Alcohol Ingredients Market By Ingredients Type (Enzymes, Yeast, Flavors & Salts, Colorants), By Beverages Type (Spirits, Beer, Wine, Others) - Growth, Future Prospects And Competitive Analysis, 2017 - 2025

Alcohol, which is also known as ethanol or ethyl alcohol, is formed by the fermentation of yeast, sugar, and starches. Other ingredients, such as fruits and grains (barley, wheat, rye, rice, corn, etc.), are also used for the production of alcoholic beverages such as wine, beer, and spirits. Alcohol is also referred to as a medicinal solvent over prescription and over-the-counter drugs. Alcohol is widely used in the pharmaceutical industry in multiple manufacturing processes owing to its bactericidal characteristics. This property of alcohol makes it ideal for topical disinfectant applications.

The global alcohol ingredients market is growing at a rapid pace and is anticipated to attain significant growth over the next seven years. The increase in consumption of alcoholic beverages across the globe is the primary factor driving the market growth of alcoholic ingredients. Furthermore, the growing trade of alcohol worldwide is another factor driving the market growth. However, owing to stringent government regulations on consumption as well as the trade of alcohol and the rise in the cost of raw materials, these are the major factors restraining market growth.

On the basis of ingredient type, the market is segmented into yeast, enzymes, flavors, salt, colorants, and others. Yeast holds a major share of the market as it is the most widely used ingredient in beer production. Yeast is required to initiate the fermentation process. Apart from yeast, starch is also used as a secondary source and as an alternative to the low-cost substitute malted barley.

At present, the European region captures the maximum share by revenue of the alcohol ingredients market and is anticipated to dominate the market over the forecast period. The recent trend in the European Union toward more off-trade alcohol consumption, as it tends to be cheaper, has further contributed to the market's growth. Asia Pacific is projected to be the fastest-growing market over the forecast period. The rise in the global consumption of alcohol in Asia-Pacific drives the market for alcohol ingredients.

Major players are adopting different market strategies to enhance their market position and distribution network. In April 2016, Doehler developed smart solutions for craft and microbreweries. Doehler has a natural integration process by which the company can easily achieve extraordinary beers of the highest quality. In May 2015, Doehler developed a patented Doehler technology that allows the production of gluten-free beers based on barley or wheat.

There is a huge demand for gluten-free beers from people suffering from coeliac disease, as they have the same quality and taste as beer containing gluten. This technology enables Doehler to gain a competitive edge over its competitors through its unique offering of gluten-free beers. In May 2014, CHR Hansen introduced a new Viniflora range of products for the production of red wine. Vinifera range can produce red or rosé wines with varying amounts of sulfites. This development was done to cater to customer demand for healthier, natural, and clean-label products.

The global alcohol ingredients market can be categorized on the basis of ingredient type as follows:

  • Enzymes
  • Yeast
  • Flavor & Salts
  • Colorants
  • Other

Ingredients are used in a wide range of beverage applications, mainly in the production of alcoholic beverages. By ingredients, the market is segmented into enzymes, yeast, flavor and salts, colorants, and others, including spices, palm, and supplements. By ingredient type, yeast is the most widely used ingredient, as it is one of the key ingredients used in the manufacture of beer. Beer is the most widely used drink worldwide. Therefore, as the demand for beer increases, the demand for yeast will also increase simultaneously. Just as beer is made by fermenting starches, wine is also made by fermenting starches. In 2016, yeast accounted for 52.03 percent of the global market by ingredient type and was projected to maintain its dominance over the forecast period of 2017 to 2025.

Colors are the first notable characteristic of a beverage. In the alcoholic segment, vivid, unusual, and bright colors are making an entry targeting the younger generation, which is looking for extreme flavor and excitement. Unusual and strong colors are the most appealing to consumers in the alcoholic beverage segment. Flavors and salts are another segments that are projected to witness substantial growth over the forecast period. The market is projected to grow at a CAGR of 8.2% over the forecast period. Owing to increasing consumer inclination towards flavorful alcoholic beverages, For instance, launched in June 2014, Happy Juice Express is a 24-ounce bottle that has 12% alcohol by volume and a smooth blend of punchy fruit flavors.

The global alcohol ingredients market can be categorized on the basis of beverage type as follows:

  • Spirits
  • Beer
  • Wine
  • Others (RTD, cider, Perry, and premixes)

In alcoholic beverages, beer and wine together accounted for more than 63% of the market and were projected to maintain their hold over the next six years. By beverage type, the beer segment is projected to hold a substantial market share over the next six years. In 2016, it accounted for 44.55% of the global market. Beer is one of the oldest consumed and brewed beverages worldwide. The market for beer is witnessing growth owing to changing lifestyles and a rise in disposable income among consumers. Furthermore, an increase in the number of local breweries is projected to propel market demand. For beer, China is by far the largest market, but due to its extremely competitive nature, it is also highly fragmented. Beer is made by the fermentation of starches—cereal grains, corn, rice, etc. Just as beer is made by fermenting starches, wine is also made by fermenting starches. This process of fermentation gives these beverages their alcohol content.

Other beverages are likely to have a positive impact on the market. Another very popular alcoholic drink, cider, is made by fermenting apples. It is a gluten-free alternative to strong alcoholic drinks such as beer. The cider segment is expected to witness steady growth in comparison to other alcoholic beverages over the next six years. Innovation in product packaging and the health benefits associated with it are some of the major factors propelling the market growth for cider.

The global alcohol ingredients market can be categorized on the basis of regions as follows:

  • North America
  • U.S.
  • Canada
  • Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Rest of Europe
  • Asia Pacific
  • China
  • India
  • Rest of Asia Pacific
  • Latin America
  • Brazil
  • Mexico
  • rest of Latin America
  • Middle East and Africa (MEA)
  • GCC Countries
  • rest of MEA

The growth in the consumption of alcohol all over the world is the key factor driving the demand for its ingredients. Europe dominated the global alcohol ingredients market with a value share of 36.2% in 2016. The growing demand for premium alcoholic beverages from the millennial population in the European region has led to the increased usage of alcohol ingredients by the manufacturers, which is therefore anticipated to drive the market's growth. The demand from the U.K., France, and Germany is boosting the market, but growth is projected to be highest in countries in Eastern Europe.

The rise in global alcohol consumption, especially in emerging regions, is the major factor driving the market growth. In the overall market, Asia Pacific is the most lucrative region and is projected to grow at a CAGR of 8.9% from 2017 to 2025. This is mainly due to increasing urbanization, a rise in per capita income, a growing middle-class population, and changing lifestyles. North America and Europe will witness significant growth over the forecast period. The alcoholic industries in these regions are experiencing tremendous change, with an explosion of new brands meeting the demands of consumers.

Frequently Asked Questions:

The market for Alcohol Ingredients is expected to reach US$ 1,247.8 Mn in 2025.

The Alcohol Ingredients is expected to see significant CAGR growth over the coming years, at 8.4%

The report is forecasted to 2017-2025.

The base year of this report is 2016.

Cargill, Inc.,Archer Daniels Midland Company, Kerry Group PLC, Ashland Inc., CHR Hansen are some of the major players in the global market.

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Published Date:  Nov 2017
Category:  Food & Beverage
Report ID:   58240
Report Format:   PDF
Pages:   120
Rating:    4.2 (65)
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