Europe now dominates craft beer innovation

The 185th Oktoberfest starts in Munich this weekend (22 September), shining a spotlight on age-old brewing techniques and the popularity of artisan beers. High-end, small batch and expertly-crafted beer, or ‘craft beer’ as it is more commonly known, has shot to global prominence in the span of just a few years as a primarily US trend. While craft has been around for years in Europe, the continent is now taking a global leadership role in craft beer innovation, according to new research from Mintel.

According to Mintel Global New Products Database (GNPD), only five years ago (2013) North America (and the US especially) dominated the global craft beer industry, accounting for 52% of all craft beer retail launches* compared to just 29% for Europe. Since then, the story has flipped. In 2017, 54% of launches originated in Europe, and just 19% in North America. Since 2013, Europe’s craft beer scene has experienced huge growth with new craft beer product launches more than doubling, experiencing growth of 178%. While the US is still the single most innovative market globally, with 17% of all global craft beer launches originating there in 2017, six of the top ten most innovative markets are in Europe**.

Jonny Forsyth, Associate Director, Mintel Food & Drink, said:

“Over the last few years, interest in craft beer has migrated from the US into the UK and now into continental Europe. Our research suggests that Europeans are embracing craft beer because they are looking for new, more exciting offerings compared to their usual beer options, especially in markets such as Germany, where brewers and beer styles have remained unchanged for centuries. While markets like Germany, Belgium and Czech Republic are still dominated by their own beer styles when it comes to innovation, consumer interest in craft beers is already there and offers ample opportunities for manufacturers.”

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 common place in the more mature UK craft beer market. Europeans are also willing to spend more on craft beer. Around half of beer 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 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 drunk before.” Jonny continues.

However, Mintel research reveals that European consumers do not care too much about the difference between a ‘true craft’ beer (i.e. small, independent) or a ‘craft-like’ brand owned by big global brewers. Nearly half of Spanish beer drinkers (45%) say it’s not clear what makes a beer craft and less than a fifth (17%) of German beer 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 capitalise 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 European consumers, as many beer drinkers want greater clarity and assistance in navigating the category.” Concludes Jonny.

*Products marketed as batch, artisan, craft, small, pale ale, IPA, India pale ale, saison, sour, porter, hops, IBU, independent, hand.

**The UK is the third most innovative craft beer market globally, with 8% of all innovation, ahead of Norway (No. 4, 6%), Spain (No. 5, 6%), Italy (No. 6, 5%), France (No. 7, 5%) and Sweden (No 8, 4%).

***internet users aged 18+ who have drunk beer in the last 6 months