Attitudes towards Craft Alcoholic Drinks - UK - August 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Consumer cutbacks on alcohol affect the craft segment
Ageing UK population to hinder craft drinks
New craft entrants heat up the competition in alcoholic drinks
Companies and brands
Leading players continue to acquire craft brands
Few alcohol launches use the term ‘craft’ on-pack
Larger companies look to tap into the craft trend
NPD trends include standout packaging, flavours and low/no alcohol
Craft brands raise their profile by linking with music and movies
The consumer
Three in 10 adults buy craft drinks
Figure 1: Buying of standard and craft alcoholic drinks, June 2018
Price and brand are key influences on alcohol buying
Craft labels have little influence even on craft buyers
Figure 2: Alcoholic drinks buying factors, June 2018
Strong links between craft alcohol buying and foodie-ism
Unique flavour and quality ingredients are the most widely seen as important for craft
Figure 3: Factors seen as most important for an alcoholic drink to be considered ‘craft’ , June 2018
Flavour profile labelling and quality awards can help craft drinks to win new users
Figure 4: Behaviours relating to craft alcoholic drinks, June 2018
Craft drinks enjoy a strong feel-good factor
Figure 5: Craft alcohol buyers’ behaviours, June 2018
Consumers are split on the importance of heritage
Figure 6: Attitudes towards craft alcoholic drinks, June 2018
What we think
ISSUES AND INSIGHTS
Perception that acquisitions lead to a decline in quality pose an issue for    large companies taking over craft brands
The facts
The implications
Craft drinks in on-trend flavours should appeal
The facts
The implications
Scope to further mine the feel-good factor around craft drinks
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Consumer cutbacks on alcohol affect the craft segment
Ageing UK population to hinder craft drinks
New craft entrants heat up the competition in alcoholic drinks
MARKET DRIVERS
‘Craft’ term remains unregulated
Multiple factors affect alcohol prices
Inflation hits the category
Scotland introduces minimum unit price for alcohol
Stronger craft cider could be hit by extra duties
A third of buyers have cut back on alcohol for health reasons
Ageing UK population offers little support to craft drinks
Smaller brands benefit from supermarkets expanding their craft ranges
Continued growth in breweries and distilleries
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Leading players continue to acquire craft brands
Few alcohol launches use the term ‘craft’ on-pack
Larger companies look to tap into the craft trend
NPD trends include standout packaging, flavours and low/no alcohol
Craft brands raise their profile by linking with music and movies
TAKEOVERS AND ACQUISITIONS
Acquisitions of smaller brands in various alcoholic drinks sectors from 2013-18
Figure 7: Selected acquisitions of craft brands by major companies^, 2013-18
Beer
Heineken moves on two craft brands
Beavertown acquisition provokes a backlash in some quarters
Carlsberg snaps up troubled London Fields
Fullers takes over Dark Star
Lion of Australia buys Fourpure
White Spirits
Beam Suntory looks to reassure consumers after Sipsmith acquisition
Cider
Molson Coors acquires Aspall
BrewDog looks to shake up the cider market with Hawkes investment
LAUNCH ACTIVITY AND INNOVATION
Few alcohol launches use the ‘craft’ term on pack
Gin boom drives rise in small-batch gins
Figure 8: UK alcoholic drinks launches, by selected terms featured on-pack, 2014-18 (sorted by 2017)
Heineken puts the spotlight on its brewers with Maltsmiths
Figure 9: Example of Heineken’s Maltsmiths brand, 2018
Pub chains collaborate with craft brewers
Retailers expand their own-label alcohol ranges with craft products
Beer
White spirits
Figure 10: Examples of own-label craft alcoholic drinks, 2017-18
Craft brands explore unusual flavours
Craft brewers extend into other categories
Low/no alcohol beers from craft brewers emphasise their full flavour
Giving further detail on low/no alcohol products’ flavour
Figure 11: Low/no alcohol craft beer launches, UK, 2017-18
Unusual packaging formats help with on-shelf standout
Craft brewer unveils beer in wine-style bottles
The Uncommon launches English wine in a can
Beer Hawk adds to Beer Bullets range
Figure 12: Beer Hawk Beer Bullet plus beers included, UK, 2017
Craft brands take inspiration from a variety of sources
