Global Food Grade Alcohol Market Report and Forecast 2024-2032

Global Food Grade Alcohol Market Size

The global food grade alcohol market value was around USD 8.61 billion in 2023. The market is further expected to grow in the forecast period of 2024-2032 at a CAGR of 5.4% to reach approximately USD 13.85 billion by 2032.

Global Food Grade Alcohol Market Growth

The primary driving force aiding the market growth for food grade alcohol is the rise in consumer income and expenditure, and expanding urbanisation, leading to the growth in the processed food industry. This surge in demand for food ingredients is expected to enhance the food grade alcohol market opportunities. Additionally, consumption of alcoholic beverages, as a part of social meet and greet events has aided the demand in food and beverage applications.

Various alcohol-based ingredients, such as polyols, find extensive use in the pharmaceutical and nutraceutical industry, in the form of dietary supplements, functional food and beverages, and sanitisation products, among others.

Meanwhile, fluctuating prices of raw materials and stringent regulations can obstruct the market growth. However, due to new product development and the shift of associated products from the luxury segment to the essentials segment, these hurdles are anticipated to be negligible in the forthcoming years.

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Global Food Grade Alcohol Market Share

Among the various applications, the beverage segment is estimated to continue dominating the market over the forecast period with countless alcohol beverage products, such as beer, wine, whiskey, and other liquors, gaining popularity all over the world. The food industry primarily utilises alcohol in select products as an additive, preservative, or added flavour.

As per the food grade alcohol industry analysis, the pharmaceutical and nutraceutical segment is expected to witness robust growth in the coming years.

Based on the type, ethanol maintains its highest market position due to its use in several industry verticals. Food grade alcohol is used as an ingredient in various products across industries. It is safe for human consumption because of its purity attributing to the lack of additives, and is especially useful in the kitchen, the laboratory, and the workbench.

Industry Outlook

Romania leads global alcohol consumption per capita in 2019, with men consuming over 25 liters and women around 10 liters, according to the World Health Organization’s data. Georgia, Czechia, and Germany follow, with high consumption rates among both men and women.

In North America, the United States has significant consumption, with men consuming around 17 liters and women approximately 7 liters. Russia, Belarus, and Luxembourg in Europe also report high levels of alcohol intake, with men exceeding 20 liters and women around 5 liters.

The United States exhibited a steady increase in beer consumption from 1960, reaching around 5 liters in the 1980s, and then stabilizing with slight fluctuations through 2019. The increasing demand for premium alcoholic beverages and international cuisines in the country contributes to the growth of the food grade alcohol market.

Asian countries such as Japan and China have moderate alcohol consumption levels, with men consuming between 10 to 15 liters and women around 3 liters. India, with lower consumption rates, sees men drinking approximately 6 liters and women about 1 liter.

African countries like Nigeria and South Africa report varying consumption, with South African men consuming about 14 liters and women nearly 4 liters, whereas Nigerian men and women have much lower rates at around 3 liters and 1 liter respectively.

South American countries such as Brazil and Argentina show moderate alcohol consumption, with men consuming around 10 liters and women about 4 liters. Paraguay's consumption rates are similar to Brazil and Argentina.

Belize showed more volatility in its beer consumption, with significant increases and decreases between 1960 and 2010, eventually stabilizing at around 4 liters. India and Iraq maintained very low levels of beer consumption throughout the entire period, each staying below 1 liter of pure alcohol per capita from 1960 to 2019.

In 2016, Italy had the highest share of wine consumption as a percentage of total alcohol consumption, at 64.8%, according to data from the WHO Global Health Observatory via Our World in Data. France followed with 58.8%, reflecting its strong cultural association with wine. Switzerland and Sweden also had significant wine consumption shares, at 48.1% and 47.8%, respectively.

Australia's wine consumption made up 37.5% of its total alcohol intake, indicating a notable preference for wine among its population. Hungary's wine consumption accounted for 32.2% of its total alcohol consumption, highlighting the country's diverse alcoholic beverage preferences.

Brunei reported 0% wine consumption, likely due to strict alcohol regulations and cultural factors.

Global Food Grade Alcohol Market Drivers

• High Demand: Consistent demand from the food, beverage, pharmaceutical, and personal care industries supports the food grade alcohol demand growth.

• Diverse Applications: Versatile uses in various sectors contribute to the  food grade alcohol consumption.

