Brewing Ingredients Market Drivers, Restraints, Opportunities & Challenges

Brewing Ingredients Market by Source (Malt Extract, Adjuncts/Grains, Hops, Beer Yeast, and Beer Additives), Brewery Size (Macro Brewery and Craft Brewery), Form (Dry and Liquid), and Region - Global Forecast to 2026


Northbrook, IL -- (SBWIRE) -- 01/13/2022 -- The brewing ingredients market is estimated at USD 34.5 billion in 2021; it is projected to grow at a CAGR of 6.8% to reach USD 47.9 billion by 2026. The rise in demand for beers from all over the globe coupled with increasing consumption of craft beers will drive the market demand and growth of brewing ingredients globally.

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Drivers: Increasing demand for low- or zero-alcohol content beer

With changing lifestyles, there is an increase in health awareness. This awareness has created a demand for healthier products in the food & beverage industry. Due to this, the demand for beer with low-alcohol content is increasing. According to the ADM survey, in 2020, a total of 51% of consumers are looking for items that contribute to their metabolic health to promote healthy weight. Low-alcohol products are no longer considered inferior ones. On the other hand, these products are more in demand, as they offer the taste and experience of alcohol - minus the guilt. Consumers are looking for beers with high protein and other nutritious content and reduced carb, sugar, and alcohol content.

The young population, in particular, is more health aware and looking for healthy beverages that won't sabotage their health goals and commitments. Heineken USA conducted a survey of millennials in 2020, which showed that 52% of respondents had increased the consumption of alcohol-free beer and mocktails. Another major factor for the increase in demand for zero-alcohol content beer is that it allows consumers to drink in moderation and regularly. The survey also shows that 42% of respondents were likely to choose an alcohol-free beer because it allows them to drink regularly.

Restraint: Stringent regulations in the beer industry

Brewing ingredients such as malt, yeast, hops, and beer additives are used in different combinations to produce different beers with varying alcohol content. The beer industry faces many stringent regulations which limit its sale and consumption in different countries. In the US, several government agencies such as the US FDA, US TTB (Alcohol and Tobacco Tax and Trade Bureau), and the US EPA (Environmental Protection Agency) are responsible for stringent rules regarding the impact of beer packaging materials & emissions on the environment. Moreover, rules regarding the legal age for the consumption of alcoholic beverages limit the sale of beers. For example, Minimum Legal Drinking Age (MLDA) laws specify the legal age when an individual can purchase alcoholic beverages. The MLDA in the US is 21 years. This regulation has a hindering impact on sales and thus limits production. Thus, this negatively affects the brewing ingredients market.

Opportunity: Introduction of new flavors in beer

The increase in beverage consumption has led to intense competition amongst beer brands, resulting in the introduction of new flavors and increasing beer consumption. There is a growing popularity for craft beers as it offers various flavors besides the regular flavors offered by macro breweries. The introduction of new ingredients and innovative flavors, combining salty, fruity, and tart flavors, by craft beers, has found an increasing appeal among the millennial crowd globally. Some of the macro brewers are also acting on to respond to these changing demands from consumers. For example, Heineken USA, in 2021, launched Dos Equis Lime & Salt variety pack of lager beer. Similarly, Latambarcem Brewery (India), in 2020, launched a new craft beer brand called Maka di that currently serves four brews: Honey Ale, Belgian Tripel, Bavarian Keller, and Belgian Blanche. The introduction of these new flavors is projected to increase the sales and consumption of beer. Thus, this is anticipated to provide ample opportunities to players operating in the global market.

Challenge: Consumer shift to alternative beverages in North America

According to an article published in CNN, by author Jordan Valinsky, in 2019-December, beer consumers in the US are moving toward different and innovative alcoholic drinks for recreational purposes such as premium liquor, canned wine, spiked seltzers, and pre-made bottled cocktails. Consumers in the US are considering beer as an outdated recreational drink. According to the ISWR Drinks Market Analysis, in 2018, alcohol consumption in the US dropped for the third straight year. This drop was majorly due to a decline in beer sales, which dropped 1.5% in 2018 compared to 2017. Moreover, for the past five years, beer volume in the US has declined by 2.4%. Similarly, the consumption of beer in Canada is decreasing due to demographic shifts with the rising senior population.

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Key players in this market include major players such as Cargill, Incorporated (US), Angel Yeast Co. Ltd. (China), Boortmalt (Belgium), Malteurop Groupe (France), Rahr Corporation (US), Lallemand Inc. (Canada), Viking Malt (Sweden), Lesaffre (France), Maltexco S.A. (Chile), and Simpsons Malt (UK) . These major players in this market are focusing on increasing their presence through expansions & investments, mergers & acquisitions, partnerships, joint ventures, and agreements. These companies have a strong presence in North America, Asia Pacific, and Europe. They also have manufacturing facilities along with strong distribution networks across these regions.

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