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Attitudes towards Craft Alcoholic Drinks - UK - August 2018

“Where craft brands enjoy a decided advantage over standard ones is the positive emotions they spark among users. Underpinning this is a perception of craft brands as supporting their local economy. Marketing messages presenting their company as part of a wider community would help craft producers to leverage this perception.”

– Alice Baker, Research Analyst

This report examines the following issues:

  • Perception that acquisitions lead to a decline in quality pose an issue for large companies taking over craft brands
  • Craft drinks in on-trend flavours should appeal
  • Scope to further mine the feel-good factor around craft drinks

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Consumer cutbacks on alcohol affect the craft segment
              • Ageing UK population to hinder craft drinks
                • New craft entrants heat up the competition in alcoholic drinks
                  • Companies and brands
                    • Leading players continue to acquire craft brands
                      • Few alcohol launches use the term ‘craft’ on-pack
                        • Larger companies look to tap into the craft trend
                          • NPD trends include standout packaging, flavours and low/no alcohol
                            • Craft brands raise their profile by linking with music and movies
                              • The consumer
                                • Three in 10 adults buy craft drinks
                                  • Figure 1: Buying of standard and craft alcoholic drinks, June 2018
                                • Price and brand are key influences on alcohol buying
                                  • Craft labels have little influence even on craft buyers
                                    • Figure 2: Alcoholic drinks buying factors, June 2018
                                  • Strong links between craft alcohol buying and foodie-ism
                                    • Unique flavour and quality ingredients are the most widely seen as important for craft
                                      • Figure 3: Factors seen as most important for an alcoholic drink to be considered ‘craft’ , June 2018
                                    • Flavour profile labelling and quality awards can help craft drinks to win new users
                                      • Figure 4: Behaviours relating to craft alcoholic drinks, June 2018
                                    • Craft drinks enjoy a strong feel-good factor
                                      • Figure 5: Craft alcohol buyers’ behaviours, June 2018
                                    • Consumers are split on the importance of heritage
                                      • Figure 6: Attitudes towards craft alcoholic drinks, June 2018
                                    • What we think
                                    • Issues and Insights

                                      • Perception that acquisitions lead to a decline in quality pose an issue for large companies taking over craft brands
                                        • The facts
                                          • The implications
                                            • Craft drinks in on-trend flavours should appeal
                                              • The facts
                                                • The implications
                                                  • Scope to further mine the feel-good factor around craft drinks
                                                    • The facts
                                                      • The implications
                                                      • The Market – What You Need to Know

                                                        • Consumer cutbacks on alcohol affect the craft segment
                                                          • Ageing UK population to hinder craft drinks
                                                            • New craft entrants heat up the competition in alcoholic drinks
                                                            • Market Drivers

                                                              • ‘Craft’ term remains unregulated
                                                                • Multiple factors affect alcohol prices
                                                                  • Inflation hits the category
                                                                    • Scotland introduces minimum unit price for alcohol
                                                                      • Stronger craft cider could be hit by extra duties
                                                                        • A third of buyers have cut back on alcohol for health reasons
                                                                          • Ageing UK population offers little support to craft drinks
                                                                            • Smaller brands benefit from supermarkets expanding their craft ranges
                                                                              • Continued growth in breweries and distilleries
                                                                              • Companies and Brands – What You Need to Know

                                                                                • Leading players continue to acquire craft brands
                                                                                  • Few alcohol launches use the term ‘craft’ on-pack
                                                                                    • Larger companies look to tap into the craft trend
                                                                                      • NPD trends include standout packaging, flavours and low/no alcohol
                                                                                        • Craft brands raise their profile by linking with music and movies
                                                                                        • Takeovers and Acquisitions

                                                                                          • Acquisitions of smaller brands in various alcoholic drinks sectors from 2013-18
                                                                                            • Figure 7: Selected acquisitions of craft brands by major companies^, 2013-18
                                                                                          • Beer
                                                                                            • Heineken moves on two craft brands
                                                                                              • Beavertown acquisition provokes a backlash in some quarters
                                                                                                • Carlsberg snaps up troubled London Fields
                                                                                                  • Fullers takes over Dark Star
                                                                                                    • Lion of Australia buys Fourpure
                                                                                                      • White Spirits
                                                                                                        • Beam Suntory looks to reassure consumers after Sipsmith acquisition
                                                                                                          • Cider
                                                                                                            • Molson Coors acquires Aspall
                                                                                                              • BrewDog looks to shake up the cider market with Hawkes investment
                                                                                                              • Launch Activity and Innovation

