Beer Adjuncts Market Size, Share & COVID-19 Impact Analysis, By Type (Unmalted Grain [Unmalted Corn, Unmalted Rice, and Others], Sugar, Cassava, Potatoes, and Others), By Form (Dry and Liquid), and Regional Forecast, 2023-2030

The global beer adjuncts market size was valued at USD 56.09 billion in 2022 and is projected to grow from USD 58.60 billion in 2023 to USD 89.06 billion by 2030, exhibiting a CAGR of 6.16% during the forecast period. Asia Pacific dominated the beer adjuncts market with a market share of 45.07% in 2022. Moreover, the beer adjuncts market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 15.99 billion by 2032, driven by high consumption of beer in the region, which is further supported by robust economy, high income, and rising demand for high-quality alcoholic beverages.

Adjuncts, such as malted grains, sugar, cassava, and potatoes, are significantly used in the beer market as brewing ingredients. These adjuncts enhance the characteristics of beer and help reduce the overall production cost. The rising number of small-scale brewers worldwide supports product sales growth. Furthermore, the collaboration of beer adjunct suppliers with brewers and research organizations to develop high-quality raw materials becomes a potential factor in driving product demand. For instance, in September 2021, the Ugandan subsidiary of AB InBev, Nile Breweries Limited, signed a five-year MOU agreement with the National Agricultural Research Organization (NARO) to boost the commercial production of cassava in the country. The increasing research & development and innovation activities to develop new beer formulas using adjuncts will further elevate the market growth in the forecast period.

COVID-19 IMPACT

Closure of Breweries during Pandemic Hindered the Industry Performance

In the initial stage of the COVID-19 crisis, industry players experienced numerous hurdles and challenges in managing sustainable business operations. Due to lockdown and restrictions on large public gatherings, companies reduced employee strength in production plants. To overcome these challenges, producers restructured their strategies to achieve sustainability in business. Strong impact on the brewing industry during the pandemic affected adjuncts demand. According to the Brewers of Europe's report on COVID-19’s impact on the brewing industry, the pandemic was responsible for the decline of nearly 42% of beer volume sales. The net volume sales of beer fell by 9% (34 million hectoliters) in Europe in 2020.

LATEST TRENDS

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Investment in Research & Development to Enhance Beer Flavors Push the Adjunct's Demand to the Next Level

A growing number of beer consumers worldwide seek new products with exotic flavors. However, many other factors are influencing their product choices, including affordability, availability, and lifestyles, which have promoted the popularity of beer consumption. The huge surge for flavored beer products among consumer’s forces companies to develop new products with different flavors. This factor primarily drives the adjuncts’ demand around the forecast period. For instance, in June 2022, Delta Breweries, a Zimbabwean brewing company, launched a new product under its brand “Chibuku”. This new product is brewed from sorghum and infused with banana flavor, which is now available across Zimbabwe and South African markets.

Since global beer consumption is increasing rapidly, manufacturers will face challenges in raw material procurement, especially barley. Thus, industrial researchers are conducting numerous research activities to develop new formulas using various beer adjuncts such as rye, rice, corn, sorghum, and cassava. The research assists microbrewers and craft brewers to run their businesses sustainably and compete with global players. This factor supports the market growth for beer adjuncts.

DRIVING FACTORS

Increasing Breweries and Expanding Beer Production Propel the Adjunct's Demand

The demand for adjuncts is primarily driven by craft brewers and microbrewers, focusing on expanding the product portfolio with innovative flavors. Currently, consumers worldwide are no longer associated with mainstream beers. They are gravitating toward a more craft and artisanal approach. Craft brewers and microbrewers are witnessing ample market potential for beer products worldwide. Therefore, they are investing in R&D and new product launches. The increasing number of craft brewers globally is expected to take the industry to the next level. For instance, in November 2020, DG Yuengling & Son, an American craft brewer, expanded its Tampa campus breweries expansion. The company aims to complete this new project by early 2022. Moreover, according to Brewers Association, beer consumption volume in the U.S. increased by 1.0% in 2021, wherein craft beer consumption holds nearly 13.1%. Total craft beer volume consumption increased by 7.9% to 24,489,945 BBLS (billion barrels).

Increasing Partnerships and Investments to Promote Local Production

The companies are investing in the vertical integration business model to ensure the smooth supply of high-quality raw materials; this is expected to help them to deal with quality issues of raw materials. The global players invest an appropriate amount in strengthening raw material production. For instance, in November 2021, Nigerian Breweries plc, one of the largest brewing companies in Nigeria, invested approximately USD 189 million to promote cassava and sorghum cultivation in the coming five years in Nigeria.

Governments of several countries are developing a national policy to strengthen the brewery sector due to the industry’s contribution to the nation’s GDP, job creation, wealth generation, and value creation for regional farmers. Therefore, the government invites investments from all relevant stakeholders to have a holistic policy for the sector. Thus, supportive government policies will surge the demand for beer adjuncts in the coming years.

RESTRAINING FACTORS 

Technical Challenges and Quality Discrepancies to Hamper Adjunct’s Demand

The products are often used in the brewing industry as an alternative cost-efficient extract source. Cost reduction is one of the decisive factors when using several adjuncts in beer production. Brewers use cheap, locally sourced grains such as sorghum, corn, and rice to replace expensive barley malt. Brewing with unmalted grains and cereal adjuncts, especially at higher concentrations, may impose several technical challenges on the brewers. A higher concentration of unmalted grain adjuncts significantly impacts the functionality and processability of the grist, and thus it impacts the production process and product quality of beer.

The key difficulty in terms of processability when including unmalted grain adjuncts is decreasing the amylolytic, cytolytic, and proteolytic enzymatic activities in the grist, as these enzymes are activated and synthesized during the malting process. These enzymes are important during the malting and mashing process, which influence the chemical composition of wort and the efficiency of brewing extract recovery. Thus, the technical challenges may restrict the consumption of the products.

SEGMENTATION

By Type Analysis

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Easy Availability and High Technical Benefits of Unmalted Grains Propel Segmental Growth 

On the basis of type, the market is classified into unmalted grains, sugar, cassava, potatoes, and others.

Unmalted grains segment is further sub-divided into unmalted corn, unmalted rice, and others. Unmalted grains segment holds a significant share in the global adjuncts market, owing to the wide availability of unmalted grains, including corn and rice. Unmalted grains, mainly corn, are typically used in brewing beer across North America and Europe. Unmalted corn contains beneficial yeast carbohydrates, which boost the quality of wort and beer; thus, it is majorly used as an adjunct in the brewing process. Unmalted grains also help to improve the levels of bioactive compounds and give new organoleptic characteristics to the beer. It is available abundantly at a lesser price; hence, it helps the brewers in reducing the overall production cost.

The potato segment is likely to witness considerable growth in the coming years as it has a high carbohydrate concentration; therefore, it has great potential in the brewing industry as an adjunct. It is also a source of β-amylases, which is more stable than β-amylases from barley. Several industrial studies recommended that sweet potato flour has high diastatic power and can be used to replace sorghum malt in brewing. It is one of the factors to increase the segmental demand in the coming years.

By Form Analysis

Convenience and Long Shelf Life Increase the Usage of Dry Adjuncts 

Based on form, the market is categorized into dry and liquid.

The dry segment holds the largest market share, and its demand is primarily driven by the abundant availability, convenient storage, and longer shelf life. Dry adjuncts, such as flaked corn, rice, wheat, or sorghum, are more affordable than liquid adjuncts and have significant shelf life compared to liquid beer adjuncts. In addition, solid adjuncts play a critical role in refining the beer. It improves the texture, color, and mouth feel of alcoholic beverages. Thus, it is significantly used in developing innovative products.

Liquid adjuncts, such as liquid syrups, maize, and rice syrups, are tremendously used in brewing beer. They provide premium quality and ease of use during brewing and majorly decrease labor and transportation costs.

REGIONAL INSIGHTS

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The market is analyzed across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

Asia Pacific holds the leading position in the global market share. Increasing microbrewers and craft beer manufacturers push the market growth. Thus, the market is likely to witness rapid growth at a CAGR of 7.19% during the forecast period. The Asian manufacturers are keenly investing in manufacturing rice-based beers, as Asia is one of the largest rice producers, which further paves the way for the global beer adjuncts market growth. For instance, in May 2022, Ecliptic Brewing, a Japanese company, launched two new ranges of rice lagers with floral notes of jasmine.

North America has emerged as one of the largest beer consumers in the global market, supported by the robust economy, increased income, and customer associations. Various beer adjuncts such as corn grits, rice, barley, liquid adjuncts, syrups, and sugars, and processed adjuncts, including cereal flakes or fortified cereals, are conventionally used in the U.S. brewing industry. Corn grits are primarily produced in the U.S., and thus they are the most commonly used adjuncts in mass-market beer, owing to their cost-effective quality, low extract residue, color, flavor, and smoothness-enhancing properties. The growing adoption of different cultures is influencing researchers to invest in several brewing innovations in microbreweries, such as craft beers and artisanal beers, thereby shaping the overall growth of the market to a higher extent.

The Europe beer adjuncts market growth is very progressive. Poland, France, and Spain contribute significant revenue to the beer adjuncts industry, attributed to the increased market entrants. Furthermore, regional brewers introducing new products using locally grown raw materials push the industry growth. In February 2020, Cruzcampo, one of the leading Spanish brands, launched its range of fruit ale, “Mangos de Malaga” at a brewery in Malaga. This new beer launch aims to promote the use of local ingredients, which will further cater to the evolving needs of manufacturers. The product is enriched with fruity notes of mango or citrus and caramelized malts.

The developing countries in South America and the Middle Eastern regions are also incorporating different adjuncts such as sorghum and buckwheat malt for preparing beers, which, in turn, has increased the demand for the product across the globe.

KEY INDUSTRY PLAYERS

Focusing on Novel Product Launches to Help Companies Expand their Product Lines

Prominent players operating in the market have realized the growth potential of this market and are making continuous efforts to innovate, launch new products, and enhance their beer adjuncts products in the market to establish their prominence. The leading companies, such as Anheuser-Busch InBev SA/NV, Carlsberg Breweries A/S, and Heineken N.V., are embarking on expanding their product portfolio with the acquisition of small & medium-sized companies. The brewers focus on R&D and innovation activities to develop new formulas using adjuncts. It creates opportunities for the adjuncts manufacturers, including Thomas Fawcett Sons Ltd, to maintain appropriate supply. The key players utilize their huge clientele base, unique product offerings, strong brand loyalty, and distribution network to increase their geographical footprint while focusing on achieving a competitive edge.

LIST OF KEY COMPANIES PROFILED:

• Tsingtao Brewery Co., Ltd. (China)


• Molson Coors Brewing Company (U.S.)


• Kirin Holdings Company, Limited (Japan)


• Heineken N.V. (Netherlands)


• Constellation Brands Inc. (U.S.)


• China Resources Beer (Holdings) Company Limited (China)


• Cervejaria Petropolis S/A (Brazil)


• Carlsberg Breweries A/S (Denmark)


• Anheuser-Busch InBev SA/NV (Belgium)


• Asahi Group Holdings Ltd (Japan)

KEY INDUSTRY DEVELOPMENTS:

• September 2022: U.S.-based company the Alchemist Brewery and India-based company BLR Brewing Co. came together to brew Cold IPA, a style that has never been brewed before in India. Cold IPA at Alchemy has been brewed with Maize and Jaggery as adjuncts and hopped with simultaneous doses of Simcoe and Citra.


• June 2022: One of the leading African brewing companies, Zambian Breweries PLC, announced an investment of USD 80 million in Zimbabwe to expand its current production plant.


• March 2022: Athletic Brewing Company, a U.S.-based brewing company, launched a new product, “Athletic Lite” in the U.S. market, and is targeted at health-conscious beer drinkers. The newly launched product is produced from organic and non-GMO grains infused with spices and citrus fruits for an exotic flavor. This beer is also vegan-friendly and contains less than 0.5% of ABV.


• March 2022: Drifters Breweries, an Indian brewing company, launched a new product on the occasion of the Indian Premier League (IPL) 2022. The new “LBW Lager Beer” is made from bajra (Pearl Millet) and rice. This product is available across India through online and offline stores.


• October 2021: U.K.-based company, Neitiva, launched three beer products made from coconut flowers. The newly launched products “NINKASI”, “MENQUET”, and “DEA LATI” are manufactured from malted barley, oats, hops, and water. The product is also infused with coconut flower drops to enhance its flavor and taste.

REPORT COVERAGE

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The market research report includes quantitative and qualitative insights into the market. This market intelligence report also offers a detailed regional analysis of the market size, regional market share, and growth rate for all possible market segments. The report provides various key insights on the market, an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

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