Grain Alcohol Market Forecasts to 2028 – Global Analysis By Source (Fruits, Grains, Sugarcane, Other Sources), Type (Ethanol, Polyols), Functionality (Coatings, Coloring/Flavoring Agent, Preservative), and By Geography

Grain Alcohol Market Forecasts to 2028 – Global Analysis By Source (Fruits, Grains, Sugarcane, Other Sources), Type (Ethanol, Polyols), Functionality (Coatings, Coloring/Flavoring Agent, Preservative), and By Geography

According to Stratistics MRC, the Global Grain Alcohol Market is accounted for $11.96 billion in 2021 and is expected to reach $16.27 billion by 2028 growing at a CAGR of 4.5% during the forecast period. Grain alcohol is the purified form of ethyl alcohol, which is also known as ethanol, neutral grain spirit, or rectified spirit. Grain alcohol, a neutral spirit, can be built from corn, rye, wheat, grapes, grains, sugarcane, tubers, and beets and is used to make other alcoholic drinks such as wine, vodka, homemade liqueurs and others. The main grain alcohol sources include sugarcane, grains, fruits and other sources. Sugarcane grain alcohol is prepared by fermenting either sugar cane juice or molasses diluted with water including yeast-removing sugar. The different types of grain alcohol are ethanol and polyols which are used in applications such as beverages, food, pharmaceutical and health care and other applications.

Market Dynamics:

Driver:

Increasing demand and consumption of beer globally

Beer consumption has increased exponentially of late. Thus, major market players and local manufacturers are sourcing grain alcohol from barley. Changing lifestyle, rapid urbanization, increase in consumption rate of alcoholic drinks, high disposable income, and rise in popularity of beer among the millennial population are some of the factors driving the global grain alcohol market. Furthermore, introduction of innovative flavors and new ingredients, such as fruity tart and salty flavors, in craft beers is propelling the grain alcohol market. Moreover, rise in popularity of craft beer and locally manufactured beer among youngsters is expected to propel the demand for alcoholic beverages.

Restraint:

Uncertainty in raw material prices

Disruptions in the supply of raw materials and quality of the produce define the price of food grade alcohols. Over the last few years, the prices of ingredients have been fluctuating and this trend is expected to continue over the next few years. The prices of crops such as corn, wheat, and barley for producing ethanol have been fluctuating, resulting in uncertainties in the volume produced. Therefore, increase in the price of raw materials has led to one of major challenges for the food grade alcohols market.

Opportunity:

Rising research and development activities

Rising research and development is a key trend gaining popularity in the grain alcohol market. Companies in the grain alcohol market are focusing on developing new flavors and varieties based on ethnic tastes. For instance, Diageo, a UK based beverages company, announced the launch of a new research and development center in Shanghai to further its product innovation and development aim in China. The first of its kind in the beverage alcohol sector in Shanghai will help the China market and will strengthen Diageo’s ability to quickly create and develop premium products that cater to Chinese consumer tastes. The research center is created with an aim to manufacture a strong portfolio of products developed in China based on local consumer insights and trends.

Threat:

Harmful effects of alcohol consumption

The Ministry of Health across various countries, namely, Australia, Brazil, the US, and India, has taken up initiatives on the harmful effects of alcohol consumption. The alcohol market is highly price sensitive; therefore, even a slight increase in its price by the government or any other regulatory bodies can have a significant impact on the consumption levels. This in turn may affect the grain alcohol market for beverage applications adversely, leading to a fall in demand.

The ethanol segment is expected to be the largest during the forecast period

The ethanol segment is estimated to have a lucrative growth. Ethanol is widely utilizeed in the food industry as a flavoring and coloring agent and in candy glazing. Owing to properties such as solubility, high octane number, and antimicrobial activity, ethanol plays an important role in the food industry. It is used to manufacture flavors & extracts, food dyes, and candy glaze, among others. It finds applications in the bakery & confectionery industry apart from beverages.

The pharmaceutical segment is expected to have the highest CAGR during the forecast period

The pharmaceutical segment is anticipated to witness the fastest CAGR growth during the forecast period. Alcohol is used in the pharmaceutical industry in a variety of manufacturing processes. It is also widely used as a solvent and preservative in pharmaceutical preparations. It has bactericidal activity and is often used as a topical disinfectant, especially in alcohol gels. Moreover, the rise in usage of grain alcohol in the pharmaceutical industry is likely to boost the market during the forecast period.

Region with highest share:

Asia Pacific is projected to hold the largest market share during the forecast period owing to the rapid economic development in the region. This, in turn, is booting the demand for better quality beverage applications, especially in India, China, Malaysia, Indonesia, Singapore, and South Korea. The alcoholic beverages market in this region is currently undergoing significant transformation in response to rapid urbanization. This is expected to boost the consumption of grain alcohol.

Region with highest CAGR:

Europe is projected to have the highest CAGR over the forecast period owing to the presence of a large food & beverage industry in the region. The market in this region is anticipated to be driven by development in the Eastern & Southeastern European countries. Moreover, Europe is one of the largest markets for sugar polyols. As consumers’ demand for low-calorie food is high, the food industry prefers the use of sugar polyols, which are similar to sugar but with low-calorie value. These sugar polyols act as bulking agents, which provide the mass required and sweeten the product without adding any additional calories.

Key players in the market

Some of the key players profiled in the Grain Alcohol Market include ADM, Altria Group, Cargill, ChemCeed, Cristalco, Diageo Plc, Glacial Grain Spirits, Grain Processing Corporation, Manildra Group, Merck Group, MGP Ingredients, Pernod Ricard, Roquette Frères, Wilmar Group, and Wuliangye Yibin Co.

Key Developments:

In April 2021, MGP Ingredients, Inc a US based distributor of premium distilled spirits and specialty wheat proteins and starches, acquired Luxco, Inc. for an undisclosed amount. The acquisition is in line with MGP’s long-term strategy focused on shifting to higher value-added products and diversification of business portfolio.

In February 2021, Grain Processing Corporation opened a large, high-quality, efficient distillery in Muscatine, Iowa for the production of alcohol. This expansion took thousands of engineering hours and leveraged the expertise of GPC’s workforce to increase the amount of value-added ingredients made from the kernel of corn.

Sources Covered:
• Fruits
• Grains
• Sugarcane
• Other Sources

Types Covered:
• Ethanol
• Polyols

Functionalities Covered:
• Coatings
• Coloring/Flavoring Agent
• Preservative
• Other Functionalities

Applications Covered:
• Food
• Beverages
• Pharmaceutical & Healthcare

Regions Covered:
• North America
US
Canada
Mexico
• Europe
Germany
UK
Italy
France
Spain
Rest of Europe
• Asia Pacific
Japan
China
India
Australia
New Zealand
South Korea
Rest of Asia Pacific
• South America
Argentina
Brazil
Chile
Rest of South America
• Middle East & Africa
Saudi Arabia
UAE
Qatar
South Africa
Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025, and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements

Free Customization Offerings:
All the customers of this report will be entitled to receive one of the following free customization options:
• Company Profiling
Comprehensive profiling of additional market players (up to 3)
SWOT Analysis of key players (up to 3)
• Regional Segmentation
Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances