Food-grade Alcohol Market - Global Industry Analysis and Future Growth Opportunities By 2025

Alcohol, also known as ethanol, is a versatile product with applications ranging from food and pharmaceutical to industrial solvents. The food industry is a key user of alcohol. Alcohol is employed in the manufacturing of vinegar, flavours & extracts, candy glazes, food dyes, yeast, animal-feed supplements, and various food sprays. Commonly, a major difference between productions of fuel-grade ethanol and food-grade ethanol is the addition of a small amount of solvent or gasoline to the fuel-grade ethanol in order to make it undrinkable. The process of alcohol production does not necessarily employ food-grade equipment. The remaining process for alcohol production is mostly similar. There are three types of food grade alcohol: ‘Industrial-grade’ ethanol, either fermentation or synthetic origin, which has most of the impurities removed, ‘FCC (food chemical codex)-grade ethanol’, which includes heavy metal specification limits and ‘GNS’ (grain neutral spirits, highly pure-grade ethanol, which is used in beverages).

Food-grade Alcohol Market: Drivers and Restraints

Rising population and rapid urbanization facilitated the need for quality food products. Moreover, food grade alcohol is utilized for food preservation. These factors are estimated to drive the food grade alcohol market during the forecast period. However, stringent government regulations regarding the quality of food grade alcohol are anticipated to restrain the market to some extent in the near future. Alcohol-flavored food products are likely to provide lucrative opportunities for food grade alcohol in the near future.

Food-grade Alcohol Market: Segmentation

In terms of source, the food grade alcohol market can be segmented into:

Grain-based
Molasses-based
Others (synthetic, etc.)

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Food grade alcohol is often molasses-based with a minimum of 94% to 99.99% volume/volume ratio. Food grade ethanol is commonly manufactured by using traditional methods, which include milling, fermentation, and distillation. In dry milling process, grains such as corn are crushed, mixed with enzymes and water, and heated. The liquid starch mash is further enzymatically treated in order to produce sugar. The produced sugars are fermented with the usage of yeast to yield carbon dioxide and ethanol. After the complete fermentation of the mash, it is distilled and further concentrated to produce ethanol. However, in wet milling, a similar process is employed, excluding the step where the grain is first immersed in dilute acid and water to enable separation of the grain into its components. Ethanol is required as a separating agent, cleaning agent, and also as a direct raw material in numerous food applications. Food grade alcohol serves as a natural preservative, not only in the production of food products but also in food packaging due to its unique characteristics.

Food-grade Alcohol Market: Region-wise outlook

In the U.S., nearly 92% of alcohol consumed in a year is utilized for fuel applications, approximately 4% is consumed by food and beverage applications, with the remaining 4% as industrial chemicals and solvents. Asia Pacific held a majority share of the global food grade alcohol market in 2016 due to increasing demand from the food & beverage industry in the region. China and India are anticipated to considerably contribute to the development of the Asia Pacific food grade alcohol market. The food-grade alcohol markets in Europe, Latin America, and Middle East & Africa are estimated to expand at a sluggish rate during the forecast period.

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Food-grade Alcohol Market: Key Players

Key players operating in the global food grade alcohol market include:

Archer Daniels Midland
Wilmar International
MGP Ingredients
Cargill
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