Food Grade Alcohol Market To Hit Value .2 Billion By 2030 |Grand View Research, Inc.

Posted by Mrudula Anil Karmarkar on April 26th, 2023

The global food grade alcohol market size is expected to reach USD 3.2 billion by 2030, as per the new report by Grand View Research, Inc. registering a CAGR of 4.3% over the forecast period. The demand is attributed to the increase in consumption of food & beverages by the consumers and the increase in application in personal care, food & beverage, and pharmaceutical industries.

Alcohol is an important ingredient for manufacturing extracts, flavors, yeast, and vinegar. The demand for ethanol has increased in the food industry to expand the shelf life of the product, driven by the changing habits and adoption of ready-to-eat food. The product plays an important role in the healthcare industry owing to its use in the preparation of medicines and sterilizing various medical equipment before use.

Changing consumer behavior and the quality of raw materials used in the production of the product have a significant impact on industry dynamics. Corn, barley, wheat, barley malt, and milo are the most common raw materials used in the manufacturing of the product. These are natural sources that are fermented and then distilled to produce beverages. Because raw resources are so reliant on nature, the industry must evaluate climate change and yield trends in order to efficiently forecast the supply of these products.

Personal care products signify a large category of products that are consumed on a day-to-day basis by a large population. The changing demographics coupled with rising awareness about new beauty trends due to the growth of social media has led to rising demand for these products. The product finds application in product categories such as cleaning formulations, anti-aging creams, anti-inflammatory, anti-wrinkle, anti-dandruff and moisturizing products. The product is used in the above products as a preservative and also to improve antimicrobial properties.

The demand for the product is anticipated to be driven by an increase in demand of spirits and beers in various economies.Growth in the food processing industry coupled with increasing consumption of ethanol is projected to drive the market growth.

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The market growth for the product is expected is driven by increasing application ‘in food and beverage, healthcare and pharmaceuticals, and personal care. Rising consumption of beverages and trade in alcohol are further propelling the demand for the product. Alcohol is an important ingredient for manufacturing extracts, flavors, yeast, and vinegar. The demand for ethanol has increased in the food industry to expand the shelf life of the product, driven by the changing food habits and adoption of ready-to-eat food. The product plays an important role in the healthcare industry owing to its use in the preparation of medicines and sterilizing various medical equipment before use.

Ethylene and sugars are the most common basic materials utilized in the synthesis of food-grade alcohols. Both of these products are used to make ethanol, which is one of the most widely used food-grade alcohols. Polyols are sugar replacements that are commonly used in food preparation. They are mostly made from fruits through the extraction of natural sugars.

Corn, which is one of the most important ingredients in the production of the product, is widely available in the country. To take advantage of the cost and supply of raw materials, manufacturers have entered into supply agreements with farm owners. Furthermore, as part of their forward integration goal, prominent firms in the country have developed their own line of breweries.

Food Grade Alcohol Market Report Highlights

  • Molasses & sugarcane segment accounted for more than 30.0% revenue share in 2021. The growth is attributed to the increase in its utilization in alcohol production.
  • Coloring & Flavoring agent function dominated the market with 40% of the total market revenue in 2021 owing to its consumption as an additive in adding color and enhancing flavor in food extracts.
  • Beverage application is anticipated to grow at the highest CAGR of 4.9% from 2022 to 2030 in terms of revenue. The growth is anticipated due to increase an increase in consumer spending on food & beverages which in turn is driving the demand for the product.
  • Pharmaceutical segment was the second largest dominating market in 2021 accounting for 21% of the total market share. The growth is witnessed due to an increase in consumer spending on alcohol-based medicine to cure various diseases.
  • Cultural changes, economic development, affordability, and availability of alcohol along with the effectiveness and level of its policies are key factors driving the alcohol demand.
  • Cosmetics and toiletries that comprise hand sanitizer account for a higher share of industrial alcohol in the country, which are further estimated to trigger the market growth.

The ethanol segment dominated the market with more than 70% market share in 2021. The demand is attributed to the increase in alcohol production globally.Ethanol also called grain alcohol can be derived from various sugar, fruit, and starch sources such as sugar cane, sweet sorghum, corn, wheat, potatoes, etc. Among these, corn starch is used on a large scale for sourcing ethanol due to largescale availability of raw material. Ethanol can be produced using the dry and wet milling processes.

Polyols are expected to register a CAGR of 4.7% over the forecast period. The growth is anticipated due to an increase in its consumption as sugar alternatives in several food products such as candies, cakes, and other baked items.They improve the overall quality of food by adding texture, color, and flavor to it. Polyols are commercially generated from carbohydrates such as glucose, starch, and sucrose. Sorbitol, mannitol, maltitol, lactitol, isomalt, xylitol, and erythritol are some of the most often utilized polyols.

The global is highly competitive with the big international brands focusing on the development of long-term relationship with the end-users. With the further increase in the food & beverage, pharmaceuticals, and personal care sector, the competition is anticipated to increase in the coming years.

Companies such as Cargill Incorporated, ADM, Grain Processing Corporation, and Greenfield Global Inc. have a high degree of integration across the value chain as they are also engaged in the production of the product. These companies have established themselves as key manufacturers and focus on research and development for novel uses of the product. 

List of Key Players in Food Grade Alcohol Market

  • MGP
  • Cargill Incorporated
  • ADM
  • Cristalco
  • Grain Processing Corporation
  • Wilmar International Ltd.
  • Extractohol
  • Pure Alcohol Solutions

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Mrudula Anil Karmarkar

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Mrudula Anil Karmarkar
Joined: July 2nd, 2020
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