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The global craft wine market size stood at USD 35.39 billion in 2019 and is projected to reach USD 48.77 billion by the end of 2027, exhibiting a CAGR of 4.4% in the forecast period.
As defined by the Craft Wine Association, craft wine is a commercially available, limited-produced wine. These wines are local, handcrafted, and have a unique flavor usually produced by small, independent producers. They differ significantly in style as they vary according to the brewers, who infuse several ingredients such as spices, herbs, and varietals to enhance their taste profile and palatability. They also possess several health benefits due to the presence of tannins, which is one of the major reasons to entice consumers. The increasing inclination of consumers towards flavorful and high-quality drinks is likely to propel its demand in the global marketplace during the craft wine industry forecast period.
Closure of Restaurants and Wineries due to COVID-19 Pandemic to Hamper Growth
The global COVID-19 pandemic outbreak has significantly led to the closing of various taprooms, wineries, restaurants, and bars due to the enforcement of lockdown by governments. The shutdown of drinking establishments and scarce workforce availability has hampered the production and the sales of the product. According to the Confederation of Indian Alcoholic Beverage Companies (CIABC), in May 2020, in countries such as India and China, alcohol sales went down by nearly 60% due to higher tariffs amid the pandemic.
Though the on-trade sales were effectively shut down, supermarkets and off-premises sales offer delivery services to consumers amidst the lockdown. According to an NGO named Movendi International, in 2020, the off-trade wine business sales in the U.S. grew by 23.7% as the bars, and taprooms remained closed. Thus, the industry is anticipated to recover in the upcoming years as the bars and wineries have normalized their functioning.
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Infusion of Cannabis to Create Innovative Craft Beverages is a Vital Trend
The ongoing trend of infusing various wine ingredients to create innovative and exotic products has significantly drawn the consumers’ attention. Their willingness to try out new craft alcoholic beverages and openness to experiment with new flavors have promoted the consumption of such drinks. The infusion of cannabis in wines would cater to an audience who prefer new ways of consuming marijuana, along with other beverages. In countries such as the U.S., where the consumption of cannabis is legal, manufacturers are coming up with innovative weed-infused drinks, owing to the growing inclination of people towards innovative products.
Shifting Consumer Preference towards Premiumization to Propel Growth
The consumers’ taste preferences never settle and they are always demanding beverages that are sophisticated and unique in taste. According to the International Wines and Spirits Record (U.K.), 2018, the consumption of premium-and-above wine increased by more than 5% in the U.S. Similarly, consumers in the developing economies such as China and India, due to their increasing affluence and growing incomes, are shifting towards premium-and-above priced wines.
The digitalization boom has played a crucial role in educating consumers and cultivating an interest in consuming high-quality speciality wines. This has also widened the availability of such beverages on various e-commerce channels, making the category more accessible to consumers. The expansion of the segment will not only open multiple market opportunities but will also raise the popularity of craft wine among the masses.
Rising Demand for Creative Cocktails among Millennials to Augment Growth
The growing demand for innovative wine-based cocktails among consumers, especially the millennials, is expected to augment the market growth. Consumers are widely drinking popular wine-based cocktails such as sangria, mango passion, French pear martini, and bishop cocktail for their refreshing taste and aesthetic appeal.
In recent years, millennials of the drinking age prefer cocktails with a handful of ingredients but have a flavorful profile. The inclination of consumers towards this minimalist approach emphasizes the utilization of high-quality craft beverages to ensure the delivery of an excellent taste and flavored cocktail. Thus, encouraging the manufacturers to introduce creative cocktails in this market would aid growth.
Availability of Other Craft Alcoholic Beverages to Dampen Growth
The presence of other craft alcoholic beverages such as craft beer and craft spirits in the market is likely to restrain market growth. According to the National Brewers Association, the craft beer retail sales in the U.S. increased by 4% in 2019 to reach 13.6% of the overall U.S. beer market by volume.
Similarly, the craft spirits segment is also flourishing. According to the American Craft Spirits Association (ACSA), the retail sales of craft spirits in the U.S. in 2017 was USD 3 billion. Consumers are gradually shifting towards other craft alcoholic beverages due to their wide availability. Apart from that, their surging preferences for low-alcoholic beverages are also expected to hamper the market growth. However, manufacturers are embarking upon launching low ABV craft wine variants in this market to boost growth.