Ethical products from craft brands should boost feelgood associations
McGuigan launches small-batch wines
ADVERTISING AND MARKETING ACTIVITY
BrewDog republishes its recipe book
Maltsmiths highlights its perfectionism
Camden Town launches its first TV campaign
Outdoor campaign focuses on pleasure
Craft brands raise their profile at cultural events
Linking with music and film
Music event with craft beers promoted as way for people to support local industry
Tiny Rebel sponsors Spotify playlists
Whitley Neill invites people to inhale ‘gin mist’
THE CONSUMER – WHAT YOU NEED TO KNOW
Three in 10 adults buy craft drinks
Price and brand are key influences on alcohol buying
Craft labels have little influence even on craft buyers
Strong links between craft alcohol buying and foodie-ism
Unique flavour and quality ingredients are the most widely seen as important for craft
Flavour profile labelling and quality awards can help craft drinks to win new users
Craft drinks enjoy a strong feelgood factor
Consumers are split on the importance of heritage
BUYING OF STANDARD AND CRAFT ALCOHOLIC DRINKS
Three in 10 adults buy craft alcohol drinks
More men than women buy craft
Figure 13: Buying of standard and craft alcoholic drinks, June 2018
Ale/bitter is the most widely bought craft alcohol type
Uptake of craft white spirits is low despite the buzz around gin
Figure 14: Buying of standard and craft alcoholic drinks, by drinks type, June 2018
ALCOHOLIC DRINKS BUYING FACTORS
Price is the primary influence on alcoholic drinks buying
Introductory offers can help challenger brands to attract users
Figure 15: Alcoholic drinks buying factors, June 2018
Brand loyalty is strong in alcohol
Brand loyalty is on a par between craft and standard alcohol buyers
Craft label has little influence even on craft buyers
EXPERTISE AND INTEREST IN TRENDS AMONG  ALCOHOLIC DRINKS BUYERS
Over half of people who follow food/drink trends buy craft alcohol
Various opportunities for craft producers to build associations with food trends
Trendy on-trade venues will need to ensure good selection of craft drinks
Figure 16: Expertise and Interest in Trends among alcoholic drinks buyers, June 2018
A third of buyers like to be the first to try new alcoholic drinks
Sense of connoisseurship is higher among younger consumers
FACTORS SEEN AS MOST IMPORTANT FOR CRAFT ALCOHOLIC DRINKS
Flavour and ingredients are most widely seen as important for craft
Figure 17: Factors seen as most important for an alcoholic drink to be considered ‘craft’, June 2018
Many who prioritise unique flavour also prioritise quality ingredients
Hand-made products signal craft to a third
Figure 18: Heat map of areas seen as indicating a craft product^, June 2018
Ownership is seen as important by three in 10
Acquisitions of craft brands by larger companies can lead to a backlash
Need for large companies acquiring craft brands to reassure the public
Small-batch production is associated with craft by three in 10
Small-batch production carries some quality associations …
…but has little effect on buying
BEHAVIOURS RELATING TO CRAFT ALCOHOLIC DRINKS
Various opportunities for craft drinks to attract new users
On-shelf labelling on flavour profile appeals particularly to under-35s ...
Figure 19: Behaviours relating to craft alcoholic drinks, June 2018
… and would encourage 40% of non-users to buy craft
Quality awards would encourage half of alcohol buyers to buy craft
Collaborative drinks enjoy wide appeal
CRAFT ALCOHOL BUYERS’ BEHAVIOURS 
Strong feel-good factor for craft drinks
Figure 20: Craft alcohol buyers’ behaviours, June 2018
Recommendations are key to driving trial of craft drinks
‘Shared wisdom’ marketing messages can allow brands to harness the power of recommendations
ATTITUDES TOWARDS CRAFT ALCOHOLIC DRINKS
Consumers are split on the importance of heritage
Good opportunities for small-batch variants from established brands
Figure 21: Attitudes towards craft alcoholic drinks, June 2018
Only a minority feel that own-label drinks cannot be craft
Tangible references to production methods can help own-label to build a craft positioning
Collaborations between own-label and craft brands should appeal
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – FACTORS SEEN AS MOST IMPORTANT FOR CRAFT ALCOHOLIC DRINKS
Figure 22: Original images of products featured in focus group study of on-pack terms seen as indicating a craft product, June 2018