Food Grade Alcohol Market is Anticipated to Witness High Growth Owing to Rising Demand for Food Preservatives
Food Grade Alcohol Market is Anticipated to Witness High Growth Owing to Rising Demand for Food Preservatives
Food grade alcohol finds wide applications as a food preservative in bakery, dairy, sweets and other confectionery products.

Food Grade Alcohol Market is Anticipated to Witness High Growth Owing to Rising Demand for Food Preservatives

The increasing use of packaged, preserved and ready-to-eat food items has propelled the demand for food grade alcohol over the years. Food grade alcohol acts as an effective antimicrobial agent, inhibiting the growth of bacteria, yeast and molds in various food products. It helps extend the shelf life of baked goods, desserts and other products. The effecitve preservation abilities along with versatility across various food verticals has made food grade alcohol indispensable in the food industry.

 The Global Food Grade Alcohol Market is estimated to be valued at US$ 2.56 Bn in 2024 and is expected to exhibit a CAGR of 5.5% over the forecast period from 2024 to 2031.

Key Takeaways

Key players operating in the food grade alcohol are MGP, Cargill Incorporated, ADM, Cristalco, Grain Processing Corporation, Wilmar International Ltd., Extractohol, Pure Alcohol Solutions, Nedstar, Sasma B.V., Roquette Frères , Essentica, AVANSCHEM, Fairly Traded Organics, and Ethimex Ltd. These players are focusing on capacity expansion plans to meet the rising demand from food industry.

Food grade alcohol offers several opportunities for use in novel food applications and product development. With widespread acceptance of packaged foods, the scope of using alcohol as a preservative has increased. Food and beverage producers are exploring innovative ways to utilize alcohol for development of new foods such as flavored alcohols and alcohol-infused edibles.

The global Food Grade Alcohol Market Size is projected to witness substantial growth in developing regions on account of rising disposable income, growing health awareness and changing lifestyles. The major international players are expanding their presence across Asia Pacific and Latin American countries to tap the untapped market potentials. Partnerships with local food manufacturers will help strengthen their global presence.

Market Drivers

Growing Demand for Processed and Packaged Foods: The robust demand for packaged, processed and ready-to-eat food items acts as a major driver for food grade alcohol market. Food processing industry extensively uses alcohol as an effective preservative to extent product life.

Stringent Food Safety Regulations: Stringency in food safety regulations regarding food preservation is prompting food producers to adopt advanced food grade alcohol-based preservation techniques to ensure microbiological safety of products during shelf life. This regulatory factor is boosting the market growth.

Market Restraints

Availability of Alternative Preservatives: Alternatives available in the form of chemical preservatives, natural extracts and additional processing technologies pose challenge for food grade alcohol market. Producers may switch to alternatives depending on regional regulations.

Negative Health Perception: Although consuming food grade alcohol does not impart direct health risks but some negative perception continues to surround its use in food items. This restrains complete acceptability and market expansion potential across regions.
Segment Analysis
Food Grade Alcohol Market can be segmented by its Type which include Grains, Fruits, and Sugarcane & Molasses.Grains segment is currently dominating the market as it accounts for over 45% of market share. Corn is widely available raw material and low cost of production aid grains to capture large portion of the market.

Within grains segment, corn based food grade alcohol captures majority of market share attributable to its wider availability and year-long cultivation of corn. Corn is easily grown than any other grains and provides high yield per acre. Other than corn, wheat and barley are also used grains for production but corn based alcohol has established strong presence over the years.

Fruits segment is projected to witness fastest growth during forecast years. Increase in health awareness and preference for natural ingredients are factors contributing to fruits segment growth. Availability of various fruits across regions and easy extraction process support fruits based alcohol production. Citrus fruits lead fruits segment owing to wide cultivation and suitability for alcohol extraction.

Global Analysis
North America dominates global food grade alcohol market with over 35% share majorly due to large scale corn farming and presence of leading market players. However, Asia Pacific is identified as fastest growing region on back of rising beverage and pharma industries in developing countries. China, India and other Southeast Asian countries are witnessing boosted demand for both domestic consumption and exports. Expansion of alcohol manufacturing facilities by global players in Asia Pacific strengthen regional market dominance. Latin America and Europe also offer lucrative opportunities for the market players owing to shift towards premium and craft beverages.

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