Grain Alcohol Market

Grain Alcohol Market Size (2023-2028):

The Global Grain Alcohol Market was worth US$ 12.96 billion in 2022 and is anticipated to reach a valuation of US$ 16.27 billion by 2028 and is predicted to register a CAGR of 4.5% during 2023-2028.

Market Overview:

Ethyl alcohol is also known as ethanol; it is the refined version of ethyl alcohol. Ethnol is also called neutral grain spirit or rectified spirit. Commonly used grains in the grain alcohol market are Corn, rye, wheat, grapes, grains, sugarcane, tubers, and beets. Ever clear, Alcohol-95 and Golden Grain are among the popular brands available in the market. Grain alcohol is made from a fermented blend of corn, sugar, yeast, and water in countries like Mexico and Canada. Instead of corn, other grains, such as wheat and rye, can be used. Fermentation of carbohydrates in grains with yeast is done. After that process of distillation of ethanol takes place several times to make the product, this also refers to pure, high-proof alcohol. It's a clear liquid with no added flavours or odours.

Market Drivers:

The increasing popularity of craft beer and beer production 

In the past ten years, the number of breweries worldwide has increased significantly, which has contributed to the global grain alcohol market growth. People are drinking more beer than ever before. Local and well-known beer producers are using grain alcohol made from barley to keep up with the demand for beer. Young people especially like beer that is made locally or by small independent breweries, and this is driving the need for grain alcohol globally. Other factors that contribute to the growing demand for the grain alcohol market include more people living in cities, changing lifestyles, increased consumption of alcoholic beverages, millennials' preference for beer, and higher incomes. Additionally, the popularity of craft beers with unique flavours like salty or fruity tastes is also catching the attention of young people worldwide.

Market Restraints:

Alcohol Consumption has Negative Effects

Grain alcohol is considered very harmful because it has a high level of alcohol. If you drink too much, it can quickly lead to intoxication, which affects your thinking, coordination, and self-control. Countries like Australia, Brazil, the United States, and India are taking steps to address the negative effects of alcohol consumption on people's health. Since the alcohol market is sensitive and important, even a small increase in prices by the government or other organizations can significantly reduce how much people drink. This is a major reason why the grain alcohol market is not growing as much as it could.

Uncertainty in Raw Material Prices

The cost of food-grade alcohols depends on the availability and quality of the raw materials used to make them. In recent years, the prices of these materials, like corn, wheat, and barley, have been going up and down, and this is likely to continue in the future. When the prices of these crops increase, it becomes difficult to predict how much food-grade alcohol can be produced. So, the main challenge for the food grain alcohol market is dealing with these fluctuations in raw material prices.

Market Opportunities:

Rising Research and Development Activities

In the grain alcohol market, a growing trend is companies investing more in research and development. They want to create new and diverse flavours that appeal to different cultural preferences. For example, a UK-based company called Diageo has opened a research centre in Shanghai, China. This centre is the first of its kind in the beverage alcohol industry in Shanghai. Its purpose is to come up with innovative and high-quality products that specifically suit the tastes of Chinese consumers. The research centre will use insights and trends from Chinese consumers to develop a strong range of products made in China.

GRAIN ALCOHOL MARKET REPORT COVERAGE:

Market Segmentation:

Grain Alcohol Market - By Type:

• Ethanol
• Polyols

The Polyols segment dominated the grain alcohol market with a good market share. This study looked at several sugar alcohols, including sorbitol, maltitol, xylitol, mannitol, and erythritol. Sorbitol is a low-calorie sweetener that occurs naturally in some fruits like apricots and prunes. It is used to add moisture to certain products, act as a sweetener, and can be found in sugar-free candies, gums, and medications. Maltitol is another sugar alcohol that is used as a substitute for regular sugar. It is beneficial because it doesn't cause tooth decay, has fewer calories, and has a smaller impact on blood sugar levels. These sugar alcohols have many uses in the food and beverage industry, and their applications are expected to contribute to the growth of the grain alcohol market.

