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Grain Alcohol Market Size, Share, Trends, Industry Analysis, Growth Drivers, and Leading Players

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Grain Alcohol Market Size, Share, Trends, Industry Analysis, Growth Drivers, and Leading Players

March 13
17:40 2024
Grain Alcohol Market Size, Share, Trends, Industry Analysis, Growth Drivers, and Leading Players
MarketsandMarkets™
Grain Alcohol Market by Type (Ethanol, Polyols), Application (Food, Beverages, Pharmaceutical & Healthcare), Source (Sugarcane, Grains, Fruits), Functionality (Preservative, Coloring/Flavoring Agent, Coatings), and by Region – Global Forecast to 2026

The global grain alcohol market size is estimated to be valued at USD 12.2 billion in 2021 and is projected to reach USD 14.9 billion by 2026, recording a CAGR of 4.1% during the forecast period. Various factors have played a major role in driving the market growth across the globe. The effects of rapid westernization & urbanization have led to the rising demand for grain alcohol in countries other than Europe and the US. A sharp increase in consumer demand for food products containing grain alcohol and rising demand from the food processing industry is also propelling the market. The market for grain alcohol is largely associated with the sale of beverage products. Increasing sales of a variety of beverage and health & personal care products in mature markets of developed economies in the last five years are responsible for the increased growth of the grain alcohol industry.

Grain Alcohol Market

What is grain alcohol?

Grain alcohol, also known as ethanol, is a type of alcohol that is primarily produced through the fermentation of grains such as corn, wheat, barley, or rye. It is a clear, colorless liquid with a strong odor and taste. Grain alcohol is commonly used as a solvent in various industrial processes, as a fuel additive, and as a base for alcoholic beverages such as vodka, gin, and whiskey. It is also used in the production of medicines, cosmetics, and household products. Due to its high alcohol content, grain alcohol is often diluted before consumption, either for industrial purposes or for making alcoholic beverages.

Grain Alcohol Market Trends

Here are some general trends that may influence the grain alcohol market:

1. Increasing Demand for Ethanol as a Biofuel: Ethanol produced from grains, particularly corn, has been extensively used as a biofuel additive to gasoline. Government mandates for renewable fuel standards, concerns about carbon emissions, and efforts to reduce dependence on fossil fuels have been driving this demand.

2. Shifts in Consumer Preferences: Consumer preferences for alcoholic beverages can influence the demand for grain alcohol. Trends such as the rise of craft spirits, interest in locally sourced ingredients, and demand for organic or sustainable products may impact the market.

3. Regulatory Changes: Regulations regarding ethanol production, distribution, and use can significantly impact the grain alcohol market. Changes in government policies, tax incentives, and environmental regulations can affect both production costs and market demand.

4. Global Economic Factors: Economic conditions, including GDP growth, inflation rates, and currency exchange rates, can influence the affordability and consumption patterns of alcoholic beverages, thereby affecting the grain alcohol market.

5. Technological Advances: Innovations in ethanol production technologies, such as improved fermentation processes, advanced distillation techniques, and the development of novel feedstocks, can impact the efficiency and cost-effectiveness of grain alcohol production.

6. Health and Wellness Trends: Increasing awareness of health and wellness may influence consumer choices regarding alcohol consumption. This could lead to shifts in demand towards lower-alcohol or alcohol-free alternatives, impacting the overall market dynamics.

7. Supply Chain Disruptions: Events such as extreme weather conditions, geopolitical tensions, or disruptions in transportation and logistics can affect the supply of grains used for ethanol production, thereby impacting the grain alcohol market.

Grain Alcohol Market Opportunities: Emerging markets such as Asia Pacific, South America, Middle East and Africa

Due to changing lifestyles, and the rising middle-class population and their disposable incomes, the market for grain alcohol applications have increased substantially in the emerging markets of Asia Pacific, South America, and the Middle East & Africa. These untapped markets have a wide availability of cost-effective labor, advanced technologies, and relatively relaxed regulations on the use of food grade alcohol. Natural sources of grain alcohol such as sugarcane, grains, corn, and other fruits & vegetables are abundantly available in the Asian, African, and Latin American countries. The leading market players have been expanding their facilities in China, India, and Brazil, considering the future potential demand in these markets.

Beverage sub-segment by application is projected to account for the largest market share of the grain alcohol market over the forecast period.

Alcoholic beverages are estimated to account for the largest market share in the global grain alcohol market, as globall populations in developed and developing economies show a rising trend for consumption of alcoholic beverages. The manufacturers are also investing into development of newer customized lproduc ts for attracting consumer interest and sales for their products. These are estimated to account for the strong growth of the segment.

Europe is projected to account for the largest market during the forecast period.

The European grain alcohol market is the largest in the world, and despite very high per capita consumption levels, market growth has remained attractive and stable. The presence of a large food & beverage industry offers the European grain alcohol market a prominent consumer base with opportunistic growth prospects. The market in this region is estimated to be driven by development in the Eastern & Southeastern European countries. Europe is the 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.

Top Companies in Grain Alcohol Market:

The key players in this market include ADM (US), Cargill (US), Merck Group (Germany), Roquette Frères (France), MGP Ingredients (US), Cristalco (France), Grain Processing Corporation (US), Wilmar Group (Singapore), Manildra Group (Australia), Glacial Grain Spirits (US).

MGP Ingredients is a leading producer and supplier of premium distilled spirits and specialty wheat proteins & starches. The company operates through two segments: food ingredients and distillery products, of which distillery products is the major segment of the company. Under this segment, the company processes corn and other grains to manufacture grain alcohol and distillery co-products such as distillers feed, fuel grade alcohol, and corn oil.

ADM (Archer Daniels Midland Company) is one of the world’s largest processors and suppliers of starch and derivatives, which are used for applications such as food, feed, paper, pharmaceuticals, bioethanol, and other industrial applications. It has more than 800 manufacturing facilities across the globe and offers products in more than 200 countries, where cereal grains and oilseeds are processed into products that are used in the food, beverage, nutraceutical, industrial, and feed markets. ADM operates in four business units – Ag services and oilseeds, carbohydrate solutions, nutrition, and other business. Grain alcohol is offered under the carbohydrate solutions segment.

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