With Oktoberfest right around the corner in Canada, and around the world, the celebration shines a spotlight on age-old brewing techniques and the popularity of artisan beers. But while high-end, small batch and expertly-crafted beer, or ‘craft beer’ as it is more commonly known, has been around for years in Europe, the continent is only now taking a global leadership role in craft beer innovation.
According to new research from Mintel, five years ago (2013), North America dominated the global craft beer industry, accounting for 52% of all craft beer retail launches*, including 4% of product launches in Canada and 48% in the US.
This compares to Europe which saw just 29% of launch activity. In the years since then, the story has flipped. In 2017, 54% of launches originated in Europe, and just 19% in North America (2% Canada, 17% US). Since 2013, Europe’s craft beer scene has exploded with new craft beer product launches more than doubling, experiencing growth of 178%.
While the US remains the single most innovative market globally, accounting for 17% of global craft beer launch activity in 2017, six of the top ten most innovative markets are now in Europe**.
“Over the last few years, the intense popularity of craft beer has migrated from North America, and the US specifically, to the UK and continental Europe. However, that’s not to say that North American consumers are over craft beer. In fact, the craft beer renaissance has proven to be a bright spot in the Canadian beer market in recent years as craft continues to capitalize on consumers’ demand for more tailored beverage experiences,” said Joel Gregoire, Associate Director, Canada Food and Drink Reports, at Mintel.
As Europeans look for new, more exciting offerings, they are embracing craft beer. Indeed, beer drinkers*** in Poland (64%), France (63%), Italy (61%) and Germany (50%) are all interested in trying different types of craft beer, such as Indian Pale Ales or other pale ales, which are already commonplace in the more mature UK craft beer market. Europeans are also willing to spend more on craft beer. Around half of consumers in Italy (52%), France (51%), Germany (46%) and the UK (45%) agree that craft beer ‘is worth the extra money.’
“Craft is the ‘new premium’ in beer and our research indicates that consumers are happy to pay more for smaller-batch, more hand-crafted options, rather than those that are mass-produced. For these consumers, craft beer taps into their desire for new experiences with a nod to the past for inspiration, offering new beer styles that they have never had before,” said Jonny Forsyth, Associate Director, Mintel Food & Drink.
While willing to pay more for craft options, it seems European consumers aren’t as informed about the difference between ‘true craft’ (eg small, independent) or a ‘craft-like’ brand owned by big, global brewers. Nearly half of Spanish consumers (45%) say it’s not clear what makes a beer craft and less than a fifth (17%) of German consumers say it would impact their purchase decision if a craft brand was owned by a large company. This points towards an uphill challenge for true craft manufacturers. But there is reason for optimism as over two in five (44%) beer drinkers in the UK would like to see a system of certification of craft beer.
“The term ‘craft’ lacks a formal definition which has enabled larger beer companies to capitalize on the craft boom, either by launching their own craft-style products or acquiring craft breweries, challenging what ‘craft’ really means for this industry. This practice of big brewers swallowing up profitable, smaller craft operators shows no signs of slowing down. An industry-wide definition could be both helpful to smaller manufacturers and welcomed by consumers the world over, as many beer drinkers want greater clarity and assistance in navigating the category,” concluded Forsyth.
*Products marketed as batch, artisan, craft, small, pale ale, IPA, India pale ale, saison, sour, porter, hops, IBU, independent, hand.
**The top 10 most innovative craft beer markets globally in 2017 include the US (No. 1, 17%), Brazil (No. 2, 9%), UK (No. 3, 8%) Norway (No. 4, 6%), Spain (No. 5, 6%), Italy (No. 6, 5%), France (No. 7, 5%), Sweden (No. 8, 4%), Poland (No 9. 3%) and Canada (No. 10, 2%).
***Internet users aged 18+ who have drunk beer in the last 6 months.