China alcohol ingredients market is projected to grow at a CAGR of 3.05% to reach a market size of US$3.430 billion by 2027 from US$2.779 billion in 2020.
The estimation is substantiated by the nominal increase in the per capita disposable income of residents nationwide during the first half of 2020 by 2.4 % over the same period of last year and accounted for 15,666 yuan. Among them, the per capita disposable income of urban residents accounted for 21,655 yuan, an increase of 1.5 %. Further, In the first half of the year, the per capita consumption expenditure on food, tobacco, and alcohol was 3,097 yuan, an increase of 5.0 %, accounting for 31.9 % of the per capita consumption expenditure. On the other hand, the potential for the growth of this market is also dependent in part due to the total Chinese population on the mainland, which reached 1,400.05 million, which is a reported increase of 4.67 million over that registered at the end of 2018. Besides this total population, permanent urban residents numbered 848.43 million, accounting for 60.60 % of the total population, which is 1.02 % higher than recorded data over the same period last year. Moreover, the rate of urbanization of the population with household registration was 44.38 %, a reported 1.01 percentage points higher than that at the end of 2018. It is also important to note that in 2019, the total retail sales of consumer goods reached 41,164.9 billion yuan, reporting a growth of 8.0 % over the previous year. Out of the total retail sales of commodities, liquor sales were up by 7.4 %. Also, in 2019, the value-added of the hotels and catering services was 1,804.0 billion yuan, up by 6.3 % over the previous year [Source: National Bureau of Statistics of China]. Thus, the aforementioned market conditions are conclusively conducive not only to the liquor industry but also to the potential growth of the same in the foreseeable future. These developments are, in turn, expected to foster the growth of China's alcohol ingredient market.
The consumption of alcohol worldwide is governed by a certain salient factor that facilitates the growth of the liquor market and paves the way for more product inclination and promotes its subsequent sales. The same is the case for China. Partly based on the factors mentioned earlier, Chinese consumption patterns are shifting. They are increasingly geared toward products that cater to their taste and are not just restricted to value for money. Further, a surge in wine consumption and high investments in advertisements to reach out to younger consumers are also expected to fuel the growth of the alcohol ingredients market. These changes have led to certain developments that are expected to influence the china alcohol ingredient market positively. For instance, in April 2019, it was reported that Diageo and Jiangsu Yanghe Distillery Co., Ltd announced the launch of Zhong Shi JiTM, which is essentially a whiskey that is specially crafted with care by master blenders and distillers from China and Scotland. The company's new product line expands its product offering and opens the way for sustainable alcohol production. This new product development has been carried out through a joint venture formed between Diageo and Yanghe, China’s third-largest Baijiu distiller.
Impact of COVID-19
The abrupt outbreak of coronavirus illness (COVID-19) quickly swept over the world, with no country escaping the worldwide pandemic. Within months of the start of COVID19, established social isolation and lockdowns in their respective communities. The current pandemic's indiscriminate character has had an impact on people's health and wellbeing, as well as the supply networks, economy, and countries. The unexpected interruption has impacted the food system and service sector in the food and beverage production industries, while major cities in China shut it down for several months.
Alcohol Ingredients Market Segmentation
Amano Enzyme China Ltd. (Amano Enzyme Inc.)
Firmenich Aromatics (China) Co. Ltd (Firmenich SA)
Jiangsu Boli Bioproducts Co., Ltd.
Shenyang Fada Co., Ltd
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