Food-Grade Alcohol Market

ID: MRFR/F-B & N/38713-HCR

128 Pages

Snehal Singh

September 2025

Food-Grade Alcohol Market Research Report By Type (Neutral Spirits, Ethyl Alcohol, Isopropyl Alcohol, Specialty Spirits), By Application (Food and Beverage, Pharmaceuticals, Personal Care, Household Chemicals, Other Industrial Uses), By End-Use Industry (Distilleries, Beverage Companies, Food Processing Industries, Cosmetic Manufacturing, Pharmaceutical Companies), By Distribution Channel (B2B Sales, Direct Sales to Consumers, Online Marketplaces, Retail Stores), By Source (Fermentation (Yeast), Petrochemical Processes, Natural Gas, Other So...

Food-Grade Alcohol Market Research Report — Global Forecast till 2032 Infographic

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Summary Table of Contents Segmentation Infographic

1. Market Overview

2. Market Trends

3. Market Segment Insights

4. Key Players and Competitive Insights

5. Industry Developments

6. Market Segmentation

7. Report Scope

8. Market Highlights

9. FAQs

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Food-Grade Alcohol Market Summary

The Global Food-Grade Alcohol Market is projected to grow from 35.0 USD Billion in 2024 to 42.6 USD Billion by 2035.

Key Market Trends & Highlights

Food-Grade Alcohol Key Trends and Highlights

The market is expected to experience a compound annual growth rate (CAGR) of 1.82% from 2025 to 2035.
By 2035, the market valuation is anticipated to reach 42.6 USD Billion, indicating steady growth.
In 2024, the market is valued at 35.0 USD Billion, reflecting a robust demand for food-grade alcohol.
Growing adoption of food-grade alcohol in various applications due to increasing consumer preference for natural ingredients is a major market driver.

Food-Grade Alcohol Market

CAGR

1.82%

Market Size & Forecast

2024 Market Size	35.0 (USD Billion)
2035 Market Size	42.6 (USD Billion)
CAGR (2025-2035)	1.82%

Major Players

Archer Daniels Midland Company, Cargill, Incorporated, Wilmar International Limited, Ingredion Incorporated, MGP Ingredients, Inc., Diageo, Pernod Ricard, Brown-Forman Corporation, INEOS, SABIC, Solvay, LyondellBasell, Merck KGaA, Eastman Chemical, Evonik Industries, BASF, Koninklijke DSM, DuPont, Mitsubishi Chemical, Lonza, Dow

Food-Grade Alcohol Market Trends

The Food-Grade Alcohol Market continues to grow due to an ever-increasing consumer demand for market-made natural and sustainable ingredients. Consumers prefer products that do not contain any harmful chemicals and are also very additive-free. This consumer force has triggered advances in bio and plant-derived Food-Grade alcohols.

Expansion of the food and beverage industry, increased use of biofuels and the increase in the uptake of green practices are some key drivers. The development of new types of applications for example, alcohol-based disinfectants and personal care products, provide the potential for profitable ventures.

Current trends include an increase in online purchases of Food-Grade alcohol, the use of smart packaging technologies, and the growth of tailored custom alcohol solutions. Companies are expanding their product lines in order to remain relevant to the ever-changing consumer demand. The move towards organic and sustainable approaches is also growing, with manufacturers adopting safe production methods and the use of recyclable and environmentally friendly packaging materials.

The global food-grade alcohol market is poised for expansion, driven by increasing consumer demand for natural and organic products, as well as the rising popularity of craft beverages.

U.S. Department of Agriculture

Food-Grade Alcohol Market Drivers

Rising Demand for Natural Ingredients

The Global Food-Grade Alcohol Market Industry experiences a notable increase in demand for natural and organic ingredients across various sectors, including food and beverages. Consumers are increasingly seeking products that are free from synthetic additives and preservatives. This trend is particularly evident in the beverage industry, where brands are reformulating their products to include food-grade alcohol derived from natural sources. As a result, the market is projected to reach 35.0 USD Billion in 2024, reflecting a growing preference for clean label products. This shift towards natural ingredients is likely to drive innovation and expansion within the Global Food-Grade Alcohol Market Industry.

Market Segment Insights

Food-Grade Alcohol Market Type Insights

The Food-Grade Alcohol Market is segmented by type into Neutral Spirits, Ethyl Alcohol, Isopropyl Alcohol, and Specialty Spirits. Neutral Spirits held the largest market share in 2023, accounting for over 40% of the market. Neutral spirits are unaged, distilled spirits that have been produced from fermented grains or other agricultural products. They are commonly used in the production of alcoholic beverages, such as vodka, gin, and rum.

Ethyl Alcohol is the second largest segment, accounting for over 30% of the market in 2023.Ethyl alcohol, also known as ethanol, is a clear, colorless liquid that is produced by the fermentation of sugars. It is used in a variety of applications, including the production of alcoholic beverages, personal care products, and pharmaceuticals. Isopropyl Alcohol is the third largest segment, accounting for over 20% of the market in 2023. Isopropyl alcohol, also known as rubbing alcohol, is a colorless, flammable liquid that is used as a disinfectant and antiseptic.

It is also used in the production of cosmetics, personal care products, and pharmaceuticals.Specialty Spirits are the smallest segment, accounting for less than 10% of the market in 2023. Specialty spirits are distilled spirits that are produced from specific ingredients or using specific processes. Growth in the market is being driven by increasing demand for alcoholic beverages, personal care products, and pharmaceuticals. The market is also expected to benefit from the growing demand for food-grade alcohol in emerging markets.

Source Primary Research, Secondary Research, Market Research Future Database and Analyst Review

Food-Grade Alcohol Market Application Insights

Segmentation by application is a crucial aspect of the Food-Grade Alcohol Market. In 2023, the Food and Beverage segment held the largest market share, accounting for around 55.2% of the revenue. This dominance is attributed to the extensive use of food-grade alcohol in the production of alcoholic beverages, flavorings, and food additives. The Pharmaceuticals segment is expected to witness significant growth during the forecast period, owing to the increasing demand for alcohol-based pharmaceuticals, such as antiseptics, disinfectants, and drug intermediates.The Personal Care segment is another key application area, with a growing demand for alcohol-based cosmetics, toiletries, and fragrances.

Household Chemicals and Other Industrial Uses segments also contribute to the overall market growth, driven by the use of alcohol in cleaning products, paints, and other industrial applications.

Food-Grade Alcohol Market End-Use Industry Insights

The end-use industry segment of the Food-Grade Alcohol Market is anticipated to witness substantial growth in the coming years. Distilleries, beverage companies, food processing industries, cosmetic manufacturing, and pharmaceutical companies are the major end-use industries for Food-Grade alcohol. The beverage industry is expected to continue to drive the growth of the Food-Grade alcohol market, as it accounts for a significant share of the overall market revenue.

The rising demand for alcoholic beverages, particularly in emerging economies, is fueling the growth of this segment.Distilleries are also expected to contribute to the market growth, as they use Food-Grade alcohol to produce various types of spirits. Furthermore, the food processing industry is expected to witness increased demand for Food-Grade alcohol due to its use as a preservative and flavoring agent.

Food-Grade Alcohol Market Distribution Channel Insights

The Food-Grade Alcohol Market segmentation by Distribution Channel includes B2B Sales, Direct Sales to Consumers, Online Marketplaces, and Retail Stores. Among these, the B2B Sales segment held the largest market share in 2023, accounting for over 55% of the Food-Grade Alcohol Market revenue. This dominance is attributed to the high demand from food and beverage manufacturers, pharmaceutical companies, and other industries that utilize food-grade alcohol as an ingredient or solvent.

Direct Sales to Consumers is another significant distribution channel, with a notable market share, driven by the growing popularity of online retailers and the convenience of home delivery.Online Marketplaces and Retail Stores also contribute to the market growth, offering a wide range of food-grade alcohol products to consumers and businesses alike. The Food-Grade Alcohol Market is expected to continue expanding in the coming years, with each distribution channel playing a vital role in meeting the diverse needs of the market.

Food-Grade Alcohol Market Source Insights

The Food-Grade Alcohol Market segmentation by Source includes Fermentation (Yeast), Petrochemical Processes, Natural Gas, and Other Sources. Among these, Fermentation (Yeast) is expected to hold the dominant share of the market in 2024 and is projected to continue its dominance throughout the forecast period. The growth of the Fermentation (Yeast) segment can be attributed to the increasing demand for bio-based and sustainable products in the food and beverage industry.

