Brewing Ingredients Market Size, Share & Trends Analysis Report By Product Type (Malt Extract, Grain, Yeast, Beer Additives), By Function Type (Fragrance, Preservatives, Flavor, Proteins), By End-User (Microbreweries, Brewpubs, Contract Breweries, Craft Brewers) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global brewing ingredients market size was valued at USD 11,502.9 million in 2022. It is estimated to reach USD 21,308.36 million by 2031, growing at a CAGR of 7.09% during the forecast period (2023–2031).

Beer is made by steeping a starch source in water and fermenting the resulting sweet liquid with yeast in a brewery. A commercial brewer or a variety of other techniques may be used. Water and a source of fermentable starch, such as yeast, hops, and cereal grains, the most widely consumed of which is malted barley, are the primary components used in the production of beer. Beer gets its color, protein, flavor, bitterness, aroma, stability, and dextrins from these ingredients. About 95% of beer is water, and the mineral content of the water is altered to meet the needs of the beer. Additionally, "spent grain" and the sediment (or "dregs") from the filtration process are brewing by-products that can be dried and sold as "brewers dried yeast" for poultry feed or made into yeast extract that is used in various brands.

Highlights

• Malt Extract dominates the product type segment.
• Preservatives dominate the function type segment.
• Microbreweries dominate the end-user segment.
• Europe is the highest shareholder in the global market.

Market Dynamics

Global brewing ingredients market drivers

Growing alcoholic beverage consumption in emerging markets

Global alcohol consumption is increasing due to a bigger population and increased financial resources. In particular, the developing world has seen increased alcohol consumption in recent years. Data from the Global Health Observatory show that since 2010, the average amount of alcohol consumed per capita by adults in nations like India, Vietnam, Bulgaria, and Romania has increased by about 30%. Numerous factors, such as improving economic conditions, rapid urbanization, changing lifestyles, and increased accessibility to alcoholic beverages, are blamed for the rise in alcohol consumption.

The economies of some nations with the fastest growth rates are Brazil, South Africa, Vietnam, India, and South Africa. The increase in disposable income in these developing nations results from a strengthening economy. As a result, sales of alcoholic beverages increase. Further, beer is one of the most consumed alcoholic beverages worldwide. Beer sales increase as a result of the increased demand for alcohol. The industry for brewing ingredients is expanding as a result of increased beer sales.

Increased global craft beer

The popularity of craft beer has increased during the past few years. The culture around craft beer experienced explosive growth after the year 2010. The Brewers Association estimated that between 2008 and 2016, the number of brewery locations in the U.S. increased by a factor of six. In addition, according to data from the Bureau of Labor Statistics, the number of workers in breweries increased by nearly 120 percent during the same period.

One of the main factors driving the craft beer segment growth in the United States was the falling costs of production equipment and the simplicity of local businesses using social media for advertising. Similar to developed nations, developing nations adopted the craft beer craze. For instance, the craft beer market in India rose from less than 1% in 2010 to roughly 3% in 2020. In addition, the craft beer market segment's growth is driven by increased craft beer brands and the expansion of brewpub culture in major cities. The popularity of craft beers is raising the demand for the ingredients used in their brewing, encouraging the market's sales of brewing supplies.

Global brewing ingredients market restraints

Strict regulation and unfavorable taxation policies

In many nations worldwide, the laws governing the production, sale, and consumption of alcohol are strict. For instance, the sale and production of alcoholic beverages are monopolized by the government in some of the central and eastern European, Nordic, and American states. Additionally, several nations have drinking restrictions in place to limit alcohol consumption. Government agencies in nations like the USA, UK, Singapore, and Japan carry out recommendations regarding alcohol consumption. However, drinking alcohol is only lawful for those over the age of 18 in a majority of countries.

Additionally, alcohol is subject to value-added tax (VAT), which many governments levy. The VAT rates on beer are among the highest in places like Iceland, the Philippines, Japan, and Nepal. It is anticipated that all of these limitations and tariff policies will restrict the sale of beer, which will hinder the market for brewing ingredients from expanding.

Global brewing ingredients market opportunities

New flavor introductions in the beer industry

Many beer brands are creating creative beer flavors to meet the varied consumer demand. There are many different types of beers on the market, each with unique qualities. The market players provide a variety of beers, including pale lager, dark lager, German bock, brown ale, pale ale, porter, and stout. Various ingredients are needed to brew each of these types of beers. Additionally, beer companies are providing creative beers in a variety of flavors.

For instance, Samuel Adams Chocolate Bock, a beer from the Boston Beer Company, combines beer's malty flavor with chocolate's sweetness. Contrarily, Sierra Nevada Brewing Company offers Coffee Stout, which combines rich, cold-brewed coffee with layers of fruity, bittersweet, dark chocolate and flavors resembling caramel. Brewers' innovative flavors call for brewing ingredients. In turn, this offers opportunities for market participants in brewing ingredients to provide specialty goods to brewers.

Regional Analysis

Based on region, the global brewing ingredients market is divided into North America, Europe, Asia-Pacific, and RoW.

Europe dominates the global market

Europe is the most significant global ingredients market shareholder and is anticipated to grow at a CAGR of 6.63% during the forecast period. A significant portion of the European market for brewing ingredients is held by Germany, the UK, Belgium, and Poland, all of which have room for expansion. The European region's market is partly expanding due to the substantial production from France and Belgium. Additionally, the expansion of beer bars and pubs in Europe's newer regions contributes to the expansion of this market there. Due to the presence of numerous beer brewing businesses, including Boortmalt, Malteurop Groupe, Viking Malt, and Lesaffre, the European region dominates the market for brewing ingredients. For instance, Boortmalt NV announced plans to reopen its Cavan, South Australia, malting facility starting in the middle of this year in April 2021.

In Australia, Boortmalt trades as Joe White Malting. One of the seven malthouses purchased by Boortmalt Asia-Pacific in November 2019 was the Cavan malting plant. The market for brewing ingredients in this region is expected to boost rapidly due to the consumers' high preference for flavored beers and their higher purchasing power. Furthermore, the market for sustainably sourced brewing ingredients in Europe is expanding due to government-friendly rules and regulations. The development of chocolate beer in the European market is fueled by favorable government regulation in nations like Belgium and the United Kingdom.

North America is anticipated to exhibit a CAGR of 7.01% over the forecast period. The United States dominates the market for North American brewing ingredients in the region of North America. The presence of major beer brewing companies in the area, including Cargill, Incorporated, Rahr Corporation, and Lallemand Inc, aids the growth of this market in the North American region. In order to strengthen their market share, these businesses are also experimenting with new flavors of flavored beer products. Cargill Incorporated introduced the 95% pure fructose syrup C-TruSweet 01795 in July 2020. It is distinguished by having a naturally higher relative sweetness than sucrose. It provides the same sweet flavor at lower usage levels, enabling a 30% reduction in sugar, calories, and other food applications. The malt market in this region is driven by rising consumption and the presence of sizable brewing and alcoholic beverage industries.

Asia-Pacific is expected to witness the quickest growth in the global market for brewing ingredients due to increased disposable income and a thriving alcoholic beverage industry. The biggest beer market in the world right now is found in China. Beer is consumed worldwide each year in amounts totaling 45.7 billion liters. Due to the significant change in the social lifestyle of the working population, beer is one of the widely consumed alcoholic beverages in the Asia-Pacific region. In addition, beer consumption in India has significantly increased due to a growing youth population who prefer beer. The growth in this area is primarily attributed to rising disposable income and rising demand among the young population for flavored beer. Another factor driving the growth of the brewing ingredients market is rising disposable income, followed by rising brewing ingredient consumption.

South American region is predicted to experience a healthy growth rate of 5.31% in the global market for brewing ingredients due to rising disposable income and the expanding alcoholic beverage industry. Brazil is one of the largest beer markets in the world, and in 2016, 7.8 liters of pure alcohol were consumed per person over the age of 15. Among Brazilians with high incomes, some beer drinkers are becoming picky about which liquor they consume. Brewing ingredients are widely consumed in Middle Eastern nations like Saudi Arabia and the United Arab Emirates. However, beer consumption is noticeably less common in North Africa than elsewhere. In these areas, 5–10% of adults typically drank within the previous year.

Segmental Analysis

The global brewing ingredients market is segmented into product type, function type, and end-user.

Based on product type, the global ingredients market is divided into malt extract, grain, yeast, and beer additives.

The malt extract segment is the largest contributor to the market and is expected to exhibit a CAGR of 7.29% during the forecast period. Malt extract is produced during the malting process from the germination of barley grain. Alcohol is frequently brewed using malt extract. Browning agents such as malt extracts are used. The color and flavor of alcohol are imparted using specialty and black malt extracts. Most homebrewers make their beer using malt extract. As a result, many market players offer a variety of malt extracts due to their demand at such a micro level of the market. In temperatures between 10 and 21 °C (50 and 70 °F), dried malt extract can be kept for up to a year, and liquid malt extracts can be kept for up to two years if pasteurized. Due to their high demand, many local and well-established players are offering malt extracts. A wide selection of malt extracts is available from reputable companies like Boortmalt and Malteurop Groupe.

Based on function type, the global brewing ingredients market is divided into fragrance, preservatives, flavor, and proteins.

The preservatives segment owns the highest market share and is predicted to grow at a CAGR of 7.43% during the forecast period. Preservatives are used to stop bacteria from developing and potentially ruining beer's flavor. They are also employed to increase the drink's shelf life. Due to strict regulations governments impose worldwide, the use of natural preservatives in beers is increasing. The most common natural preservative in beer is hop. Hop's inherent antibacterial properties limit the development of bacteria and yeast in beer, preserving the beverage's flavor. Further, natural preservatives are expanding due to the health risks associated with artificial preservatives. Preservatives are also added to keep the beer's sweetness and bitterness level in check. Preservatives, both artificial and natural, are sold on the market. Various natural preservatives from Brew Shield are available to safeguard the beer's color, flavor, and aroma.

Based on end-user, the global brewing ingredients market is divided into microbreweries, brewpubs, contract breweries, and craft brewers.

The microbreweries segment is the highest contributor to the market and is anticipated to grow at a CAGR of 6.69% during the forecast period. In 2020, the microbreweries industry will hold a 38.04% end-user market share for brewing ingredients. Any independent brewery that uses brewing ingredients and produces less than 15,000 beer barrels annually is referred to as a microbrewery. Microbreweries supply craft beer to distributors, shops, and dining establishments. It primarily caters to neighborhood markets, and some eateries have on-site breweries. In addition, microbreweries sell their products to the general public through retailers and wholesalers. It can sell products directly to customers through takeout orders, on-site sales at a taproom or restaurant, or both. Regional microbreweries have increased their market share of beer sales globally over the last ten years. The microbrewery market is driven by several regional brands transitioning from specialty markets to supermarkets. In developed countries, there are many microbreweries.

Recent Developments

• February 2023- Stone Brewing released a beer with a new ingredient, ‘Phantasm.’
• April 2022- Rahr Corporation and Marcus Baskerville, a pioneer in the craft brewing sector, launched an innovative incubation program. It aims to assist and foster the growth of underrepresented groups in the sector. The Harriet Baskerville Incubation Program will offer women and Black, Indigenous, and People of Color (BIPOC) brewers structured brewing education, training, professional mentoring, and resources.