The food grade alcohol market was valued at USD 11.97 billion in 2020 and is projected to grow at a CAGR of 3.1 % to reach USD 14.87 billion by 2027. Alcohol, also known as ethanol, is a versatile product with applications ranging from food and pharmaceutical to industrial solvents. The food industry is a key user of alcohol. Alcohol is employed in the manufacturing of vinegar, flavours & extracts, candy glazes, food dyes, yeast, animal-feed supplements, and various food sprays. Commonly, a major difference between productions of fuel-grade ethanol and food-grade ethanol is the addition of a small amount of solvent or gasoline to the fuel-grade ethanol in order to make it undrinkable.
The process of alcohol production does not necessarily employ food-grade equipment. The remaining process for alcohol production is mostly similar. There are three types of food grade alcohol: ‘Industrial-grade’ ethanol, either fermentation or synthetic origin, which has most of the impurities, removed, ‘FCC (food chemical codex)-grade ethanol’, which includes heavy metal specification limits and ‘GNS’ (grain neutral spirits, highly pure-grade ethanol, which is used in beverages).
Growth in the food processing industry, coupled with rising demand for alcoholic beverages, is likely to be one of the key factors driving the market for food grade alcohol. Alcoholic beverages, which were earlier considered a premium offering, are now gradually becoming an essential product that can be found in the majority of households globally. The introduction of new products and rising consumption in emerging economies due to the burgeoning population has helped in the growth of the market.
Growth in volume consumption has benefitted the food grade alcohol industry as it forms an important component of any alcoholic drink worldwide. The changing drinking habits of the millennial population and rising number of craft distilleries have fueled the growth of the alcoholic beverages industry. Moreover, there have been changes in consumer preferences in terms of food and beverage flavors due to new product development by the existing market participants. This is further anticipated to boost the growth of the market in the forthcoming years.
Players such as Archer Daniels Midland Company (US), Cargill Inc. (US), Sigma-Aldrich (US), Roquette Freres S.A. (France), and MGP Ingredients (US) have a strong presence in the Americas as well as in the Asia Pacific region. These companies are constantly strategizing their growth plans to expand their operations in the food grade alcohol market. The Asia Pacific region is experiencing the highest growth rate due to strong industrial development policies adopted by the government. Increased government investments for urbanization and the improved standard of living of consumers have led to an increase in the consumption of food & beverage products. The strategic investors in the industry should see this as an opportunity to introduce innovative alcohol products to cater to the changing demands of manufacturers in this market.
Report : Food Grade Alcohol Market - By Type (Ethanol, Polyols) By Source (Sugarcane, Grains, Fruits, Others) By Application (Food, Healthcare and Pharmaceutical, Beverages) By Region (North America, Europe, Asia Pacific, RoW) - Industry Analysis, Opportunity and Forecast 2020 To 2027