Food Grade Alcohol Market is Trending Due To Increasing Demand for Sanitizers

Food Grade Alcohol Market is Trending Due To Increasing Demand for Sanitizers

Food grade alcohols are widely used as flavoring extracts, food preservatives, and antioxidants in products like bakery goods, confectioneries, vinegars, sauces, and more. They help extend the shelf life of packaged foods while maintaining taste and quality. Food grade alcohol also serves as a cleaning agent and hand sanitizer in the food processing and Food grade alcohols.

The Global Food Grade Alcohol Market is estimated to be valued at US$ 2.40 Bn in 2024 and is expected to exhibit a CAGR of 4.2% over the forecast period 2024 to 2031.
Key Takeaways
Key players: Key players in the food grade alcohol market include MGP, Cargill Incorporated and ADM who together account for over 30% of the global market share.

Growing demand: The growth of the food & beverage industry along with increasing use of alcohols as surface disinfectants and hand sanitizers during the pandemic has augmented the demand for food grade alcohol.

Global expansion: Leading alcohol producers are investing in capacity expansion plans and adopting new technologies to cater to the rising global demand. MGP recently expanded its production facility in Indiana, USA to boost annual ethanol capacity.

Market Key Trends
One of the key trends in the Food Grade Alcohol Market Size is increasing popularity of organic and natural food grade alcohols. Consumers are showing preference for clean label products with no artificial additives and preservatives. To tap into this opportunity, manufacturers are offering organic and natural alcohol extracts made from sugarcane, corn or fruits for use as flavors, preservatives and extracts in various food applications. This trend is expected to continue and drive the demand for organic food grade alcohols.
Porter's Analysis
Threat of new entrants: New competitors find it difficult to enter this market as it requires significant investment in production facilities and distribution networks. In addition, the established players enjoy economies of scale.

Bargaining power of buyers: Buyers have moderate bargaining power in this market as there are many suppliers producing food grade alcohol. However, buyers tend to have long-term contracts with a few key suppliers to ensure steady supply.

Bargaining power of suppliers: Suppliers of raw materials such as grains and molasses have some bargaining power over buyers as increasing demand is driving up raw material prices. Buyers depend on a consistent supply of quality raw materials.

Threat of new substitutes: There is a low threat of substitution as food grade alcohol has certain properties that make it suitable for specific applications in food & beverages and pharmaceuticals industries. Potential substitutes are limited.

Competitive rivalry: The market is competitive with industry leaders battling for more market share. Players differentiate based on product quality, reliability of supply, and customer service.

Geographical Regions
North America accounts for the largest share of the global food grade alcohol market, both in terms of value and volume. This is attributed to the region's developed food & beverages industry and the high alcohol consumption levels. The U.S. is the major revenue generator within North America.

Asia Pacific region is poised to record the fastest growth during the forecast period. Rapid urbanization, changing lifestyles, rising disposable incomes are fueling the growth of food & beverages industry in emerging nations such as China and India. This will drive the demand for food grade alcohols in the coming years.

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