

                                                                                                                                                    Attitudes towards Craft Alcoholic Drinks - UK - February 2016

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