The alcohol ingredients market is expected to grow from USD 3.433 billion in 2025 to USD 4.367 billion in 2030, at a CAGR of 4.93%.
The alcohol ingredients market is benefiting from the rising production of alcoholic beverages. Under these different beverages, the content of ethanol & alcohol varies depending upon the type of beverage. The market growth is driven by the increased consumption of alcoholic beverages globally, specifically by the young population.
With the growing adoption of Western culture coupled with rapid urbanization trends, the consumption of alcoholic beverages is on the rise globally. The young population is expected to be the major consumer base for these beverages. The rapid rise in alcohol consumption in developed & developing economies will continue to boost market growth till the forecast period. The shifting demographic & changing tastes & preferences of consumers continue to generate growth in innovative product offerings by the market players. According to estimates from the Brewers Association, in the US, in 2021, the retail sales of craft beer increased by around 21% after witnessing slow demand in the 2019 & 2020 periods. The sales were primarily affected due to pandemic restrictions. The total beer sales also increased by around 1%. by volume in 2021. These figures indicate favorable prospects for alcoholic ingredients market growth till the forecast period.
The major growth driver for the alcohol ingredients market is the consumption of alcohol among consumers. In recent years, the growing emergence of pubs, nightclubs & bars are a major factor in promoting the consumption of alcoholic beverages globally. Alcoholic beverages such as beer, wine, whisky, and vodka are produced using these ingredients. According to Eurostat, the EU member states produced around 33.15 billion liters of beer with alcohol content in 2021. Beer-containing alcohol increased by up to 3% in 2021 compared to 2020. This reflects the positive projections for alcohol production that will further boost the market growth for alcohol ingredients in the long term. Furthermore, the growing demand for low-alcohol-content beverages is expected to promote market development.
The increasing awareness about different flavored alcoholic beverages & several varieties of mocktails and bears, among others, will positively impact the market growth. Key developments in the alcohol ingredients market include innovative products by key market players. For instance, in 2021, Angel Yeast, a company producing a variety of yeast strains to suit different alcoholic beverages, invested in the acquisition & production system along with Shandong Lufa Holding company. Manufacturers are also creating innovative products with combinations of colorants, yeast, flavors, and enzymes to suit different consumer needs. Additionally, manufacturers greatly focus on product premiumization due to the rising consumption of craft beers and flavored spirits in various countries.
The booming consumption of alcohol coupled with the new technological development in alcohol production are driving the demand for alcohol ingredients in the North American region. For instance, according to the US Census data, in February 2023, sales of beer, wine, and distilled alcohol in the United States stood at US$16,407 million, which represented an increase of 1.3% and 8.7% over 2022 and 2021 sales for the same month. Moreover, the growing number of beer & wine manufacturers in the US and the ever increasing young population are further propelling the market growth. According to the Brewers Association, in 2022, the total number of operating breweries in the US stood at 9,709, which signified an increase of 3.5%
Segmentation: