The Middle East is among the growing fertile grounds for craft beers

The Middle East is among the growing fertile grounds for craft beers

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The global craft beer market is growing stronger as per the ‘Global Craft Beer Market – Growth, Trends and Forecasts (2018 – 2023) report. The market accounted for USD 38 billion and it is expected to attain a CAGR of 14 percent during the forecast period (2018-2023).

The growth contributions are mainly coming from North American market in particular the United States wherein the small and independent American craft brewers have already occupied 12 percent market share of the total beer market of the U.S. by 2015 according to the trade group Brewers Association report. In such market scenario, quality and safety becomes crucial aspects to craft beer industry as small and independent brewers continue to lead the local, full-flavored beer movement.

Craft beer is brewed by a small, independent, and traditional brewer. The beverage is fetching higher sales than traditional beer due to endeavors from local and international brewers that are expanding their distribution network and at the same time offering exciting new flavors and tastes. The rising consumer preference for low alcohol by volume (ABV) beer is fueling the growth of the global craft beer market.

Consumers are increasingly preferring new styles and flavors of craft beer thus boosting its marketability. With the use of premium quality raw materials and advanced brewing techniques, major chunk of beer consumers have been successfully diverted to craft beer segment from mainstream beer.

The craft beer industry is majorly driven by its ‘premiumization’ aspect, wherein the consumers willingly pay higher prices for craft beer than its traditional counterparts due to its exotic flavor profile and convenience of making. Thus, higher margins associated with craft beer fetches higher profitability.

The global craft beer market is segmented by type, distribution and geography. Based on the type of craft beer, the market has been further segmented into Ales (Pale, strong, Indian, brown and Scottish styles), Pilseners and Pale Lagers, Wild/Sour Beer, Wheat Beers, Porters, Stouts, Bocks, Hybrid and Specialty Beers. India pale ale (IPAs) are a major growth driver followed by pilsners.

Based on the distribution channels, the market is further segmented into on-trade and off-trade distribution. The former sub-category is the one wherein the alcoholic drinks are sold in bars, restaurants, clubs and pubs and similar channels. The off-trade distribution is the one where craft beer is distributed through retailers, wholesalers, and online channels.

Due to the rapid growth of hospitality sector particularly in the developed economies, the on-trade distribution channels have promising growth potential. On the contrary, the off-trade distribution has higher growth prospects in emerging economies where affordability is the key to sales performance.

Europe followed by North America has been leading the craft beer market owing to the double digit exponential growth rate over the past five years coupled with rising acceptance and liking for flavored beer, and increasing preference for low ABV beverages. However, the market in both the regions has been approaching maturation stage and manufacturers are increasingly looking for fertile grounds in emerging economies of Eastern Europe, Asia-pacific and Middle East.

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