Grain Alcohol Market - By Application:

• Food
• Beverages
• Pharmaceuticals and Healthcare

The beverages category is the largest in the grain alcohol market and also dominates the market. It includes popular drinks like beer, wine, spirits, and other mixed beverages. Beer, in particular, is very popular worldwide due to factors like increasing incomes, better quality, and effective marketing efforts. Wine, made from fermented grapes or fruits, is also widely consumed. Ethanol is used as a preservative in many liquid medicines, and it serves as a solvent for certain plant-based medications. Liquid formulations are often prescribed for children because they are easy to use, which is driving the demand for grain alcohol in this sector.

Grain Alcohol Market - By Source:

• Grains
•  Fruits
• Sugarcane

The grains segment dominates the grain alcohol market. The grains segment plays a crucial role as a source in the grain alcohol market. It refers to the raw materials derived from various grains used in the production of alcohol. Grains such as corn, wheat, barley, and rye are common sources for making grain alcohol. The process involves fermenting these grains, converting their starches into sugars, and then distilling them to obtain alcohol. The availability and quality of grains directly impact the production and pricing of grain alcohol. As the demand for alcohol continues to rise, the grains segment remains essential for ensuring a steady supply of raw materials to meet consumer needs and sustain the growth of the grain alcohol market.

Market Regional Analysis:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Europe dominates the grain alcohol market. In Europe, the grain alcohol market is the largest in the world, with high consumption levels per person. The presence of a large food and beverage industry provides a significant consumer base and growth opportunities for the European market. The development of Eastern and Southeastern European countries like Bulgaria, Hungary, Poland, and Ukraine is expected to further boost the industry in this region. Additionally, Europe is a major market for sugar polyols, which are low-calorie alternatives to sugar and are in high demand in the food sector. On the other hand, the Asia Pacific region is also experiencing significant growth in the grain alcohol market. The region's rapid economic development is driving the demand for grain alcohol, especially in countries like China, India, Malaysia, Indonesia, Singapore, and South Korea. The increasing urbanization, busy lifestyles, and rising disposable income in this region have led to a rise in per capita alcohol consumption. This has caused a notable shift in the alcoholic beverage market in the Asia Pacific region.

COVID-19 Impact on Grain Alcohol Market:

According to United Breweries, a major player in the beverage industry, the global market has been negatively affected by the second wave of COVID-19, causing uncertainty in the outlook. During this wave, many countries imposed lockdowns to control the virus spread, impacting the production and distribution of grain alcohol market. The start of the financial year saw a hit to the grain alcohol market due to the second and third waves of the pandemic, leading to further uncertainties. While brewing activities faced challenges in various European and other regions due to government regulations affecting transportation, beer production has returned to normal after lockdowns were lifted worldwide. The impact of COVID-19 has been more significant on developed countries, leading multinational companies to focus their efforts on these markets compared to poorer and developing countries.

Market Key Players:

1. ADM (US)
2. Cargill (US)
3. Merck Group (Germany)
4. Roquette Frères (France)
5. MGP Ingredients (US)
6. Cristalco (France)
7. Grain Processing Corporation (US)
8. Wilmar Group (Singapore)
9. Manildra Group (Australia)
10. Glacial Grain Spirits (US)
11. Hardenberg Wilthen AG (Germany)
12. Taishan Liquor (China)
13. Yingjia Group (China)
14. Wuliangye (China)
15. Ethanol SA (South Africa)

Market Key Developments:

• In April 2021, MGP Ingredients, a US-based company known for premium spirits and speciality wheat products, acquired Luxco, another company, but the exact price was not disclosed. MGP's goal is to focus on more valuable products and diversify its business portfolio, which is why it made this acquisition.
• In February 2021, Grain Processing Corporation (GPC) opened a new and efficient distillery in Muscatine, Iowa. This distillery allows GPC to produce more alcohol and valuable ingredients from corn kernels. The expansion required a lot of effort from engineers and GPC's skilled workforce.