                                                                                                                • Few alcohol launches use the ‘craft’ term on pack
                                                                                                                  • Gin boom drives rise in small-batch gins
                                                                                                                    • Figure 8: UK alcoholic drinks launches, by selected terms featured on-pack, 2014-18 (sorted by 2017)
                                                                                                                  • Heineken puts the spotlight on its brewers with Maltsmiths
                                                                                                                    • Figure 9: Example of Heineken’s Maltsmiths brand, 2018
                                                                                                                  • Pub chains collaborate with craft brewers
                                                                                                                    • Retailers expand their own-label alcohol ranges with craft products
                                                                                                                      • Beer
                                                                                                                        • White spirits
                                                                                                                          • Figure 10: Examples of own-label craft alcoholic drinks, 2017-18
                                                                                                                        • Craft brands explore unusual flavours
                                                                                                                          • Craft brewers extend into other categories
                                                                                                                            • Low/no alcohol beers from craft brewers emphasise their full flavour
                                                                                                                              • Giving further detail on low/no alcohol products’ flavour
                                                                                                                                • Figure 11: Low/no alcohol craft beer launches, UK, 2017-18
                                                                                                                              • Unusual packaging formats help with on-shelf standout
                                                                                                                                • Craft brewer unveils beer in wine-style bottles
                                                                                                                                  • The Uncommon launches English wine in a can
                                                                                                                                    • Beer Hawk adds to Beer Bullets range
                                                                                                                                      • Figure 12: Beer Hawk Beer Bullet plus beers included, UK, 2017
                                                                                                                                    • Craft brands take inspiration from a variety of sources
                                                                                                                                      • Ethical products from craft brands should boost feelgood associations
                                                                                                                                        • McGuigan launches small-batch wines
                                                                                                                                        • Advertising and Marketing Activity

                                                                                                                                            • BrewDog republishes its recipe book
                                                                                                                                              • Maltsmiths highlights its perfectionism
                                                                                                                                                • Camden Town launches its first TV campaign
                                                                                                                                                  • Outdoor campaign focuses on pleasure
                                                                                                                                                    • Craft brands raise their profile at cultural events
                                                                                                                                                      • Linking with music and film
                                                                                                                                                        • Music event with craft beers promoted as way for people to support local industry
                                                                                                                                                          • Tiny Rebel sponsors Spotify playlists
                                                                                                                                                            • Whitley Neill invites people to inhale ‘gin mist’
                                                                                                                                                            • The Consumer – What You Need to Know

                                                                                                                                                              • Three in 10 adults buy craft drinks
                                                                                                                                                                • Price and brand are key influences on alcohol buying
                                                                                                                                                                  • Craft labels have little influence even on craft buyers
                                                                                                                                                                    • Strong links between craft alcohol buying and foodie-ism
                                                                                                                                                                      • Unique flavour and quality ingredients are the most widely seen as important for craft
                                                                                                                                                                        • Flavour profile labelling and quality awards can help craft drinks to win new users
                                                                                                                                                                          • Craft drinks enjoy a strong feelgood factor
                                                                                                                                                                            • Consumers are split on the importance of heritage
                                                                                                                                                                            • Buying of Standard and Craft Alcoholic Drinks

                                                                                                                                                                              • Three in 10 adults buy craft alcohol drinks
                                                                                                                                                                                • More men than women buy craft
                                                                                                                                                                                  • Figure 13: Buying of standard and craft alcoholic drinks, June 2018
                                                                                                                                                                                • Ale/bitter is the most widely bought craft alcohol type
                                                                                                                                                                                  • Uptake of craft white spirits is low despite the buzz around gin
                                                                                                                                                                                    • Figure 14: Buying of standard and craft alcoholic drinks, by drinks type, June 2018
                                                                                                                                                                                • Alcoholic Drinks Buying Factors

                                                                                                                                                                                  • Price is the primary influence on alcoholic drinks buying
                                                                                                                                                                                    • Introductory offers can help challenger brands to attract users
                                                                                                                                                                                      • Figure 15: Alcoholic drinks buying factors, June 2018
                                                                                                                                                                                    • Brand loyalty is strong in alcohol
                                                                                                                                                                                      • Brand loyalty is on a par between craft and standard alcohol buyers
                                                                                                                                                                                        • Craft label has little influence even on craft buyers
                                                                                                                                                                                        • Expertise and Interest in Trends among Alcoholic Drinks Buyers

                                                                                                                                                                                          • Over half of people who follow food/drink trends buy craft alcohol
                                                                                                                                                                                            • Various opportunities for craft producers to build associations with food trends
                                                                                                                                                                                              • Trendy on-trade venues will need to ensure good selection of craft drinks
                                                                                                                                                                                                • Figure 16: Expertise and Interest in Trends among alcoholic drinks buyers, June 2018
                                                                                                                                                                                              • A third of buyers like to be the first to try new alcoholic drinks
                                                                                                                                                                                                • Sense of connoisseurship is higher among younger consumers
                                                                                                                                                                                                • Factors Seen as Most Important for Craft Alcoholic Drinks

                                                                                                                                                                                                  • Flavour and ingredients are most widely seen as important for craft
                                                                                                                                                                                                    • Figure 17: Factors seen as most important for an alcoholic drink to be considered ‘craft’, June 2018
                                                                                                                                                                                                  • Many who prioritise unique flavour also prioritise quality ingredients
                                                                                                                                                                                                    • Hand-made products signal craft to a third
                                                                                                                                                                                                        • Figure 18: Heat map of areas seen as indicating a craft product^, June 2018
                                                                                                                                                                                                      • Ownership is seen as important by three in 10
                                                                                                                                                                                                        • Acquisitions of craft brands by larger companies can lead to a backlash
                                                                                                                                                                                                          • Need for large companies acquiring craft brands to reassure the public
                                                                                                                                                                                                            • Small-batch production is associated with craft by three in 10
                                                                                                                                                                                                              • Small-batch production carries some quality associations …
                                                                                                                                                                                                                • …but has little effect on buying
                                                                                                                                                                                                                • Behaviours relating to Craft Alcoholic Drinks

                                                                                                                                                                                                                  • Various opportunities for craft drinks to attract new users
                                                                                                                                                                                                                    • On-shelf labelling on flavour profile appeals particularly to under-35s ...
                                                                                                                                                                                                                      • Figure 19: Behaviours relating to craft alcoholic drinks, June 2018
                                                                                                                                                                                                                    • … and would encourage 40% of non-users to buy craft
                                                                                                                                                                                                                      • Quality awards would encourage half of alcohol buyers to buy craft
                                                                                                                                                                                                                        • Collaborative drinks enjoy wide appeal
                                                                                                                                                                                                                        • Craft Alcohol Buyers’ Behaviours

                                                                                                                                                                                                                          • Strong feel-good factor for craft drinks
                                                                                                                                                                                                                            • Figure 20: Craft alcohol buyers’ behaviours, June 2018
                                                                                                                                                                                                                          • Recommendations are key to driving trial of craft drinks
                                                                                                                                                                                                                            • ‘Shared wisdom’ marketing messages can allow brands to harness the power of recommendations
                                                                                                                                                                                                                            • Attitudes towards Craft Alcoholic Drinks

                                                                                                                                                                                                                              • Consumers are split on the importance of heritage
                                                                                                                                                                                                                                • Good opportunities for small-batch variants from established brands
                                                                                                                                                                                                                                  • Figure 21: Attitudes towards craft alcoholic drinks, June 2018
                                                                                                                                                                                                                                • Only a minority feel that own-label drinks cannot be craft
                                                                                                                                                                                                                                  • Tangible references to production methods can help own-label to build a craft positioning
                                                                                                                                                                                                                                    • Collaborations between own-label and craft brands should appeal
                                                                                                                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                        • Abbreviations
                                                                                                                                                                                                                                          • Consumer research methodology
                                                                                                                                                                                                                                          • Appendix – Factors seen as Most Important for Craft Alcoholic Drinks

                                                                                                                                                                                                                                              • Figure 22: Original images of products featured in focus group study of on-pack terms seen as indicating a craft product, June 2018

                                                                                                                                                                                                                                          Attitudes towards Craft Alcoholic Drinks - UK - August 2018

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