Consumers are most likely to try new or different varieties of whiskey, vodka and liqueurs. Image courtesy of Studio Romantic

A new wave of craft beverages is poised to hit the drinks industry as consumers continue to shift away from mass-produced brands towards products made with craftsmanship. Looking to replicate the explosive success of craft brewing, some distillers are exploring new ways to bring the success of the artisan trend into the spirits category by including unusual ingredients and highlighting production methods.

In an industry dominated by big-budget multinational brands, it can be difficult for smaller distillers to break into the market. Putting a twist on traditional spirits by promoting craftsmanship and artisan ingredients can give brands a niche selling point that can help to capture the attention of browsing consumers and allow them to elevate the price of products.

But while the trend has significant potential to drive innovation and diversity in the market, craft spirits are still relativity unknown. In a report by GlobalData titled ‘Opportunities in Craft Spirits’, innovation analysts explore the four big opportunities facing craft spirit distillers: encouraging experimentation; focusing on craftsmanship; highlighting health concerns; and raising awareness of craft spirits.

Encouraging experimentation with unique and unusual spirit flavours

"Consumers are most likely to try new or different varieties of whiskey, followed by vodka and liqueurs."

Consumers around the world are increasingly willing to step outside of their comfort zones by trying new and unusual products. According to GlobalData, at least 39% of global spirit drinkers are actively trying new varieties within each category, with millennials most likely to seek out variety in their spirit consumptions. This provides distillers with a unique opportunity to target experience-driven drinkers by diversifying their product portfolio.

Craft distillers should look to add variety to their products by experimenting with innovative and quirky ingredients, as well as flavour combinations that appeal to the consumer desire to try new things. Unique tastes have already begun to appear in the spirit market, for example chipotle whiskey and Ibérico ham mezcal.

Out of all the spirits, consumers are most likely to try new or different varieties of whiskey, followed by vodka and liqueurs. As such, distillers should look to expand their products within these categories where consumer demand is high. However, it should be noted that due to the long aging process of whiskey, rum and tequila, distillers should also explore creative concoctions using more flexible spirits such as gin or vodka, which take less time to distil, to maximise coverage and reduce financial risk.

Concentrating on craftsmanship and artisanal characteristics

Thanks to the explosion of the craft trend, the drinks industry has been flooded with opportunities for smaller brands to enter the market using creative and unusual concoctions to attract curious consumers. But just as the trend caught the eye of consumers, multinational brands noticed the profitable appeal of labelling products as ‘craft’.

Because there is no legal definition to govern its use, the word has become blurred as multinationals can legally use it in marketing and advertising campaigns, even when the products don’t fit the ‘official’ characteristics of craft. As a result, the word is losing its charm among many consumers, who often see terms such as ‘craft’ and ‘artisan’ as marketing gimmicks.

To distinguish truly ‘artisan’ products from multinational competitors, craft distillers need to prove their craftsmanship and authenticity to restore the craft definition and consumer trust. Weaving elements of authenticity throughout the brand by using more natural, real ingredients in the production process can help distillers to emphasise the authenticity of their products and establish a true craft label image.

Additionally, hosting events, tasting rooms and distillery tours offers consumers the opportunity to experience the distilling process and better understand the "craft" definition. These events can also help consumers determine the true craft spirit labels. Furthermore, greater consumer engagement fortifies authenticity and promotes brand loyalty and trust.

Targeting moderation and avoidance with alcohol-free drinks

"Being unknown is part of craft spirits' appeal."

Alcoholic beverages are not typically known for their health or wellbeing properties, but some craft distillers are challenging traditional perceptions by using ingredients that can appeal to health-conscious consumers. The concept has worked well in other categories, such as red wine, where moderate consumption is seen as healthy, but changing the image of alcoholic spirits is not an easy task.

In order to present an authentic image to consumers, the distiller must ensure that any marketing is not deceptive, not least because marketing any spirit as having medicinal properties faces significant regulatory and ethical obstacles. However, some distillers are including ingredients that are traditionally "therapeutic" or "restorative" to evoke purity.

Moderation has also become a key issue for drinkers, as consumers grow more concerned with what they put into their bodies. According to GlobalData, 59% of global consumers pay high attention to alcohol moderation. In addition to those looking to control or cut down on the amount of alcohol they consume, there are also millions of drinkers who choose to refrain from drinking alcohol altogether. Producing ‘no-alcohol’ craft products that target the needs of sober consumers can also help distillers to outcompete other non-alcoholic beverages in the market.

The "alcohol-free" label combined with the craft spirit ethos may persuade consumers to purchase these products. Some companies such as Seedlip are already producing non-alcoholic spirits to capitalise on the growing integration of wellness into product choices.

Raising awareness of craft spirits

While artisan may be a growing trend in the drinks market, craft spirit brands are relatively unheard of. Being unknown is part of craft spirits' appeal, but too little exposure could lead to the market's decline. Against stiff competition from multinational brands that dominate the spirits market, products produced by craft distilleries may be overlooked by browsing consumers.

This can make it difficult for small distilleries to establish themselves. However, there are ways for craft distilleries to benefit from this ‘underground’ position. The craft trend has fostered a movement of community around artisan brewing. Assuming that each distillery maintains a commitment to producing drinks with artisan, innovative qualities and opts to remain independent, the craft sprits industry has an opportunity to gain recognition without becoming mainstream, by pooling resources and working together to help break “craft” spirits into the market.

By connecting and collaborating with other distillers at events such as craft spirit festivals, or joining forces with another producer to create and promote products, smaller operations can make drinkers more aware of craft spirit brands, which can in turn spur consumer demand and facilitate growth within the market.