Food-grade Alcohol Market

Food-grade Alcohol Market Outlook (2023 to 2033)

The global food-grade alcohol market is valued at US$ 13.8 billion in 2023 and is expected to reach US$ 20.8 billion by the end of 2033, expanding at a CAGR of 4.1% during the forecast period (2023 to 2033).

Demand for food grade alcohol is estimated to grow with its increasing application in products related to healthcare and pharmaceuticals, personal care, and food & beverages. In addition, increasing consumption of various types of beverages along with the growing trade of alcohol across the world is also expected to propel the demand for food-grade alcohol. Alcohol is also used as an ingredient for manufacturing extracts, vinegar, flavors, and yeast.

Food-grade alcohol is safe for human consumption and is therefore used in kitchens, workbenches, and laboratories. Many names are used for food-grade alcohol, such as anhydrous ethanol, grain alcohol, and non-denatured alcohol.

In recent years, there has been a substantial increase in the requirement for ethanol in the food industry to increase the shelf life of different products. This change is attributed to the adoption of a wide variety of ready-to-eat food products and changing food habits of several consumers globally.

Moreover, food-grade alcohol plays a pivotal part in the healthcare industry due to its utilization in the sterilization of medical equipment. It is also used in the preparation of numerous medicines in the pharmaceutical industry. Sugar and ethylene are basic materials, which are used in the synthesis of various food-grade alcohols. In addition, polyols are replacements for sugar, which are widely used in the preparation of food items.

Demand for food-grade alcohol is projected to increase owing to the high demand for beer and spirits around the world. The rising disposable income of people around the world is increasing the demand for specialized food and beverage products.

This has compelled manufacturers to introduce some innovative formulations involving food-grade alcohol in the industry. Substantial growth of the food processing industry along with growing consumption of ethanol is expected to stimulate the demand for food-grade alcohol over the forecast period.

This recently published research report by Fact.MR, a provider of market research and competitive intelligence, provides an evaluation and a comparison of the industry growth rates and possibilities for future market developments.

Report Attributes	Details
Food-grade Alcohol Market Size in 2023	US$ 13.8 Billion
Forecasted Market Value (2033)	US$ 20.8 Billion
Estimated Market Growth Rate (2023 to 2033)	4.1% CAGR
Canada Market Growth Rate (2023 to 2033)	3.3% CAGR
Germany Market Growth Rate (2023 to 2033)	3% CAGR
Key Companies Profiled	Archer Daniels Midland Company Cargill, Inc. Fonterra Co-operative Group Ltd. Grain Processing Corporation Manildra Group Wilmar International Ltd. MilliporeSigma MGP Ingredients, Inc.

Which Factors are Driving the Sales of Food-grade Alcohol Globally?

“Ever-Increasing Consumption of Alcoholic Beverages”

Food-grade alcohol products are gaining popularity in the food and beverage industry around the world. A diverse range of flavors of food-grade alcohol is available and their demand is estimated to increase over the coming years. Additionally, stabilizing, anti-crystallizing, bulking, emollient, sweetening, and coating properties of food-grade alcohol are contributing to its increasing application in the food and beverage industry.

Food-grade alcohol is used in the production of alcoholic beverages including whiskey, wine, beer, and other liquors. Consumption of alcoholic beverages, as a noteworthy part of greet events and social meet, has stimulated demand for food-grade alcohol. Further, the growing consumption of different beverages around the world is predicted to fuel demand for food-grade alcohol.

“Changing Food Habits and Increasing Urbanization”

Expanding urbanization is leading to remarkable growth in the processed food industry. Manufacturers from the food industry use alcohol in certain food products as a preservative, additive, and flavor enhancer. Numerous alcohol-based ingredients such as polyols are used extensively in the nutraceutical and pharmaceutical industry in the form of sanitization products, functional food and beverages, and dietary supplements.

Surging demands for food ingredients, including food-grade alcohol is predicted to generate lucrative opportunities for industry players.

What are the Barriers to the Supply of Food-grade Alcohol?

“Stringent Regulations and Fluctuation in Prices of Raw Materials”

Certain stringent regulations are imposed by respective governing bodies on vital aspects of food-grade alcohol, which are directly impacting the growth of the food-grade alcohol market. In addition, the fluctuating prices of raw materials, which are used in the manufacturing of food-grade alcohol, have a negative impact on the cost of the final product.

However, new product developments and the shift of some important products from the luxury segment to the essential segment are projected to generate novel opportunities for manufacturers over the coming years.

Which Region Should Manufacturers of Food-grade Alcohol Target?

“Increasing Demand for Several Varieties of Alcoholic Beverages in Europe”

Among other regional markets, Europe is estimated to hold more than 35% of the total revenue share by the end of 2033. There is a rising demand for food-grade alcohol owing to the growing consumption of beverages and increasing spending capacities of several consumers in the European region. There is an increasing demand for multiple varieties of alcoholic beverages in the region.

Easy availability of alcohol, affordability, economic development, and cultural changes are some other noteworthy factors, which are contributing to the increasing consumption of alcohol and fueling the market growth.

Country-wise Insights

What are the Future Prospects of Food-grade Alcohol in Japan?

“Easy Accessibility to Raw Materials Contributing to Increased Production of Food-grade Alcohol”

Demand for food-grade alcohol in Japan is estimated to progress at a CAGR of 2.5% from 2023 to 2033. The rising population and increasing per capita income along with easy accessibility of raw materials are expected to result in the growing consumption of food-grade alcohol.

All these factors are projected to show market growth over the forecasted period.

Which Factors are Attracting Food-grade Alcohol Manufacturers to the United States?

“Increasing Inclination towards Eatables Produced with Food-grade Alcohol”

Sales of food-grade alcohol in the United States were more than US$ 3.4 billion in 2022. The increasing consumption of food products that are manufactured using food-grade alcohol. Food-grade alcohol products are gaining traction in the food and beverage market due to their properties to produce various culinary flavors.

Demand for food-grade alcohol in Canada is expected to increase at a CAGR of 3.3% during the forecast period.

Why is Demand for Food-grade Alcohol Increasing in Germany?

“Well-established Food & Beverage Industry Fueling Demand for Food-grade Alcohol”

Sales of food-grade alcohol in Germany are expected to progress at a CAGR of 3% from 2023 to 2033. Food-grade alcohol is being rapidly consumed in different end-use industries, including cosmetics & personal care, pharmaceuticals, and food & beverages.

In addition, the well-established food & beverage industry along with the growing utilization of food-grade alcohol to prepare different food flavors and vinegar is anticipated to increase sales of alcohol over the coming years.

Category-wise Insights

Which Type of Food-grade Alcohol is Most Widely Consumed?

“Ethanol-based Food-grade Alcohol Generating Market Lucrative Opportunities”

Based on product, the global food-grade alcohol market is segmented into ethanol, sorbitol, xylitol, and others. Among these, the ethanol segment is predicted to hold a substantial share of the revenue. Ethanol, also called grain alcohol, is derived from fruits, sugars, and starch sources such as potatoes, wheat, corn, sweet sorghum, sugar cane, etc.

Owing to its easy availability, corn starch is utilized on a larger scale to source ethanol. Wet and dry milling processes are used in the production of ethanol.

Which Source is Widely Used to Manufacture Food-grade Alcohol?

“Wide Use of Sugarcane & Molasses for Manufacturing Food-grade Alcohol”

Sugarcane & molasses, fruits, grains, and other sources are used to produce food-grade alcohol around the world. Among these, sugarcane & molasses are estimated to hold a substantial share of around 30% of total market revenue by the end of 2033. In recent years, the demand for sugarcane-based food-grade alcohol is surging around the world.

Thailand, China, Brazil, and India are the major countries sourcing alcohol from sugarcane and molasses.

Which End Use of Food-grade Alcohol is Highly Rewarding for Market Players?

“High Use of Food-grade Alcohol in Food & Beverage Products”

Industries such as food & beverage, personal care, pharmaceutical, nutraceutical, etc., are the key end users of food-grade alcohol. Food & beverage products are anticipated to hold more than 20% of the total revenue share by the end of 2033. Many people around the world have been consuming a wide variety of beverages.

Increasing youth population in different regions is fueling the demand for alcoholic drinks. In addition, the growing demand for unique beverages and exotic flavors is leading to the development of microbreweries, which provide innovative craft beers to end users. Rising indulgence in different social activities and improved standards of living are also boosting the demand for food-grade alcohol.

Key Market Players

Major providers of food-grade alcohol, across the globe, are spending a handsome amount on developing and strengthening their supply chain management system. They are strategizing on enhancing the quality of products and enabling faster delivery to consumers. While ensuring product quality, they adhere to set guidelines for quality control and environmental impact.

Prominent manufacturers of food-grade alcohol are Archer Daniels Midland Company, Cargill, Inc., Fonterra Co-operative Group Ltd., Grain Processing Corporation, Manildra Group, Wilmar International Ltd., MilliporeSigma, and MGP Ingredients, Inc.

Segmentation of Food-grade Alcohol Industry Research

• By Product :

  • Ethanol
  • Sorbitol
  • Xylitol
  • Others

• By Source :

  • Sugarcanes & Molasses
  • Fruits
  • Grains
  • Others

• By Application :

  • Food & Beverages
  • Personal Care
  • Pharmaceuticals
  • Nutraceuticals
  • Others

• By Region :

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa