Brewing Ingredients Market Share, Growth, Opportunities 2032

Report Description

Brewing Ingredients Market Outlook 2032

The global brewing ingredients market size was USD 39.36 Billion in 2023 and is projected to reach USD 68.36 Billion by 2032, expanding at a CAGR of 6.7 % during 2024–2032. The market growth is attributed to the increasing demand for craft beer and innovative brewing techniques globally.

Increasing globalization and changing consumer preferences are propelling the global brewing ingredients market. Rising demand for high-quality brewing ingredients that enhance the flavor, aroma, and overall experience of craft brews, as the craft beer revolution continues to gain momentum. Brewers are increasingly focusing on sourcing premium ingredients such as specialty malts, hops varieties with unique flavor profiles, and specialty yeast strains to create distinctive and marketable beers.

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Growing awareness about the health benefits of certain brewing ingredients is fueling the market. Ingredients such as organic grains, gluten-free alternatives, and natural flavorings are gaining traction among health-conscious consumers, prompting breweries to diversify their product offerings. Furthermore, rising popularity of low-alcohol and non-alcoholic beverages has created new avenues for breweries to innovate with ingredients that impart flavor without compromising on taste or quality.

Government regulations regarding food safety, labeling requirements, and alcohol content standards influence ingredient sourcing, production processes, and marketing strategies for breweries globally. Adherence to these regulations ensures product quality and safety and enhances consumer trust and market credibility. Regulatory compliance remains a key consideration for breweries seeking to capitalize on emerging trends and tap into new market segment, as the industry continues to evolve. For instance,

• In January 2022, the Food and Drug Administration (FDA) implemented strict labeling requirements for alcoholic beverages, including beer products. Breweries required to provide detailed nutritional information on their packaging, including calorie counts, carbohydrate content, and alcohol by volume (ABV) percentage. This regulation aims to enhance consumer transparency and enable informed choices regarding dietary preferences and alcohol consumption.

Impact of Artificial Intelligence (AI) in Brewing Ingredients Market

The impact of artificial intelligence (AI) on brewing ingredients is profound. AI algorithms analyze vast datasets to optimize brewing processes, improve ingredient sourcing, and enhance product quality. By leveraging AI, breweries gain insights into flavor profiles, ingredient combinations, and brewing techniques, leading to innovative and customized brews that meet consumer demands. AI-driven solutions streamline inventory management, reduce waste, and enhance cost-effectiveness, contributing to the overall efficiency and competitiveness of breweries in the evolving market landscape. For instance,

• In March 2023, Anheuser-Busch InBev implemented AI-powered predictive analytics to optimize ingredient procurement and production scheduling. By analyzing historical data and market trends, the brewery's AI system accurately forecasts ingredient demand, minimizes inventory shortages, and reduces production costs.

Brewing Ingredients Market Dynamics

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Major Drivers

Increasing consumer demand for unique and personalized brews is driving the market. Consumers are increasingly seeking diverse flavors, innovative ingredients, and craft-quality beverages, spurring breweries to experiment with a wide range of hops, malts, yeast strains, and adjuncts. This trend toward customization and flavor experimentation is reshaping the brewing industry, with breweries focusing on creating distinctive and marketable products to cater to evolving consumer preferences and enhance brand differentiation. For instance,

• In September 2023, Stone Brewing Co., a leading craft brewery, announced the launch of a new line of beers featuring locally sourced organic hops and malt. This initiative aligns with the growing consumer preference for sustainably produced and environmentally friendly brewing ingredients.

Growing awareness about sustainability and environmental responsibility is propelling the market. Breweries are increasingly prioritizing sustainable sourcing practices, organic ingredients, and eco-friendly packaging solutions to minimize their environmental footprint. This sustainability-driven approach aligns with consumer values and enhances brand reputation, fosters customer loyalty, and attracts environmentally conscious consumers.

Rising popularity of low-alcohol and non-alcoholic beverages is spurring the market. Consumers seeking healthier lifestyle choices are gravitating toward low-alcohol beers, alcohol-free alternatives, and functional beverages with added nutritional benefits. Breweries are responding by developing innovative brewing ingredients such as low-alpha hops, reduced-calorie malts, and flavor enhancers to meet the evolving preferences of health-conscious consumers.

Existing Restraints

Fluctuating prices of brewing ingredients hops and specialty malts, are expected to pose challenges to breweries. Volatility in ingredient costs hamper the profit margins and operational planning, leading to increased production costs and pricing pressures on finished products.

Limited availability of rare or exotic brewing ingredients, such as certain hop varieties or specialty malts impede breweries' ability to innovate and differentiate their products. The scarcity of these ingredients restricts breweries from creating unique flavor profiles, limiting the market.

Emerging Opportunities

Increasing demand for organic brewing ingredients presents a significant opportunity in the global brewing ingredients market. Consumers' growing preference for organic and sustainably sourced products has led breweries to seek certified organic hops, malts, and yeast strains. This trend is expected to drive the adoption of organic brewing ingredients, offering breweries the opportunity to cater to health-conscious consumers, enhance brand reputation, and tap into niche market.

Rising interest in novel flavor profiles and experimental brewing techniques is creating opportunities for innovative brewing ingredients. Breweries are increasingly experimenting with unique hop varieties, specialty malts, and adjuncts to create distinct and memorable flavors in their beers. This trend toward flavor experimentation and diversity is projected to fuel the demand for specialty and exotic brewing ingredients. For instance,

• In July 2020, Cargill Incorporated introduced TruSweet 01795, a product designed to reduce sugar and calorie content by 30% in beverages and other food applications through low usage levels.

Growing awareness and adoption of alternative brewing ingredients, such as non-traditional grains, fruits, spices, and botanicals, are opening new avenues for ingredient innovation in the brewing industry. Brewers are exploring diverse ingredient options to create gluten-free beers, fruit-infused brews, herbal blends, and experimental styles. Increasing popularity of craft beers and consumer demand for unique experiences are driving breweries to experiment with unconventional brewing ingredients, offering opportunities for ingredient suppliers to introduce innovative products and cater to evolving consumer tastes.

Scope of the Brewing Ingredients Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report.

Regional Outlook

In terms of region, the global brewing ingredients market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Europe held a major market share in 2023, due to its strong brewing tradition, robust craft beer culture, and high demand for premium brewing ingredients. The breweries in the region prioritize quality, authenticity, and innovation, driving the demand for diverse hops varieties, specialty malts, and unique yeast strains. Additionally, the presence of renowned breweries, craft beer festivals, and growing interest in artisanal brews drives the market.

The market in Asia Pacific is projected to grow at a significant pace in the forecast period, owing to the rising popularity of craft beer and the emergence of microbreweries across countries such as China, India, and Japan. These markets are experiencing a shift toward premiumization and experimentation in brewing, leading to the high demand for high-quality ingredients. Additionally, changing consumer preferences, urbanization, and growing middle-class population with disposable income are driving the consumption of craft and specialty beers in the region.

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Brewing Ingredients Market Segment Insights

Ingredient Type Segment Analysis

Based on ingredient type, the brewing ingredients market is divided into hops, malts, yeast, adjuncts, and water treatments & additives. The hops segment held a major share of the market in 2023 and is expected to expand at a significant growth rate in the coming years, owing to its critical role in imparting flavor, aroma, and bitterness to beers. Craft breweries and commercial breweries prioritize the use of diverse hops varieties, including aromatic hops, dual-purpose hops, and high-alpha acid hops, to create unique and distinctive brews. Additionally, growing popularity of hop-forward beer styles such as India Pale Ales (IPAs) and pale ales has fueled the segment.

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Source Segment Analysis

On the basis of source, the global market is segregated into conventional, organic, and GMO-free. The conventional segment held the largest share of the market in 2023 due to its widespread availability, established supply chains, and cost-effectiveness. Conventional brewing ingredients, such as hops, malts, and yeast, are used by breweries of all sizes due to their accessibility and relatively lower pricing compared to organic and GMO-free alternatives. Additionally, consumer preferences for traditional beer styles and affordability contribute to the dominance of the conventional segment.

The organic segment is anticipated to generate largest revenue of the market during the projected period, due to increasing consumer demand for organic and sustainably sourced products. Organic brewing ingredients are free from synthetic pesticides, fertilizers, and genetically modified organisms (GMOs), appealing to health-conscious consumers and environmentally conscious breweries. The organic certification process ensures transparency and authenticity, driving breweries to adopt organic ingredients to meet consumer expectations for quality, purity, and ethical sourcing practices. For instance,

• In May 2021, Angel Yeast Co. Ltd. announced plans to establish a green manufacturing project for yeast extracts, aiming for an annual output of 15,000 tons.

Form Segment Analysis

Based on form, the brewing ingredients market is segmented into pellets, whole leaf, and extracts. The extracts segment led the market in terms of revenue in 2023, owing to its convenience, ease of storage, and efficient utilization in brewing processes. Brewing extracts, including liquid and dry forms, offer consistent flavor profiles, reduced waste, and enhanced shelf life compared to pellets and whole leaf forms.

The pellets segment is projected to register a robust growth rate during the assessment years, due to the increasing demand for hop pellets among craft breweries and homebrewers. Hop pellets offer brewers high flexibility in flavoring and aroma additions, precise dosing control, and reduced debris in brewing equipment compared to whole leaf hops. Additionally, technological advancements in pelletizing processes, such as cryogenic pelletization, are improving the quality and stability of hop pellets.

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Application Segment Analysis

On the basis of application, the market is divided into commercial brewing, craft brewing, and home brewing. The commercial brewing segment generated a major revenue share of the market in 2023, attributed to the scale of operations, large production volumes, and extensive distribution networks of commercial breweries. These breweries cater to mass consumer markets, supply chain partnerships with distributors and retailers, and leverage economies of scale to maximize profitability.

The craft brewing segment is projected to register a robust growth rate during the assessment years, due to the rising popularity of craft beers among consumers seeking unique flavor experiences, artisanal products, and local brewery experiences. Craft breweries prioritize creativity, innovation, and quality craftsmanship, using diverse brewing enzymes, traditional brewing techniques, and small-batch production to differentiate their offerings.

Distribution Channel Segment Analysis

Based on distribution channel, the brewing ingredients market is segmented into direct sales, distributors, online retail, specialty stores, and others. The direct sales segment led a large share of the market in terms of revenue in 2023, owing to its direct relationship with breweries, efficient supply chain management, and personalized customer service. Direct sales enable breweries to maintain control over pricing, product quality, and delivery timelines, fostering strong partnerships with brewing ingredient suppliers. Additionally, direct sales channels facilitate collaboration, customization, and responsiveness to breweries' specific needs and requirements, driving the segment.

The online retail segment is projected to register a robust growth rate during the assessment years, due to the increasing adoption of e-commerce platforms and digital technologies in the brewing industry. Online retail channels offer breweries and consumers convenience, accessibility, and a wide range of brewing ingredients, equipment, and accessories. Moreover, the COVID-19 pandemic has accelerated the shift toward online shopping and contactless transactions, influencing consumer behavior and purchasing habits.