Petrochemical Processes are another significant segment in the market, owing to the wide availability and cost-effectiveness of petrochemical feedstock.Natural Gas is also gaining traction as a source of food-grade alcohol due to its relatively low carbon footprint compared to petrochemical processes. Other Sources, such as biomass and algae, are also expected to contribute to the growth of the market in the coming years as research and development efforts continue to improve their efficiency and cost-effectiveness.

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Regional Insights

The regional segmentation of the Food-Grade Alcohol Market showcases distinct market dynamics across various regions. North America held a significant market share in 2023, driven by the presence of established food and beverage industries and stringent regulatory frameworks. Europe follows closely, with a mature market characterized by high demand for high-quality food-grade alcohol for consumption and industrial applications.

The Asia-Pacific (APAC) region is projected to witness robust growth over the forecast period, attributed to the burgeoning food and beverage sector and increasing disposable income.South America and the Middle East and Africa (MEA) regions are expected to contribute a notable share to the overall market, with growing demand from emerging economies and expanding food processing industries.

Food-Grade Alcohol Market Regional Insights

Source Primary Research, Secondary Research, Market Research Future Database and Analyst Review

Key Players and Competitive Insights

Major players in Food-Grade Alcohol Market industry are actively involved in strategic partnerships, mergers, and acquisitions to expand their presence and strengthen their market position. Leading Food-Grade Alcohol Market players are investing heavily in research and development to introduce innovative products and technologies that cater to the evolving needs of customers. The Food-Grade Alcohol Market is highly competitive, with several key players operating across the globe. These companies are constantly vying for market share through various strategies, including product innovation, strategic acquisitions, and geographical expansion.

Archer Daniels Midland Company, Cargill, Incorporated, Wilmar International Limited, Ingredion Incorporated, and MGP Ingredients, Inc. are some of the prominent players in the Food-Grade Alcohol Market. These companies have a strong presence and offer a wide range of food-grade alcohol products to meet the diverse needs of their customers. They have established a strong distribution network and have a wide customer base across various industries, including food and beverage, pharmaceutical, and personal care.

These companies are continuously investing in research and development to enhance their product portfolio and cater to the evolving demands of the market.Diageo, Pernod Ricard, and Brown-Forman Corporation are some of the leading players in the alcoholic beverage industry. These companies have a strong presence and offer a wide range of alcoholic beverages, including whiskey, vodka, rum, and gin. They are constantly innovating and introducing new products to meet the evolving tastes and preferences of consumers. These companies have a strong brand portfolio and have built a loyal customer base over the years.

They have a well-established distribution network and have a wide reach.

Key Companies in the Food-Grade Alcohol Market market include

Industry Developments

The Food-Grade Alcohol market has been witnessing steady growth in recent years, driven by rising demand from various industries such as pharmaceuticals, food and beverages, and personal care. In 2023, the market was valued at approximately USD 34.72 billion and is projected to reach USD 40.51 billion by 2032, exhibiting a CAGR of 1.73% during the forecast period. This growth is attributed to increasing health consciousness, rising disposable income, and expanding applications of food-grade alcohol in emerging economies. Additionally, the growing adoption of bio-based and sustainable alcohol production methods is expected to drive market expansion in the coming years.

Recent news developments include the strategic partnership between Archer Daniels Midland Company and LG Chem to enhance the production of bio-based ethanol and the acquisition of Frutarom by IFF to strengthen its position in the food and beverage flavorings market. These developments highlight the ongoing consolidation and innovation within the Food-Grade Alcohol market.

Future Outlook

Food-Grade Alcohol Market Future Outlook

The Global Food-Grade Alcohol Market is projected to grow at 1.82% CAGR from 2024 to 2035, driven by increasing demand in food and beverage applications, regulatory support, and innovation in production processes.

New opportunities lie in:

Expand product lines to include organic and natural food-grade alcohols.
Invest in sustainable production technologies to reduce environmental impact.
Develop strategic partnerships with food manufacturers for customized alcohol solutions.

By 2035, the market is expected to demonstrate robust growth, reflecting evolving consumer preferences and industry advancements.

