FOOD GRADE ALCOHOL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Food Grade Alcohol Market Size and Trends

The food grade alcohol market is estimated to be valued at USD 2.40 Bn in 2024 and is expected to reach USD 3.21 Bn by 2031, growing at a compound annual growth rate (CAGR) of 4.2% from 2024 to 2031.

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The market is expected to witness positive growth over the forecast period. Rising demand for brewed beverages, such as beer, and increasing application of food grade alcohol in the food & beverages industry as a food additive and preservative are some of the major factors expected to drive the market growth. Furthermore, changing consumer preference towards low-calorie beverages owing to rising health consciousness is also projected to support the demand for food grade alcohol in the coming years. The wide application of food grade alcohol as a solvent for the extraction and purification of pharmaceutical and food products will further provide growth opportunities for players operating in this market.

Growing Demand from End-use Industries

The food grade alcohol market is driven by the growing demand from various end-use industries such as food & beverages, pharmaceuticals, personal care products, etc. Alcohol is widely used in the food and beverage industry due to its various applications such as it acts as a flavoring agent, preservative, solvent for the extraction and distillation of natural food ingredients. It is also used during the production of wine, beer, and spirits. The booming food processing industry globally has significantly contributed to the growth of this market. The demand from the pharmaceutical industry is also driving the market as alcohol finds applications in medications, hand sanitizers, and disinfectants. The recent COVID-19 pandemic has immensely boosted the production and sales of hand sanitizers which use alcohol as the main ingredient. This has positively impacted the food grade alcohol market. The personal care industry also utilizes alcohol in products like fragrances, cosmetics and skin care items. Its penetrating and emollient properties makes it suitable for use in beauty products. Rising health consciousness among people has increased the demand for herbal extracts in dietary supplements and Ayurvedic medicines which uses alcohol as solvent for the extraction of active medicinal compounds from plants. Changing lifestyles and busy schedules have led to the growing preference for packaged and ready-to-eat food items which contain alcohol as preservative. Thus, the expansion of the food processing and personal care industries along with the increased consumption of packaged foods is expected to drive the demand for food grade alcohol in the coming years.

Stringent regulations regarding food safety is one of the primary factors driving the growth of the food grade alcohol market. Governments across the world are implementing stricter guidelines to ensure the quality and safety of food products. Alcohol that does not meet the prescribed standards for food consumption cannot be used in the food industry. This has compelled food companies to rely solely on food grade alcohol that adheres to the regulatory norms. The food grade alcohol manufacturing industry has responded proactively to these regulations. Producers are investing heavily in R&D to come up with innovative purity testing technologies and upgrading production facilities. Advanced distillation and filtration methods allow manufacturers to remove impurities and contaminants from alcohol. They can certify that their products meet all criteria specified by regulatory bodies. This gives confidence to food businesses that opt for these alcohols. It has also increased transparency in a supply chain. The trend of stringent norms is likely to continue in the coming years. For instance, according to a study by the WHO, over 200,000 people require hospitalization every year globally due to contaminated food. Governments are under pressure to strengthen laws to curb foodborne illnesses. The food industry needs to comply with evolving standards. This dependable demand for certified pure alcohol from the food industry will spur growth opportunities for food grade alcohol producers.