Reusable Barrels Market Analysis

A reusable barrel is a hollow cylindrical container originally built of wooden planks and held together with wooden or metal hoops. Reusable barrels were utilized in the wine industry in three ways, providing flavours like vanilla, clove, smoke, and coconut. Certain bourbon barrels that do not meet the standards of ageing distilled spirits are further used for décor. Rising disposable income and increased spending on remodeling activities is expected to aid the growth for reusable barrels during the forecast period. For instance, according to Trading Economics Statistics on the U.S. Disposable Personal Income, the disposable personal income in the U.S. was on an average US$ 5,200.2 Billion in 1959, reaching an all-time high of US$ 15,742.81 Billion in November 2018. Moreover, according to the Leading Indicator of Remodeling Activity (LIRA) released by Remodeling Futures Program, the spending on home repair and renovation in the U.S. has increased from 6% in the first quarter of 2018 to 6.3% by the end of second quarter of 2018.

The global reusable barrels market is estimated to surpass US$ 140.1 Million by the end of 2028, in terms of revenue, exhibiting at a CAGR of 3.8% during the forecast period (2021 to 2028).

Drivers

During the forecast period, the market is likely to be driven by increasing demand for scotch whisky market. Reusable barrels are widely used in scotch whisky distilleries for maturing of whisky. The growth of scotch whiskey market is expected to drive demand for reusable barrels from the scotch whisky distilleries. The market for scotch whisky is driven by rising demand for premium and high-quality alcoholic beverages, owing to increase in the purchasing power of consumers. For instance, according to Organization for Economic Co-operation and Development, Italy’s per capita disposable income was valued at US$ 31,188 in 2018, which increased to 32,647 by 2019.

Global reusable barrels market is expected to witness growth, owing to multiple advantages associated with the use of bourbon aged barrels.  Due to stringent regulations, the American whisky manufacturers cannot reuse bourbon aged barrels. However, these barrels are used for distilling other beverages and are used to add unique flavour to scotch whisky, rum, tequila, beer, and others. Moreover, bourbon aged barrels are less costly than sherry casks, which makes it a favourable barrel used in scotch whisky market. The bourbon aged barrels helps in imparting sweetness, scented vanilla, and golden honey flavours to the scotch whisky. It also helps in better preservation of single malt whisky’s primary fruity character.

Europe dominated the global reusable barrels market in 2020, accounting for 57.8% share, in terms of revenue, followed by North America and Latin America respectively. As a result of increase in demand for scotch whisky industry.

Figure 1. Global Reusable Barrels Market, Revenue Share (%), By Region, 2020

Market Restraints

The volatile nature of the raw material used to make barrels, such as oak, which produces volatile compounds when burned, is restricting the expansion of the global reusable barrels market. Over the forecast period, increased demand for cost-effective and efficient packaging solutions is expected to generate an opportunity for the global reusable barrels market. Moreover, the expense of the American oak barrels and availability of oak may restrict the global reusable barrels market.

Market Opportunities

The increasing application of reusable barrels in décor is projected to bring new market opportunities in the forecast period. From a décor perspective, the use of reusable barrels in bars, lounges, and restaurants to represent the quality of the restaurants may increase demand for reusable barrels. Another important factor is transportation, as reusable barrels are meant to be readily stored and transported between sites. Other alternatives, such as steel containers, would require different storage and transportation setups than reusable barrels alternatives, which combine storage and transportation functions. This improves the cost-effectiveness and efficiency of using reusable barrels. Reusable barrels can now be used in a variety of ways due to the growth of social media. The forecast for the reusable barrels market has improved as a result of the trend.

Figure 2. Global Reusable Barrels Market – Opportunity Analysis

Market Trends

The increased adoption of recyclable raw materials for barrel manufacturing is a significant trend in the global reusable barrels market. One of the main factors driving the global reusable barrels market is the change from traditional materials to biodegradable materials for barrel manufacturing, which is being driven by strong environmental legislation around the world aimed at lowering carbon emissions. Furthermore, one of the major trends is the growing demand for efficient and safe transportation of bulk materials. The global reusable barrels market is also growing due to the vast product array supplied by manufacturers in terms of various shapes and sizes.

Figure 3. Global Reusable Barrels Market, Revenue Share (%), By Material Type, in 2020

On the basis of material type, American oak wood dominated the global reusable barrels market in 2020, accounting for around 48.4% of market share, in terms of revenue, followed by French oak wood and others, owing to increasing demand for lightweight products in automotive industry.

Global Reusable Barrels Market - Impact of Coronavirus (Covid-19) Pandemic

The COVID-19 has negatively affected global reusable barrels market. Due to the forced shutdown of bars, pubs, and restaurants, wineries around the world are suffering the impacts of the COVID 19 outbreak. Global reusable barrels market financial flows have been affected by temporary closures of wineries. However, with the advent of home deliveries and internet stores, demand for alcoholic beverages is anticipated to prevail. A temporary imbalance between supply and demand might result from a disruption in the supply chain. Due to the expected reduction in wine sales due to low imports for the year 2020, several wineries have paused or decreased their production capacity. As a result, in the short term, this could restrict the growth of global reusable barrels market.

Competitive Section

Key players operating in the global reusable barrels market include Annandale Distillery, Rocky Mountain Barrel Company, Exotic Barrels, Esty Inc., Midwest Barrel Co., Mystic Barrels, Red Head Barrels, Kentucky Bourbon Barrel (Independent Stave Company), Country Connection, and Kelvin Cooperage.

Few Recent Developments

In December 2019, Midwest Barrel Co., a producer and distributer of used wine and whiskey barrels entered into a strategic partnership with Willett Distillery, a manufacturer of Kentucky bourbon and Kentucky whiskey. The agreement will make Midwest Barrel Co. sole source for ultra-premium Willett barrels.