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Still Wine Segment to Dominate Due to its Unique Taste and Nutritional Properties
The still wine segment is likely to dominate as it is the most popular and oldest variant of table wine consumed worldwide. It is a type of table wine produced by the vinification method that leaves the wine free from carbon dioxide. The increasing pairing of still wine with food during several occasions has significantly contributed to the growing demand for its craft variant. The wine can be paired with other drinks to formulate cocktails or can be consumed on its own. According to the International Wines and Spirits Record (IWSR), its consumption is projected to reach USD 2.3 billion for a total volume of 9-liter cases by 2022 due to its versatile nature and high-palatability.
However, the sparkling wine segment is showcasing strong traction from consumers due to their mild sweetness and crisp acidity balance. Sparkling wines are also available in various fruity and floral aromatic notes such as peach, blossom, pear, and others, which plays a crucial role in drawing the consumers’ attention.
Numerous Health Benefits and Sensory Appeal to Promote Red Wine Segment
Wine drinkers and enthusiasts across the world are showing a great preference for red wine due to its numerous health beneficial properties and great taste. It is rich in compounds such as antioxidants, which help in preventing cardiovascular ailments, reducing the oxygen free radicals in the body, and increasing the level of good cholesterols.
According to the National Center of Biotechnology Information (NCBI), 2018, red wine contains resveratrol, anthocyanins, and catechins compounds. When consumed regularly in limited amounts, it may prevent various chronic diseases. Its consumption has also resulted in the improvement of skin, health, and memory. Hence, it will aid in offering a healthy lifestyle to the populace. Coupled with this, its wide availability via different sales channels and its sensory appeal are the factors set to contribute to this segment's growth in the market.
On-Trade Segment to Lead Backed by Rising Socialization Trend
The on-trade segment is one of the efficient sales channels for serving craft alcoholic beverages to consumers worldwide. Craft alcoholic beverages such as wine are mostly available in tasting rooms, wineries, and boutique wine stores as they have a limited-production of 5000 cases or even less. Various on-trade channels are gaining traction from consumers due to their rising socialization trends. It has further resulted in higher dine-outs. Along with this, consumers can enjoy live music and eat food while enjoying their drink in restaurants and lounges. Additionally, some wineries have also started allowing their customers to brew their wine to draw their attention. It would proliferate the on-trade sales globally.
Europe Craft Wine Market Size, 2019 (USD Billion)
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Europe is one of the major markets with immense potential in the wine category as it is the traditional producer of wine. The beverage is popularly drunk in the region. Countries such as Germany, Italy, France, and Spain are the major wine-producing countries in the region. The consumption of wine during various celebratory occasions, along with its cultural significance, are the main factors set to boost the market growth in the region. Besides, the surging trend of consuming creative and premium craft beverages among consumers, especially Gen Z and millennials, will also propel market growth.
North America emerged as the second-largest region in the market due to the growing demand from consumers for craft alcoholic beverages such as beer and wine. The presence of numerous craft brewers and boutique wine shops in countries such as the U.S. and Canada has increased the consumption of the product by consumers.
Asia Pacific is likely to exhibit significant growth opportunities in the market due to the wide adoption of westernized trends and a rise in the disposable incomes of middle-class consumers. Countries such as India, Japan, and China are the potential markets due to their huge consumer-base and an increasing number of restaurants, wineries, and lounges. Furthermore, South America and the Middle East and Africa are likely to hold the least craft wine market share due to lower penetration.
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Key Companies to Focus on Expanding Their Portfolios for Gaining Competitive Edge
The global market is fragmented due to the presence of various prominent players. These companies are focusing on creating new formulations to expand their product portfolios, as well as to fortify their market presence. Aldi, Inc., Chateau Niagara Winery, House of Saka, LGI Wines, and CRFT Wines are focusing on new product developments and increasing their exports to expand their businesses.
An Infographic Representation of Craft Wine Market
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The craft wine market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible segments in the market. Various key insights presented in the report are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.
Value (USD Billion)
By Distribution Channel
Fortune Business Insights says that the global market size for craft wine was USD 35.39 billion in 2019 and is projected to reach USD 48.77 billion by 2027.
Registering a CAGR of 4.4%, the market will exhibit steady growth in the forecast period (2020-2027).
Based on product type, the still wine segment is expected to lead the market.
The increasing demand for premium wines is the key factor driving the market.
Aldi, Inc., Chateau Niagara Winery, House of Saka, LGI Wines, and CRFT Wines are a few of the leading players in the market.
Europe held the highest share in the global market.
The red wine segment is set to lead in terms of flavors in the global market.
New product launches and the expansion of online trade are the key market trends.
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