Food Grade Alcohol Market Size, Share & Trends Analysis Report By Product (Ethanol, Polyols), By Application (Healthcare), By Source, By Function, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global food grade alcohol market size was valued at USD 2.2 billion in 2021 and is anticipated to grow at a compound annual growth rate (CAGR) of 4.3% from 2022 to 2030. 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.

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.

Product Insights

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.

Source Insights

Molasses & Sugarcane sources dominated the food grade alcohol market with the highest share of more than 30% of total revenue share. The demand is attributed as it is a prominent source of food-grade alcohol production.Key countries sourcing alcohol from sugarcane and molasses include Brazil, India, China, and Thailand owing to abundant raw material availability.

The grains segment is expected to grow at a CAGR of 4.5% over the forecast period. The growth is anticipated due to its consumption in the production of various types of alcohol. Different types of grains used in alcohol production are wheat, corn, maize, and rice. Corn and rye are widely used in the manufacturing of whiskey around the world. The primary purpose of rye grain is to provide flavor to the finished product. These grains are widely utilized in countries like the U.S. and Canada. Rice, a widely produced crop around the world, is used in the manufacturing of distilled spirits in India and Japan in small but significant amounts. Barley grain is also used in great numbers for the production of beer and whiskey all over the world. Wheat is only utilized when maize is in limited supply due to the expensive expense of production.

Lignocellulose biomass is another source for making food-grade alcohols. Agricultural wastes such as maize stover, crop straws, bagasse, and husks, as well as herbaceous crops like switchgrass, make up the biomass. The biomass is mostly made up of lignin, cellulose, and hemicellulose. Due to the insolubility and difficult fermentation of pentose sugars, the use of lignocellulosic biomass for alcohol production is more involved and less cost-effective than other feedstocks. Pretreatment and enzymatic hydrolysis are the two most expensive aspects of producing alcohol from lignocellulose biomass. For a more efficient end, these procedures are linked to one another.

Function Insights

The coloring & Flavoring agent segment accounted for the major market of over 40% of the total revenue share. The growth is anticipated to the consumption of alcohol as a food additive which aids the distribution of colors, and helps in enhancing the flavor of food extracts. Vanilla extract, the most widely used flavoring, is prepared by soaking vanilla beans in a solution of water and ethanol. Polyols like sorbitol and isomalt are also utilized in a variety of culinary products as flavoring and coloring additives.

Coatings are expected to register second-highest CAGR of 4.4% over the forecast period. The growth is anticipated due to its extensive utilization as a plasticizer in edible film coatings in food applications. The edible film is a thin layer functioning for packaging or coating food ingredients. They operate as an oxygen barrier, reduce water evaporation, and improve the appearance of packaged products. Sorbitol lowers internal hydrogen bonding in intramolecular bonds when employed as a plasticizer, resulting in increased mechanical strength. Apart from that, ethanol is utilized as a coating agent in a variety of food products. For example, in confectionery items, shellac soaked in ethanol solvents is commonly used to polish chocolates and sugar syrups.

Cosmetics such as creams, lotions, serums, shampoos, and hair conditioners frequently use food-grade alcohol as a preservative. Rich plant oils, emulsifiers, and herbs are commonly blended with pure food-grade alcohol. They work as a carrier, delivering these skin-beneficial nutrients to the skin instantaneously.

Application Insights

Beverages applications accounted for more than 20% of the total revenue share in 2021. The growth is anticipated to increase in consumption of beverages among the population. With the increase in the young population in various regions is driving the demand for consumption of alcohol among the population. Rising demand for exotic flavors and unique beverages has also contributed to the development of microbreweries that provide innovative craft beers to highly interested consumers. Imported beers are also witnessing huge demand in APAC despite high prices owing to an improved standard of living and rising indulgence in social activities.

The personal care segment is expected to grow at a CAGR of 4.6% over the forecast period. The growth is anticipated to increase in consumption of personal care products and increase health awareness among people. Food grade alcohols are used as a natural preservative in natural cosmetic products such as creams, serums, shampoo, hair conditioners, and lotions. It is combined with nutrient-rich herbs, plant emulsifiers, and plant oils acts as a carrier and deliver beautifying nutrients immediately into the skin. The product used in personal care applications including anti-bacterial soaps, hairsprays, soft gels, perfumes, deodorants, facial astringents, spray sunblocks, mouthwashes, and toothpaste.

Before injections, the skin is sterilized using food grade alcohols. In the healthcare and pharmaceutical industries, it's also utilized to sterilize medical devices. Two major producers of active pharmaceutical ingredients are China and India, whose supply chains has impacted owing to this pandemic lockdown and a limited number of typical workforce. However, pharmaceutical manufacturers across the world are working with the help of government support to overcome this coronavirus (COVID-19) outbreak. Hence, the consumption of the product in pharmaceutical applications is expected to have a positive impact on the market.

Regional Insights

Europe region accounted for 34% of revenue market share in 2021. The demand is attributed to the increase in consumption of food & beverages with an increase in more consumer spending in the region. Europe is one of the major consumers of alcoholic beverages with substantial variation in eh demand patterns across the region. Cultural changes, economic development, affordability, and easy availability of alcohol are key factors for high alcohol consumption in the region.

North America region is anticipated to register the highest CAGR of 4.5% over the forecast period. The growth is expected due to an increase in consumption of food products manufactured by using food-grade alcohol. Because of its versatility in producing a wide range of culinary flavors, the product is gaining favor among customers as well as food and beverage makers.

Asia Pacific is estimated to emerge as the fastest-growing region, in terms of consumption of the product, from 2018 to 2030. The growth in the region can be attributed to the growing consumption of the product from emerging economies such as India, China, and Japan. The increase in per capita income and growing population, especially in China and India, coupled with plentiful accessibility of raw materials is anticipated to fuel the product market growth.

Key Companies & Market Share Insights

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. Some of the prominent players in the food grade alcohol market include:

• MGP

• Cargill Incorporated

• ADM

• Cristalco

• Grain Processing Corporation

• Wilmar International Ltd.

• Extractohol

• Pure Alcohol Solutions

Food Grade Alcohol Market Report Scope

Segments Covered in the Report 

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global food grade alcohol market report on the basis of product, source, function, application, and region:

• Product Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Ethanol

  • Polyols

• Source Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Molasses & Sugarcane

  • Fruits

  • Grains

  • Others

• Function Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Coatings

  • Preservative

  • Coloring & Flavoring Agent

  • Other

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Healthcare & Pharmaceutical

  • Food

  • Beverages

  • Personal Care

  • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

    • Italy

    • Spain

    • Hungary

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Indonesia

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • Saudi Arabia

    • UAE