Market Segmentation

Food-Grade Alcohol Market Type Outlook

Food and Beverage
Pharmaceuticals
Personal Care
Household Chemicals
Other Industrial Uses

Food-Grade Alcohol Market Source Outlook

North America
Europe
South America
Asia Pacific
Middle East and Africa

Food-Grade Alcohol Market Regional Outlook

North America
Europe
South America
Asia Pacific
Middle East and Africa

Food-Grade Alcohol Market Application Outlook

Distilleries
Beverage Companies
Food Processing Industries
Cosmetic Manufacturing
Pharmaceutical Companies

Food-Grade Alcohol Market End-Use Industry Outlook

B2B Sales
Direct Sales to Consumers
Online Marketplaces
Retail Stores

Food-Grade Alcohol Market Distribution Channel Outlook

Fermentation (Yeast)
Petrochemical Processes
Natural Gas
Other Sources

Report Scope

Report Attribute/Metric	Details
Market Size 2022	34.13(USD Billion)
Market Size 2023	34.72(USD Billion)
Market Size 2032	40.51(USD Billion)
Compound Annual Growth Rate (CAGR)	1.73% (2024 - 2032)
Report Coverage	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Base Year	2023
Market Forecast Period	2024 - 2032
Historical Data	2019 - 2023
Market Forecast Units	USD Billion
Key Companies Profiled	INEOS, SABIC, Solvay, LyondellBasell, Merck KGaA, Eastman Chemical, Evonik Industries, BASF, Archer Daniels Midland, Cargill, Koninklijke DSM, DuPont, Mitsubishi Chemical, Lonza, Dow
Segments Covered	Type, Application, End-Use Industry. Distribution Channel, Source, Regional
Key Market Opportunities	Growing demand for natural and organic food and beverage products Increasing use of Food-Grade alcohol in pharmaceuticals and cosmetics Rising disposable income in emerging economies Innovations in Food-Grade alcohol production technologies Expansion of e-commerce platforms for Food-Grade alcohol sales
Key Market Dynamics	Increasing demand for natural and organic food products Rising awareness of the health benefits of Food-Grade alcohol Growing consumption of alcoholic beverages in emerging markets Technological advancements in production processes Stringent regulatory standards and certifications
Countries Covered	North America, Europe, APAC, South America, MEA

FAQs

What is the market size of the Food-Grade Alcohol Market?

The Food-Grade alcohol market is expected to reach USD 40.51 billion by 2032, exhibiting a CAGR of 1.73% during the forecast period (2024-2032).

Which region holds the largest market share in the Food-Grade Alcohol Market?

Asia Pacific is the largest market for Food-Grade alcohol, accounting for over 40% of the market share. The region's large population and growing demand for processed foods and beverages are driving the market growth.

What are the key applications of Food-Grade Alcohol?

Food-Grade alcohol is primarily used in the production of alcoholic beverages, such as beer, wine, and spirits. It is also used in the manufacturing of food products, including flavorings, extracts, and confectionery products. Additionally, Food-Grade alcohol finds applications in the pharmaceutical and personal care industries.

Who are the key competitors in the Food-Grade Alcohol Market?

Key competitors in the Food-Grade alcohol market include Archer Daniels Midland Company, Cargill, Incorporated, BASF SE, MGP Ingredients, Inc., and Wilmar International Limited.

What are the growth drivers of the Food-Grade Alcohol Market?

The growing demand for alcoholic beverages and processed foods, coupled with the increasing use of Food-Grade alcohol in pharmaceuticals and personal care products, are the key growth drivers of the Food-Grade alcohol market.

What are the challenges faced by the Food-Grade Alcohol Market?

The Food-Grade alcohol market faces challenges such as stringent government regulations on alcohol production and consumption, fluctuating raw material prices, and competition from alternative alcohol sources such as bioethanol.

What is the expected growth rate of the Food-Grade Alcohol Market?

The Food-Grade alcohol market is anticipated to exhibit a CAGR of 1.73% during the forecast period (2024-2032).

Which application segment is expected to hold the largest market share in the Food-Grade Alcohol Market?

The alcoholic beverages segment is expected to hold the largest market share in the Food-Grade alcohol market throughout the forecast period.

What is the impact of COVID-19 on the Food-Grade Alcohol Market?

The COVID-19 pandemic had a significant impact on the Food-Grade alcohol market due to disruptions in supply chains, lockdowns, and reduced demand for alcoholic beverages and processed foods. However, the market is expected to recover in the coming years as economies reopen and demand for Food-Grade alcohol returns to pre-pandemic levels.

What are the key trends in the Food-Grade Alcohol Market?

Key trends in the Food-Grade alcohol market include the growing adoption of sustainable production practices, the increasing demand for premium and craft alcoholic beverages, and the use of Food-Grade alcohol in innovative applications such as hand sanitizers and disinfectants.

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