Grain Alcohol Market Overview, Growth Opportunities, Challenges, and Revenue Forecast

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The global grain alcohol market is estimated to be valued at USD 12.2 billion in 2021 and is projected to reach USD 14.9 billion by 2026, recording a CAGR of 4.1% during the forecast period. The global grain alcohol market is witnessing a growth trend due to factors, such as developing economies, increased production of grain alcohol, and growth in consumption of alcoholic beverages. Grain alcohol has various applications in the food, beverage, and pharmaceutical industries.

Grain Alcohol Market

Grain alcohol is used not only in the manufacturing alcoholic beverages but also in food, healthcare, and pharmaceutical products. Hence, as the demand for these consumables increases from end users, manufacturers use grain alcohol to make innovative food products. Food and beverage companies use grain alcohol in a variety of processed foods and healthcare & pharmaceutical products for the advantages it offers. Grain alcohol is primarily used as a key ingredient in manufacturing alcoholic beverages. It is also used in a wide range of food applications as a preservative, colorant/flavorant, and coating agent. With the rapid increase in convenience food consumption, the demand for processed foods is increasing. This consumer-driven demand for processed foods, coupled with increasing consumption of alcoholic beverages, would drive the market for grain alcohol, globally.

Grain Alcohol Market Opportunities: Emerging markets such as Asia Pacific, South America, Middle East and Africa

Due to changing lifestyles, and the rising middle-class population and their disposable incomes, the market for grain alcohol applications has increased substantially in the emerging markets of Asia Pacific, South America, and the Middle East & Africa. These untapped markets have a wide availability of cost-effective labor, advanced technologies, and relatively relaxed regulations on the use of food grade alcohol. Natural sources of grain alcohol such as sugarcane, grains, corn, and other fruits & vegetables are abundantly available in the Asian, African, and Latin American countries. The leading market players have been expanding their facilities in China, India, and Brazil, considering the future potential demand in these markets.

Challenges: Fluctuating prices of raw materials

Fluctuations in the supply of raw materials and quality of the produce define the price of food grade alcohols. Increase in the price of raw materials has led to one of major challenges for the food grade alcohols market. Over the last few years, the prices of ingredients have been fluctuating and this trend is expected to continue over the next few years. The prices of crops such as corn, wheat, and barley for producing ethanol have been fluctuating, resulting in uncertainties in the volume produced.

Top Companies in the Grain Alcohol Market

Key players are investing in various R&D initiatives globally, which has led to the development of different and innovative grain alcohol products. The key players in this market include ADM (US), Cargill (US), Merck Group (Germany), Roquette Frères (France), MGP Ingredients (US), Cristalco (France), Grain Processing Corporation (US), Wilmar Group (Singapore), Manildra Group (Australia), and Glacial Grain Spirits (US).

MGP Ingredients is a leading producer and supplier of premium distilled spirits and specialty wheat proteins & starches. The company operates through two segments: food ingredients and distillery products, of which distillery products is the major segment. Under this segment, the company processes corn and other grains to manufacture grain alcohol and distillery co-products such as distillers feed, fuel grade alcohol, and corn oil.

ADM (Archer Daniels Midland Company) is one of the world’s largest processors and suppliers of starch and derivatives, which are used for applications such as food, feed, paper, pharmaceuticals, bioethanol, and other industrial applications. It has more than 800 manufacturing facilities across the globe and offers products in more than 200 countries, where cereal grains and oilseeds are processed into products that are used in the food, beverage, nutraceutical, industrial, and feed markets. ADM operates in four business units – Ag services and oilseeds, carbohydrate solutions, nutrition, and other businesses. Grain alcohol is offered under the carbohydrate solutions segment.

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