The craft beer market - Italy

1.2 The Global Market

The value of the global craft beer market has been estimated at USD ***.* billion in ****. Strong growth of the world market is expected, and it is projected to reach a value of ***.** billion USD by **** growing at a CAGR of **.**% between **** and ****. [***]

This growth will be driven by the development of new trends such as the rise of casual drinking and the increasing prominence of low-alcohol beers. In addition, go-green technology is being incorporated into the brewing process to increase market growth and innovate new ways to reduce waste and water use. The development of craft beers in recent years has also been largely attributed to the proliferation of canned beers. Consumers are becoming more health-conscious and, as mentioned above, are increasingly attracted to low-alcohol beverages, and sales of non-alcoholic and low-alcohol beers have increased as a result of increased competition with new products that improve taste. These are also much cheaper than their high-alcohol counterparts, or those with *.* percent ABV or less. Craft beer would benefit from the cost reduction if low-gravity beers become more popular, and it would be a major opportunity for the craft beer market. [***]

Worldwide today there are more than **,*** craft breweries, of which ** percent are ...

1.3 The Italian market

In Italy, the beer industry has a turnover of *.* billion euros a year, ** percent in production and ** percent in the sales and consumption distribution channel alone. The distribution chain has about *,*** enterprises generating employment for ***,*** people. Small businesses, which have enlivened the sector with craft beers, drive growth in recent years. This sector has grown by ** percent from a production standpoint. [***]

The beer industry in general is dominated by a few large groups, some of which are part of world-class multinationals. The top two groups (***). These companies are also among the leading players as importers of the approximately *,*** foreign brands marketed in Italy, along with domestic subsidiaries and distributors.[***]

The turnover generated by craft beer was about * billion euros in **** [***]

According to Unionbirrai, today in Italy there are as of **** *** craft breweries , *** "beer firms"(***) and the supply chain employs a total of about seven thousand people.

Production during **** increased by *.* percent to ***,*** hl (***) and then reconfirmed in ****. Of these, about a third are obtained from companies that directly process agricultural products. These realities are very often made by young people with profound innovations that - Coldiretti points out - range from the certification of zero kilometer origin to the direct link ...

1.4 Exports and Imports

There is no specific list for craft beers as far as international trade is concerned, however, it is interesting to note how beers are referenced by the Italian system: [***]

ANALcoholic BEER: *% to *% PLATO GRADE - up to *.*% vol. ALCOHOLIC GRADE LIGHT BEER (***): from *% to **.*% PLATO GRADE - from *.*% to *.*% ALCOHOLIC GRADE BEER: **.*% to **.*% GRADE PLATO - *.*% to *.*% ALCOHOLIC GRADE SPECIAL BEER: **.*% to **.*% GRADE PLATO - *.*% to *.*% ALCOHOLIC GRADE DOUBLE MALT BEER: above **.*% GRADE PLATO - above *.*% vol. ALCOHOLIC GRADE

Official data regarding exports and imports refer to the general beer sector. It is possible to see in the graph below how Italy is a country heavily dependent on beer imports. It is worth pointing out how, however, the craft beer market can have slightly different results. Usually those who prefer to consume craft beers, prefer to consume local or at least Made in Italy beers and therefore demand is mainly driven by domestic production, thus reducing exports of this product. Moreover, in recent years there has been an increase in the consumption of Made in Italy beers abroad as well. Specifically, in those foreign markets where beer consumption is a cultural habit and a national tradition. Such as the United Kingdom ...

1.5 Covid effect

The craft beer segment has been severely impacted by the closures imposed by the Italian government to curb the spread of Covid-**. It is estimated that there was a ** percent drop in turnover in **** and the sector only recently returned to **** levels of profitability. (***) In addition, unlike other industries, they have not received refreshments from the state. In fact, the Ateco code of brewers does not appear in the dl Ristori, which paradoxically includes both craft breweries and large multinationals, untouched by the crisis since they can enjoy the commercial outlet of supermarkets and the entire Gdo.

Despite a recent publication by Osservatorio Birra showing that, for ** percent of Italians, beer was the most consumed drink during the lockdown the entire sector is in crisis. According to the report "The creation of shared value ofthe beer sector in Italy", carried out by Althesys, the losses of shared value by the end of the year would amount to *.* billion euros, with a contraction of **.* percent compared to the **** figure. A crisis that is going to hit distribution and logistics the hardest, with Ho.Re.Ca. (***) with peaks, between March and May, of ** percent.

As mentioned in the first part of the emergency, ...

2.1 Beer consumption of Italians

Beer in Italy has always enjoyed a privileged position in Italians' preferences, second only to wine. (***)Its consumption has also been driven in recent years by the increase in per capita alcohol consumption, as the graph below shows. Within * years the latter has in fact increased from **.* liters in **** to **.* liters in ****.

Per capita alcohol consumption, by type Italy, ****-****, in liters Source: ****

Regarding the geographical distribution of consumption, the table below provides an overview of regional characteristics. As we can see, this is a fairly even distribution, with the Northeast, Center and Southeast registering the highest values on average. Calabria records the highest percentage of consumption, followed by Emilia Romagna, Friuli and Trentino Alto Adige. In contrast, Campania, Sardinia and Lombardy are the regions with the lowest beer consumption. Region Percentage Abruzzo **.* Basilicata **.* Calabria **.* Campania **.* Emilia-Romagna **.* Friuli-Venezia Giulia **.* Latium **.* Liguria **.* Lombardy **.* Marche **.* Molise **.* Piedmont **.* Apulia **.* Sardinia **.* Sicily **.* Tuscany **.* Trentino-Alto Adige **.* Umbria **.* Aosta Valley **.* Veneto **.* Source: Istat In terms of age and frequency of consumption, the graph below shows the distribution of consumption. Beer is most appreciated by the population aged **-** and **-**, who use it on average, not daily but also not seasonally.

2.2 The Profile of Craft Beer Consumers

Craft beer has now become part of Italians' consumption habits. As we can see from a study conducted by Unionbirrai on a sample of *,*** consumers, about half have been consuming craft beer for more than * years and ** percent for * to * years.

Years of craft beer consumption Italy, ****, percent Source: ****

Several motivations then drive consumers toward the purchase of craft beer. First of all, due to its production method, craft beer, as reported by ** percent of consumers, has certain intrinsic characteristics such as richer, more diversified taste and greater aroma. In addition, there are certain extrinsic characteristics that attract consumers such as being considered more genuine, natural, and higher quality for the raw materials used. In addition, some, also give importance to ethical and cultural elements such as supporting small local producers or the importance of territorial identity.

In addition, it was noted how the consumer of craft beer is on average younger than the consumer of industrial beer and how there is greater consumption by consumers from the two macro areas of Northern Italy compared to the South and Islands.

In terms of spending and average consumption, we can see that industrial beer is still the most drunk among consumers on ...

2.3 New demand trends

Several trends are likely to drive demand in the coming years, among them are:

Sour Beers or Sour Beers

In recent years, Sour Beers have established themselves as a niche product not appreciated by everyone. Recently, however, sales of these sour and strongly fruity beers have exploded in the mainstream market.

Producers have said that sour beers are actually outpacing other styles in terms of growth. Of course, we are talking about a percentage basis and not total volumes.

The reason for this increase in popularity seems to be that several Sour Beers are quite low in calories and alcohol, while still having a rich and very aromatic flavor.

CBD Beers

A number of CBD-based products have been conceived in recent months. The term CBD refers to the nonpsychotropic part of marijuana. Legal in many countries, it simply helps relieve anxiety and promote relaxation, without giving any high.

Several craft breweries are planning to launch CBD-based beers in limited runs, and if they prove really popular, production will continue for years to come.

Rosé beers

This type of beers, inspired by rosé wine, is especially convincing to the female audience who, attracted by the color, are approaching the world of craft ...

3.1 The production process

There are some slight differences in the production process of craft beer that make the sensory performance of a craft beer completely different from an industrial beer. The raw materials used are the same: water, barley malt, hops, and yeast. The process already begins with the germination of the barley malt, which develops, within the grains, the production of an enzyme, amylase: this will allow to "break" the chains of complex starches present in the cereal grain, transforming them into simple sugars ready for fermentation; which can then be "digested" by the yeast. Roasting stops germination and imparts specific colors and aromas to the malt. Hops, on the other hand, are used as a bittering agent and to impart aroma to the beer. Another extremely important element is yeast, although this is present in very small quantities, it transforms the sugars in the malt into alcohol and carbon dioxide, and makes what is a "grain soup" into beer. This part of the production process is identical between craft and industrial beers. The major differences are in the use of raw materials: The 'water in a craft beer is adjusted in acidity and hardness (***) according to the style of beer to be ...

