The food grade alcohol market consists of various types of alcohols such as ethanol, isopropanol, and methanol that meet food chemical standards. Ethanol is the major and widely used type of food grade alcohol which is primarily produced from grains such as corn, wheat, barley, or sugars extracted from sugarcane or sugar beets. Food grade alcohol finds extensive applications in beverages such as beer, wine, spirits as well as flavorings, extracts, and food preservatives. Growing health awareness has augmented the demand for low-calorie, low-sugar beverages that utilize alcohol for taste. This, in turn, has boosted the market.

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. Key players focus on strengthening their market presence through strategic acquisitions and new product launches. For instance, in 2021, ADM acquired Tianjin Angel Yeast to expand its yeast portfolio and offerings.

The growing demand for alcoholic beverages from the millennial population and increasing preference for high-quality craft beverages are fueling the food grade alcohol market. Moreover, the rising demand for low-calorie beverages made with alcohol is also propelling the market growth.

Globally, North America dominates the Food Grade Alcohol Market Size due to increasing consumption of spirits and craft beers. However, Asia Pacific is expected to witness the fastest growth owing to rising disposable incomes, increasing preference for Western drinking culture, and growing urbanization. Furthermore, increasing focus of key players on tapping opportunities in emerging economies is also expected to drive the market in the region.

Market Drivers

The increasing usage of alcohol in beverages is the major driver augmenting the food grade alcohol market growth. Food grade alcohol acts as a perfect solution for manufacturers seeking to develop low-calorie, low-sugar alcoholic beverages with natural flavors. It allows producing light beers with fewer carbs and low-calorie wines and spirits made without compromising the taste. Thus, the rising demand for healthier alcohol options is propelling the market.

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