• Technological Advancements: Improved production technologies enhance quality and efficiency, which is expected to increase the food grade alcohol market revenue.

• Strong Distribution Networks: Established supply chains ensure widespread market reach.

• Sustainable Practices: Growing adoption of eco-friendly production methods.

What are the Main Challenges in the Global Food Grade Alcohol Market?

• Price Volatility: Fluctuations in raw material costs impact profitability.

• Regulatory Challenges: Compliance with varying global regulations can be complex and costly.

• High Production Costs: Significant investment needed for advanced technologies and sustainable practices.

• Dependence on Raw Materials: Reliance on agricultural products susceptible to climate change and market dynamics.

Global Food Grade Alcohol Industry Trends

• Rising Health Awareness: Increasing demand for health-conscious and organic products.

• Innovation in Products: Development of new applications and formulations will likely positively influence the aluminium demand forecast.

• Expansion in Emerging Markets: Untapped potential in regions like Asia-Pacific and Latin America.

• Sustainable Initiatives: Growth of eco-friendly and sustainable product lines is expected to support the food grade alcohol market dynamics and trends.

Key Factors that may Hinder the Global Food Grade Alcohol Market Growth

• Economic Uncertainty: Market instability can impact consumer spending and demand.

• Competition: Intense competition from synthetic alternatives and other raw material sources.

• Supply Chain Disruptions: Vulnerability to disruptions in logistics and supply chains.

• Environmental Concerns: Pressure to meet stringent environmental regulations and sustainability standards.

Price Competition in the Industry

• Production costs, raw material availability, market demand, and regional economic conditions.

• Large manufacturers leverage economies of scale.

• Volume discounts for large buyers to secure long-term contracts.

• Optimization of production processes to reduce costs.

• Adjusting prices based on market demand and raw material costs.

Focus on Sustainability Shaping the Food Grade Alcohol Market Dynamics

• Renewable Energy Use

• Advanced water recycling technologies

• Sustainable Sourcing

• Carbon Footprint Reduction

• Zero-Waste Initiatives

• Sustainable Packaging: Manufacturers are increasingly focusing on utilising eco-friendly packaging materials to increase their appeal. 

• Investment in energy-efficient technologies.

• Sustainable Agriculture

• Sustainable Farming Practices

• Environmental certifications by recognized bodies will likely positively impact the food grade alcohol demand forecast.

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Food Grade Alcohol Industry Segmentation

The major types of food grade alcohol are:

• Ethanol

• Sorbitol

• Xylitol

• Others

Based on source, the market is segmented into:

• Sugarcane

• Sugar Beet and Molasses

• Grains

• Others

The market can be broadly categorised on the basis of its application segments into:

• Food

• Beverages

• Pharmaceutical and Nutraceutical

The EMR report looks into the regional markets of food grade alcohol which are as follows:

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East and Africa

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Global Food Grade Alcohol Market Regional Insight

Regionally, Europe has the highest consumption, followed by North America, owing to the popularity of food grade alcohol-based products in the food and beverage sector. Among the numerous processed food producers in these regions, food grade alcohol is in high demand due to the diverse range of flavours and several uses owing to its coating, sweetening, emollient, bulking, anti-crystallising, and stabilising properties.

Germany's per capita beer consumption peaked at around 8 liters of pure alcohol in the early 1990s and has since gradually declined to approximately 6 liters by 2019, according to industry reports.

Competitive Landscape

The report presents a detailed analysis of the following key players in the market, looking into their latest developments like mergers and acquisitions, among others.

• Cargill Incorporated

• Spectrum Chemical Manufacturing Corp.

• Manildra Group

• Wilmar International Limited

• Grain Processing Corporation

• Archer Daniels Midland Company (ADM)

• Greenfield Global Inc.

• MGP Ingredients, Inc.

• Cristalco

• Others

The comprehensive report looks into the macro and micro aspects of the industry. The EMR report gives an in-depth insight into the market by providing a SWOT analysis as well as an analysis of Porter’s Five Forces model.

Key Highlights of the Report

Food Grade Alcohol Market Report Snapshots

Food Grade Alcohol Market Size

Food Grade Alcohol Market Growth

Food Grade Alcohol Market Share

Food Grade Alcohol Companies

Food Grade Alcohol Market Regional Analysis