3.2 The raw materials used

The hop industry in Italy

The number of hectares under hops cultivation in Italy in **** was estimated at **, mainly concentrated in the North Central regions, and the average area of farms interested in hops is *,*** square meters.There are *** companies reported to Agea, with a prevalence in the North Central, particularly the farms are concentrated in Emilia-Romagna, Tuscany and Piedmont with a certain trend toward expansion of production areas. Other regions strongly affected are Lombardy and Latium.[***]

Production is therefore very low and Italy imports practically all the hops it needs. On an annual basis, data in value and volume for **** show a foreign balance that is always negative, about ** million euros in value and almost * million tons in volume. The largest trading partners are European ones, on which Italy is **.* percent dependent in volume and **.* in value.

Italian hop production is practically ***% consumed by craft and agricultural breweries. The average price, according to these data, is **.** euros/kilogram for traditional hops and **.** euros/kilogram for organic hops. As for varieties, the data refer to a recent survey conducted by Unionebirrai among its members. The top four varieties used for craft beers are Citra (***), followed by Mosaic and Saaz in equal ...

3.3 The geographical distribution

The number of microbreweries, as already analyzed, has steadily increased in recent years. Regarding the geographic distribution, we can see that most regions have a relatively high number of microbreweries when compared with the number of total population. The regions with the highest number are in the North, Lombardy (***), while Brew Pubs are more residual, making up **.* percent of existing facilities.     Region Beer Firm Brewery Brew Pub Aosta Valley * * * Piedmont ** ** ** Lombardy ** *** ** Trentino South Tyrol * ** ** Friuli * ** * Veneto ** ** ** Liguria * ** * Emilia Romagna ** ** ** Tuscany ** ** ** Umbria ** ** * Marche ** ** * Abbruzzo ** ** * Molise * * * Latium ** ** ** Campania ** ** * Basilicata * ** * Apulia ** ** * Calabria ** ** * Sicily ** ** * Sardinia ** ** * Source: ****

4.1 Craft beer categories

Different categories of craft beers can be distinguished according to the type of fermentation used to produce the type of beer and the strain of yeast or bacteria responsible for it.

Low-fermentation beers:it is named Lager and the ermentation is conducted at low temperatures (***), this yeast is very clean and neutral, thus giving little aroma to the final flavor of the beer, enhancing the chosen malts and/or hops. The most popular types of beer are: Lager, Pilsner, Helles and Bock.

High-fermentation beers: these are called ALE and are fermented at temperatures between ** and **°C. They are characterized by a small amount of foam and moderate alcohol content. Such beers have a stronger flavor and aroma than low-fermented beers because of the higher content of esters, the substances responsible for most of the olfactory properties of food. These are distinguished in turn into:

Belgian, such as Trappist beers, Saison, Tripel or Dubbel; English, such as IPA (***), Bitter and Mild Ale; German.

Spontaneously fermented beers:do not require the addition of any type of yeast. The main characteristic is acidity, which varies according to the process used for fermentationì. the most famous beer styles related to this type of production are ...

4.2 Prices

The table below provides an overview of the prices of different categories of craft beer, the reference period is April ****.

Source: ****

5.1 Regulation

To be defined as such, craft beer must have certain characteristics by law. According to Law *** of **** Chapter V Art. **:

"Craft beer is defined as beer produced by small independent breweries and not subjected to pasteurization and microfiltration processes during the production phase. For the purposes of this subsection, an independent small brewery is defined as a brewery that is legally and economically independent of any other brewery, that uses facilities physically distinct from those of any other brewery, that does not operate under a license to use the intangible property rights of others, and whose annual production does not exceed ***,*** hectoliters, including in this quantity the quantities of beer produced on behalf of third parties."

In general, the beer industry is subject to strict regulation because of excise legislation. In Europe, certain goods are subject to excise tax, and alcohol is among them. Excise tax is an indirect tax that is then levied on the production or consumption of certain products (***). The tax is generally levied when these categories of goods are produced or imported into the EU.

The amount paid in excise taxes on beer reached *** million euros in ****.

Excise taxes on beer Italy, ****-****, in millions of ...

6.1 Segmentation

• BIRRA AMARCORD
• Birrone SRL
• BIRRIFICIO LARIANO SRL
• MOSTODOLCE SRL
• LOVERBEER SRL
• MICROBIRRIFICIO NAMASTE' SRL
• MICROBIRRIFICIO OPPERBACCO SRL
• Birra Peroni
• Birra Castello
• Birra Morena
• Brasserie Goudale
• Brasserie Goudale (Les Brasseurs de Gayant)
• Difcom La Cave des Pères
• International Beers and Beverages IBB