According to Forbes, a recent report released on Wednesday by UBS Securities has said that the craft beers fad may finally have evened out but that craft theme is developing rapidly in the spirits sector.
Surveying 1,200 regular alcohol consumers, the company said: “The percentage of consumers that enjoy (spirits) brand experimentation and that view craft brands as cool has grown by 8 to 13 percentage points in the past two years.”
Following recent price changes, big brands such as Diageo’s Crown Royal as well as Smirnoff and Captain Morgan have seen shares increase recently.
Speaking to Forbes, Colin Blake, director of spirits education for Moonshine University, said: “We have seen an explosion of craft distilleries. From over 500 people who have taken our week-long course, some 140 distilleries have opened after the founder took our class,” Blake said.
“Big Kentucky distillers such as Jim Beam and Maker’s Mark, both owned by Suntory Beam, a unit of Japanese beverage giant Suntory, are onboard. So is Louisville-based Brown-Forman, which makes Jack Daniel’s, Early Times and other brands.” Blake said.
“When we told them what we were doing, they were supportive. If someone tries a craft Bourbon and it tastes bad, that’s bad for the whole industry. Craft distillers are just good for the industry at large,” he continued.
The Forbes piece pointed out that several large distilleries have been adding craft distillers to their portfolios. The New York-based Constellation Brands, which makes Black Velvet Canadian Whiskey and Svedka Vodka as well as more, bought craft Whiskey maker High West last year for $160 million. Indeed, Constellation shares have increased by more than 35% so far this year.
According to Allen Katz, director of mixology & spirits education for Southern Glazer’s Wine and Spirits, the trend to craft liquor has been a long time coming. “If you take the long view, it is a 45-year arc that starts with a food movement. It began with Alice Waters’ Chez Panisse restaurant in Berkeley, California. They looked for local food and more importantly looked at where the food originated.” Katz told Forbes.
Back in October 2016, Fortune ran an article detailing to rise of craft distilleries across the US.
According to the magazine, The U.S. spirits industry is at long last enjoying a “craft” movement that is beginning to mirror the success craft brewers have enjoyed in the last half-decade or so.
The magazine said: “In a broad study backed by the American Craft Spirits Association that is being billed as a first-of-its-kind deep dive into the craft spirits movement, the industry has reportedly achieved $2.4 billion in retail sales in 2015, growing at a compound annual growth rate of 27.4% in volume. The market share for craft spirits reached 2.2% in volume last year, up sharply from 0.8% in 2010.”
“This growth—bolstered by the 1,315 craft distillers that are active in the U.S. today—is expected to get continued support from retailers and wholesalers, likely because they’ve seen the success craft brewers have achieved in the beer world. Within beer, craft producers now control about 12% of volume and are posting growth that far exceeds the total category. There are also well over 4,200 craft breweries today, far more than the amount of distilling peers.”