Alcohol Ingredients Market Size, Share, Opportunities, COVID 19 Impact, And Trends By Ingredient (Yeast, Enzymes, Colors, Flavors & Salts, Others), By Beverage Type (Beer, Wine, Spirits), And By Geography - Forecasts From 2022 To 2027

The global alcohol ingredients market is expected to grow at a CAGR of 8.23% over the forecast period to reach a total market size of US$18.075 billion by 2027, increasing from US$13.668 billion in 2020. Several ingredients are used as components in alcoholic beverages, ranging from ethanol to other sugary ingredients. Alcohol is widely consumed globally and is classed as a ‘sedative hypnotic’ drug that acts as an agent to depress the central nervous system at high doses. Growing alcohol consumption in various parts of the world is expected to drive the growth of the market during the forecast period. In addition, rising disposable income in developing countries is widening the growth opportunities for alcohol makers, which will positively impact the demand for ingredients in the coming years. Growing awareness among consumers about the wide range of flavours of alcohol along with the increasing demand for low alcohol (in percent by volume) content beverages is anticipated to drive the demand. However, stringent government regulations on alcohol products worldwide are expected to act as a restraining factor for the growth of the market.

Growing alcohol consumption globally is driving the growth of the market during the forecast period.

There is an exceptionally broad range of alcohol available around the world, and alcoholic beverages are present in all societies today. There is an increasing trend of alcohol consumption in developing countries like Vietnam, India, and China on account of the growth in the financial status of the major population in these countries.  due to increasing population sizes and growing per capita alcohol consumption, the overall volume also increases, which propels the market growth opportunities for manufacturers and vendors in various parts of the world.

Understanding the Beer industry

Beer is generally made with ingredients such as wheat and barley and has been malted and brewed for a certain time with sugar. Beer is considered one of the most consumed alcoholic beverages in the United States and, as per data by, the  National Beer Wholesalers Association (US) the country’s beer industry sells more than $111.1 billion worth of beer and malt-based beverages. Furthermore, the domestic population consumes 83 percent of all beer produced locally each year, with the remaining 17 percent imported from more than 100 different countries around the world. The growth of beer consumption has been uneven as there is a shift in consumption patterns in recent years. The Asia Pacific region is now surpassing the European region to become the leading consuming region globally as consumption in traditional beer-drinking nations (in Europe) is shrinking. Besides,  consumers in the traditional beer-drinking countries are getting richer, which is becoming a reason for the shift in preference towards expensive and imported beverages such as wine. Globalization has also reduced the cost of imported expensive beverages, which has increased the demand for a variety of other alcoholic beverages. Furthermore, the growing number of craft beer enthusiasts coupled with the increasing investment in breweries in developing countries is expected to have a positive impact on the market.

Understanding Wine industry

Grapes are considered one of the most common ingredients for wine, but other fruits or vegetables such as pears, pineapples, blackberries, and gooseberries, among others, are also used. Wine aids in the treatment of inflammation, the prevention of heart disease, and the promotion of healthy gut bacteria, resulting in increased global demand for wine . . The global wine market's growth is driven by its increased consumption for its health benefits and innovation in flavour. Also, the consumption and popularity of wine are rising, particularly among the female population, which is also opening growth opportunities for manufacturers and vendors. Besides, changing lifestyles, tastes, and preferences among consumers, coupled with the increasing demand for new and exotic flavours, made of tropical fruits, are expected to fuel the growth of wine consumption, which will further create ample opportunities in various parts of the world.

Regional Analysis

By geography, the global alcohol ingredient market is segmented into North America, South America, Europe, the Middle East,  Africa, and the Asia Pacific. The North American region is expected to hold a significant share in the market owing to the presence of major players coupled with the ever-growing alcohol consumption in countries like the United States and Canada. In addition, growing awareness regarding the health benefits of wine is further anticipated to boost the growth of the market in the region. The European region is home to the wine and spirits consuming population, and the market is expected to grow significantly in the coming years due to increased product launches.  In addition, countries like Portugal and Spain are among the leading producers of premium and high-quality wines. Also, crafted spirits are gaining popularity in various parts of the region, and demand is driven mostly by the young population. Due to consumer demand for new flavours, innovations and diversification of product offerings have contributed to increased investment in innovations and diversification of product offerings, which is opening up growth opportunities for more alcohol ingredient companies. The Asia Pacific region is estimated to show promising growth over the forecast period, which is attributable to the fact that wine production is growing considerably in the region.

Perceiving the supply chain of the market

The industry's downstream supply chain network is comprised of distribution channels for different ingredients.  The substantial influence of the existing distribution channels on strategic decisions such as new product development and pricing is there. Regulatory authorities do play an important role between the manufacturers and distilleries. A few little marketing and promotional strategies are adopted by the companies to strengthen their downstream relationships with distribution channels. Besides, efforts need to be made to improve the overall complicating factors, i.e., the testability and time.

Competitive Insights

The number of players in the alcohol ingredients market is restricted and is growing with the opportunity to generate significant revenues because of growing demand in various parts of the world. The players in the global alcohol ingredients market are implementing various growth strategies to gain a competitive advantage over their competitors in this market. Major market players in the market have been covered along with their relative competitive positions and strategies. The report also mentions recent deals and investments of different market players over the last few years. The company profiles section details the business overview, financial performance (public companies) for the past few years, key products and services being offered, along with the recent deals and investments of these important players in the global alcohol ingredients market.

Recent Developments

• August 2020: Beer-producing giants SAB and Heineken halted their investment and expansion plans of nearly R200-billion in South Africa.
• May 2020: South African Breweries (SAB) canceled R5-billion ($290 million) of planned investments due to revenue losses sustained during a nearly three-month ban on alcohol sales during the coronavirus crisis.
• Flying Fish released a strong seltzer throughout South Africa in April 2021, hoping to be the first in the country. This drink is made with premium components such as water, alcohol, fine bubbles, as well as a dash of fruit juice to provide exceptional refreshment for any occasion.
• Innova Fit, Novozymes A/latest S's yeast technology, was launched in North America in February 2020. The offering is a non-GMO yeast that overcomes the other types' alcohol production restrictions. The company's new product line expands its product portfolio and creates more opportunities for effective alcohol production.
• February 2020: The World’s largest craft brewer, BrewDog, is entering the Indian subcontinent with plans to open 35 pubs and launch nearly a dozen bottled beer brands over the next four years.

COVID-19 Impact on Alcohol Ingredients Market

Due to the COVID-19 pandemic, major alcohol manufacturers halted their expansion plans and investments, which is expected to restrict the growth of the alcohol ingredients market in the short term. Also, implemented duty hikes increase the prices, which have also impacted the demand for alcoholic beverages. After the pandemic, consumers are becoming more aware of health and wellness due to which health-conscious drinkers are adopting a policy of modernization, which is a cut in the volume of consumption or reducing drinking occasions that further restrains the growth opportunities for alcohol ingredient players. In addition, the bars, clubs, and restaurants that get their significant sales from serving alcohol have been negatively affected by the lockdown and social distancing policies of governments around the world. Further, to strengthen the sale of liquor in developing countries like India, an initiative to expand the home delivery network of alcohol has taken place. However, due to diverse interstate tax policies, the policies failed to gain the potential benefit from these favourable policies.  

Alcohol Ingredients Market Scope:

Segmentation:

• By Ingredient
  • Yeast
  • Enzymes
  • Colors, flavors & salts
  • Others
• By Beverage Type
  • Beer
  • Wine
  • Spirits
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • Spain
    • United Kingdom
    • Italy
    • France
    • Others
  • Middle East and Africa
    • South Africa
    • Turkey
    • Others
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Vietnam
    • Indonesia
    • Australia
    • Others

Frequently Asked Questions (FAQs)

Q1. What will be the alcohol ingredients market size by 2027?
A1. The global alcohol ingredients market is expected to reach a market size of US$18.075 billion by 2027. 

Q2. What is the size of the global alcohol ingredients market?
A2. Alcohol Ingredients Market was valued at US$13.668 billion in 2020.  

Q3. What are the growth prospects for the alcohol ingredients market?
A3. The alcohol ingredients market is expected to grow at a CAGR of 8.23% over the forecast period. 

Q4. What factors are anticipated to drive the alcohol ingredients market growth?
A4. Growing alcohol consumption in various parts of the world is expected to drive the growth of the alcohol ingredients market during the forecast period. 

Q5. Which region holds the largest market share in the alcohol ingredients market?
A5. The North American region is expected to hold a significant share in the market owing to the presence of major players coupled with the ever-growing alcohol consumption in countries like the United States and Canada.