Mintel: Sales of Craft Beer Could Eclipse $20 Billion in 2014

Sales of craft and craft-style beer will likely eclipse $20 billion in 2014, according to a new report from market research firm Mintel.

Of the $20.4 billion in craft sales that Mintel has predicted for this year, the firm believes more than 84 percent ($17.2 billion) will come from Brewers Association-defined craft brewers.

Mintel had originally forecasted that craft beer sales could exceed $18 billion by 2017, but now believes that figure could actually double in the next five years. Citing consistent year-over-year growth trends, an improving economy, product innovation and an engaged consumer base, the firm said that combined sales of craft and craft-style beer could surpass $36 billion in 2019.

Despite the positive growth predictions, however, Mintel found that a “relatively low percentage” of beer drinkers (23 percent) regularly consume craft beer. Still, amongst 25-34 year-olds, the segment’s heaviest users, 29 percent of the survey’s respondents said they drink craft beer.

“While this is smaller than the 53 percent of consumers over the age of 22 that drink any beer, it’s not far off from 30 percent of consumers who drink non-craft beer only,” the company stated in a press release.

According to the report, 70 percent of 24-34 year-olds surveyed said the brand of beer “says a lot about you.”

“Craft beer is not only a beverage choice; it appears to be a lifestyle choice,” said Mintel’s food and drink analyst Beth Bloom.

So what factor influences craft beer purchases the most? Survey respondents said that 51 percent of the time, style is the most important factor when they are making their craft beer selections. However, when making non-craft purchases, respondents said style only influences the decision 11 percent of the time.

“The leading purchase driver among craft beer drinkers is style, pointing to a more discerning consumer base,” said Bloom. “This focus on style and flavor is a major element that differentiates a craft beer drinker from the rest, and points to the future of beer in the U.S.”

Visual style seems to be less important: Only 13 percent of all craft beer drinkers surveyed said they would select a product that “looks cool” when their typical purchase is unavailable. Meanwhile, only 8 percent of craft drinkers said label and packaging design is important in their purchase decision.

Unsurprisingly, craft beer drinkers and “mainstream” drinkers are entirely different consumers. Craft beer drinkers are more likely to try new products and share their experiences with others while non-craft beer drinkers do not consider themselves to be “knowledgeable” about beer.

But when analyzing the household incomes for craft drinkers and mainstream drinkers, it’s clear that craft and non-craft purchasers differ considerably. In fact, the Mintel report found household income to be the “strongest determiner” of a craft beer purchase. One third of respondents from households earning more than $150,000 annually drink craft products while just 11 percent of those earning less than $25,000 do so.

“Keeping affordable offerings available will be important to engaging a wider consumer base,” the report states. “Where this is not possible, presenting offerings as an occasional worthwhile indulgence should be considered.”

Nevertheless, it should be noted that 83 percent of craft drinkers also drink non-craft offerings, the Mintel survey found.

“While craft beer drinkers might appear to be more particular about product choice, they are by no means exclusive in their beer drinking,” said Bloom.

Mintel also highlighted a few other statistics in its report:

  • Respondents from households with children are significantly more likely (61%) than those without (49%) to drink beer “to relax”.
  • Craft drinkers from the Midwest are significantly more likely than respondents from other regions to support a particular brewery (29%). Western states are most apt the most image conscious, with 57% agreeing that the type of beer you choose says a lot about you and 47% saying it’s a source of pride to try as many beers as they can. The consumption of craft beer is lowest in the South (16%).
  • More than half (55%) of respondents report that they are willing to spend more money for craft beer, indicating that crafty beer (craft-style beer produced by larger brewers) provides major breweries an avenue for considerable growth.
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