Alcohol Ingredients Market - Growth, Trends, and Forecasts (2023 - 2028)

Alcohol Ingredients Market - Growth, Trends, and Forecasts (2023 - 2028)

The Global Alcohol Ingredients Market is projected to grow at a CAGR of 9.3% in the next five years.

According to Lucas Bols's annual reports, in recent years, alcohol consumption has increased significantly around the globe. Bols, a Dutch public company specializing in producing, distributing, selling, and marketing alcoholic beverages, reported a revenue increase in Western Europe from EUR 34.4 million in 2016 to EUR 42.11 million in 2021. But the company's revenue dropped to EUR 30.75 million as a result of COVID-19. However, post-pandemic, the market has recovered, and ingredient manufacturers are increasing their production to meet the burgeoning demand coming from the alcoholic beverage sector. Moreover, consumers are increasingly inclined toward craft beer, which has resulted in an increasing number of craft breweries around the globe, with the highest number of outlets in United Kingdom, followed by Germany, Italy, and others.

This is yet another factor driving the alcohol ingredients market around the globe. Additionally, manufacturers are increasing their production capacity owing to the rising demand. For instance, in August 2021, Angel Yeast invested heavily in acquisitions and production. Together with Shandong Lufa Holding company, a local investment corporation within the Chinese mainland, the company announced the acquisition of Bio Sunkeen for RMB 60 million (USD 9.2 million). Additionally, manufacturers are innovating various types of ingredients colorants, yeast, flavors & salt, enzymes, and others to enhance the quality of alcoholic beverages.

Alcohol Ingredients Market TrendsIncreasing Demand For Craft Beer

The demand for the craft brewing and distilling industries experienced significant growth during the past few years. Consumers across the world are seeking distinctive and flavored beers. This is pushing the alcohol ingredients market into the beer market space. The brewing industry utilizes five major ingredients, namely malt ingredient extract adjuncts/grains, hops, beer yeast, and beer additives. A mixture of starch sources may be used, with a secondary saccharide, such as maize (corn), rice, or sugar, as these are often termed adjuncts, especially when used as a lower-cost substitute for malted barley. Less widely used starch sources include millet, sorghum, and cassava root in Africa, potato in Brazil, and agave in Mexico, among others. Brewing-grade malt extracts are made with the highest-quality brewing malts and get additional colors and flavors from using specialty malts. This gives beer the unique character and flavor desired for the particular style of brew. These malts often have a longer time in the kiln, at higher temperatures, or get roasted to add depth and complexity to the resulting beer. Moreover, the increasing development of microbreweries and the growing production of craft beer led to a growing demand for craft beers.

Asia-Pacific Remains the Fastest Growing Region

Asia-Pacific, in particular, holds immense potential for the craft beer market, with robust demand for Westernized craft beer that is blended with local tastes and preferences. Shift in consumer preferences from traditional alcohol toward imported alcohol has been one of the driving factors for the growth of the alcoholic beverage market in the region. For instance, according to the Ministry of Agriculture, Forestry, and Fisheries, in 2021, approximately 188 billion Japanese Yen of wine was imported to Japan, making up most of the imports. Despite the fact that fruit wine was produced in various prefectures in Japan, imports covered the majority of domestic demand. In countries like China, consumers are inclined toward wines manufactured by famous vineyard regions, such as Bordeaux, owing to renowned heritage and prestige. Whiskies, Cognacs, and imported wines are becoming popular across the region as consumers are more inclined toward premium products.

Alcohol Ingredients Market Competitive Analysis

The global alcohol ingredient market is highly fragmented due to the dominance of several local and global players present in the market. Nonetheless, the market exhibits a strong presence of global key players, such as DSM, ADM, Cargill, and Döhler Group, alongside other domestic producers. Expansion remained the most adopted strategy among malt ingredient manufacturers, holding a major chunk of total strategies, followed by product innovation, partnership, and merger and acquisition. The major players are expanding their production capacities and strategically planning to supplement their export facilities in order to stand out among other manufacturers in the market.

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