Food-grade alcohol is a psychoactive drug, which is most widely used as a recreational drug in food & beverages, pharmaceutical products, and industrial solvents. Food-grade alcohol includes ethanol and polyols. Ethanol is fermented from many sources, such as starch, including corn, wheat, grain sorghum, barley, and potatoes. In addition, it is fermented from sugar crops, such as sugarcane and sweet sorghum. Polyols, on the other hand, are alcohols containing multiple hydroxyl groups. Classes of polyols and sugar alcohols are commonly added to foods due to their lower caloric content as compared to sugar; although they are less sweet and are often combined with high-intensity sweeteners.
Developed regions, such as North America and Europe, witness an increase in bulk trade for alcohol. The leading importers and exporters mostly include developed countries. The three main global alcohol industries, such as beer, spirits, and wine, are projected to drive the growth of the food grade alcohol market.
The global market for food grade alcohol is projected to reach USD 12.9 billion by 2022, recording a CAGR of 3.9%.
Food-grade alcohol is used as a preservative, coloring & flavoring agent, solubility, antifreeze property, flammability, and volatility in the food, health care & pharmaceuticals, and beverage industries. The demand for food-grade alcohol is rising from the ready-to-eat and ready-to-cook food application segments, offering growth opportunity in the food industry. Its preservative property is widely applicable in the pharmaceutical and health care industries, thus leading to a high demand. The fermentation of fruits, grains, and cereals, among others, results in the formation of ethanol, which is used in manufacturing alcoholic beverages, such as beer, wine, and spirits. The concentration of the beverages is measured on the basis of ethanol content and using as an alcohol by volume (ABV) unit. Sorbitol is used in manufacturing wine and other flavored alcoholic beverages. These factors significantly contribute to the food grade alcohol market growth during the forecast period.
Increasing beer production and rising popularity of craft beer has contributed to the growth of the beverage segment in the food grade alcohol market
Beer is a widely consumed alcohol beverage and the production of beer has increased significantly during the last decade. The increase in global demand for beer production is driving the breweries to source food-grade alcohol from barley. The usage of alcohol manufactured from barely in the beer industry is projected to account for a major share in the market. The usage of ethanol is projected to increase at a high rate, due to the increasing usage of ethanol from barley in the beer production; this is encouraging the breweries manufacturers to use ethanol.
The growing popularity of craft beer and local beer is projected to further increase the demand for domestic malt over the next five years. Food-grade alcohol products are customized according to the requirements of the end-use industry and is projected to drive the market in the near future. Thus, due to these factors, the beverage segment is projected to dominate the food grade alcohol market.
The market in the North America region is projected to dominate the food grade alcohol market. The rise in consumption and the demand for alcohol has resulted in the increased use of food-grade alcohol for beverage applications. Moreover, there is no specific federal law that forbids the consumption of alcohol in public. The minimum age limit to 18 years is established as the legal drinking and purchase age for alcoholic beverages. In addition, laws related to the production, use, influence, and sales of alcoholic beverages are strictly followed in various countries in North America to reduce health complications and deaths. Due to these factors, the market is projected to grow at a moderate rate in the North American food ingredients industry.
The global food-grade alcohol market is highly competitive and comprises many prominent players, accounting for a major market share. This market is dominated by companies, such as Cargill Inc. (US), Grain Processing Corporation (US), MGP Ingredients (US), Archer Daniels Midland Company (US), Wilmar Bioethanol (Singapore), and Roquette Freres S.A. (France). Other players include Fonterra Co-operative Group (New Zealand) and Cristalco SAS (France). These leading players also have a strong product portfolio for food-grade alcohols used in a wide range of applications, such as the food, beverage, and healthcare & pharmaceuticals industries. Most of the key participants are exploring new geographies through expansions and acquisitions across the globe to avail competitive advantage through combined synergies. These factors are further projected to drive the market growth during the forecast period.
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