The SNS Insider report estimates the Food Grade Alcohol Market size at USD 2.41 billion in 2023, with a projected CAGR of 4.2% to reach USD 3.38 billion by 2031.
The surge in food-grade alcohol applications across various sectors, including personal care, food and beverage, healthcare, and pharmaceuticals, has been a key driver of market growth. This demand is fueled by the expanding liquor and beverage industry, which relies on food-grade alcohol produced through plant and grain fermentation processes like wheat, corn, and barley. Increased sales of alcoholic beverages like brandy, whiskey, and beer are expected to further boost market growth.
Additionally, the growing ethanol use in beer and alcohol production has contributed to increased demand for food-grade alcohol. Factors such as population growth, rapid urbanization, and the need for high-quality food products, as well as the role of food-grade alcohol in food preservation, are anticipated to drive market expansion. Moreover, the rising adoption of food-grade alcohol in alcohol and pharmaceutical production is expected to accelerate market growth. Despite these opportunities, stringent regulations governing alcohol production and distribution
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Some of the Key Players Included are:
The major key players are Cargill Incorporated, MGP, ADM, Cistalco, Fonterra Co-operative, Archer Daniels Midland Company, Wilmar International Ltd., Extractohol, Pure Alcohol Solutions, Grain Processing Corporation, and other key players mentioned in the final report.
Segment Analysis
Molasses and sugarcane together contribute more than 40% of the market share, benefiting from abundant raw material resources in major producing regions. Sugarcane thrives in tropical climates, allowing for year-round cultivation and multiple harvests annually. Molasses, a common byproduct of sugar refining near cane-growing areas, complements this supply. A few leading countries dominate sugarcane output, ensuring cost-effective production chains for converting molasses into fuel and industrial alcohol. This concentrated production enhances supply chain resilience and supports export-oriented refining sectors. Surplus molasses is utilized as distillery feedstock, further diversifying its applications. Continued agricultural advancements tailored for tropical climates bolster cane yields and molasses recoveries, ensuring a steady and affordable resource base for alcohol production. Alternative feedstock struggle to compete due to limited raw material availability.
By Product
- Ethanol
- Polyols
By Source
- Fruits
- Sugarcane & Molasses
- Grains
- Others
By Function
- Coloring & Flavoring Agent
- Preservative
- Coatings
- Other
By Application
- Healthcare & Pharmaceutical
- Beverages
- Food
- Personal Care
- Others
Competitor Insights
Numerous companies are expanding production facilities and capabilities, enhancing distillation and purification methods for increased efficiency and output. They prioritize product purity and safety while continuously refining quality control processes to meet rigorous regulations and industry norms. Diversification of product offerings is another focus, with manufacturers exploring various types of food-grade alcohol like ethanol and methanol, as well as new raw material sources. Additionally, eco-friendly practices are being adopted, including the use of renewable energy, water conservation, and waste reduction initiatives.
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Recent Developments
January 2024: Associated Alcohols & Breweries, a leading player in the alco-beverage industry and a key entity in the Associated Kedia Group, introduced its latest product: ‘NICOBAR’, a meticulously crafted premium gin.
January 2024: Nestle and KosmodeHealth are exploring strategies for product innovation to strengthen their partnership and enhance value creation.
September 2023: DoorDash expand its partnership with Aldi for alcohol delivery to 1,200 stores across 21 states, part of DoorDash’s efforts to broaden its services amid competition from Instacart gearing up for its IPO.
September 2023: Greenfield Global Inc., a major provider of high-purity and specialty alcohols, solvents, and custom solutions, partnered with REMET Alcohols, Inc. to meet the rising demand for bulk and packaged high-purity alcohol, as well as denatured alcohol, in California and the Western US.
Impact of Russia-Ukraine War on Food Grade Alcohol Market
The conflict between Russia and Ukraine has severely disrupted the supply chain of food-grade alcohol, causing shortages and price surges in the market. This strain has particularly affected the availability of food-grade wine. The International Organization of Vine and Wine (OIV) has highlighted the significant challenges facing the $300 billion global wine industry, exacerbated by climate change and the ongoing conflict. These factors have compounded the industry’s struggles to recover from the pandemic, squeezing both sales and production on a global scale. An alarming incident illustrating the war’s impact on the wine industry involved the tragic bombing and destruction of a warehouse holding approximately $16 million worth of wine inventory. This facility not only stored wine but also played a vital role in preparing and delivering meals to hospitals, territorial defense, and Ukraine’s Armed Forces.
Furthermore, trade restrictions and embargoes between Russia and Ukraine have exacerbated the situation, hindering the flow of food-grade alcohol and disrupting import and export activities. Market players have been forced to seek alternative sources or face significant disruptions in their supply chains as a result.
Regional Analysis
Europe leads the food-grade alcohol market due to its robust food and beverage sector, stringent regulations, and focus on quality. Consumers favor organic and sustainable sources. Key contributors include the thriving beverage industries in France, Germany, and Italy, alongside pharmaceutical and cosmetic sectors. European market players prioritize sustainability and innovation, shaping global trends in food-grade alcohol.
Key Takeaways:
- The global food-grade alcohol market is set for substantial growth, driven by its expanding utilization in the pharmaceutical industry.
- Strategic alliances, investments, cooperative ventures, product introductions, and advancements among companies play a pivotal role in securing essential components, expertise, and market positioning.
- The market is growing due to increased food demand from a growing population.
- Europe dominates the food-grade alcohol market due to rising alcohol consumption across industries like food, pharmaceuticals, and cosmetics & personal care in European countries.
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