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Extra Neutral Alcohol (ENA) Market Outlook from 2024 to 2034

The global extra neutral alcohol (ENA) market size is estimated to reach USD 10 billion in 2024 and USD 18.1 billion by 2034. Sales are projected to rise at a CAGR of 6.1% over the forecast period between 2024 and 2034. The revenue generated by the sales of extra neutral alcohol (ENA) in 2023 was USD 9.4 billion.

Extra neutral alcohol (ENA) holds precedence in potable alcohol varieties. Gins, aperitifs, rums, liqueurs, vodkas, and others are blended and produced with 96.4% pure ethanol, popularly called ENA, by the liquor industry. Accelerating consumption of liquor across the globe is giving impetus to players to intensify their efforts in new alcohol varieties.

Global Extra Neutral Alcohol (ENA) Industry Assessment

Attributes Description
Historical Size, 2023 USD 9.4 billion
Estimated Size, 2024 USD 10 billion
Projected Size, 2034 USD 18.1 billion
Value-based CAGR (2024 to 2034) 6.1%

ENA is further being used as a food-grade solvent in the processing of confectionery, chocolate, and other food products. ENA diffuses flavors and colorants effectively as a food-grade solvent. Spirits division of leading players is seeking entry into potential landscapes, like India, which has significant scope for rapid growth.

Growing concerns over the environment are prompting the Indian government to commit to projects that support a greener and sustainable energy future.

For example, the Government of India introduced 20% ethanol-blended petrol in the country in 2023 to promote eco-friendly and sustainable fuels. This development is a key step toward limiting greenhouse gas emissions and reducing the country’s dependence on fossil fuels.

ENA is also being used in multiple personal care items like lotions, shampoos, hairsprays, deodorants, and perfumes due to its preservative capabilities and antibacterial properties. The product is also used as a potent carrier of fragrance and flavor.

Players are applying state-of-the-art technology to ascertain their product offering is of the purest quality and meets the required specifications for use in the manufacturing of pharmaceuticals. Participants are also meeting the exacting standards of top personal hygiene products producers.

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Key Industry Highlights

Demand for Sustainability is Adding Another Layer to the Industry

The sustainable and organic extra-neutral alcohol sector is ripe for growth, offering opportunities for incremental revenue gains. By disposition, eco-conscious consumers are seeking products with minimal environmental impact.

ENA producers are thus capitalizing on this spotted pattern by underscoring ethically sourced and organic grains as well as sustainable production methods.

Players are targeting health-conscious consumers who view organic ENA as a purer option. They are positioning their products for premium spirit brands looking out for sustainable advantage. Participants are also serving the surging demand for organic cocktails in the thriving bar scene.

Pharmaceutical Applications to Increasingly Deploy ENA

The rising integration of extra neutral alcohol in pharmaceutical applications is appreciating the market’s value. In the pharmaceutical sector, ENA is used for the production of drugs, antiseptics, and vaccinations.

ENA plays a critical role in pharmaceutical manufacturing. The high purity and exceptional neutrality of ENA, make it a preferred choice to blend with different active pharmaceutical ingredients (APIs).

The use of ENA ascertains consistency in quality, thus guaranteeing the safety and efficacy of antiseptics, medications, and sanitizers. Additionally, ENA’s contribution to maintaining strict regulatory compliance within the pharmaceutical sector and its indispensability in vaccine production underline its role in industry growth.

Growing cleanliness and hygiene concerns have become paramount. To safeguard themselves from infectious diseases, communities use sanitization products to protect themselves. This will likely open growth windows for players.

Growth in Cosmetics Sector to Spur ENA’s Demand

Sales of extra neutral alcohol solutions are forecast to rise significantly in the cosmetics sector. Several products, like lotions, makeup, creams, and perfumes, use ENA in their formulation, which is driving its demand. Since consumers are placing significant emphasis on grooming and skincare, the industry players are developing top-notch cosmetics.

2019 to 2023 Global Extra Neutral Alcohol (ENA) Sales Analysis Compared to Demand Forecast from 2024 to 2034

The extra neutral alcohol demand in the historical period reached USD 9.4 billion in 2023. Through the entire historical period, i.e., 2019 to 2023, the industry recorded a 7.6% CAGR. Demand for ENA is significantly high in alcoholic beverages, like gin, vodka, and liqueurs. All these spirits rely on ENA as their base. The rising consumption of spirits has a direct influence on ENA sales.

There have been continuous sales of alcoholic beverages in the historical period, except for the pandemic period, which suspended most of the economic activities. Further, craft distillers that focus on high-quality ingredients have created a niche market for premium ENA.

To effectively respond to growing premium ENA demand, producers are using distinct fermentation methods, to serve this segment. To support the industry’s revenue, ENA wasn’t restricted to only spirits. ENA has been in use in pharmaceuticals and cosmetics. The growth of these sectors has also supported new applications for ENA.

Over the forecast period, ENA sales are projected to surge at a CAGR of 6.1%. By the end of 2034, the industry is anticipated to reach USD 18.1 billion. Increasing investments in research and development activities that lead to breakthroughs are expected to push the industry's growth.

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Nandini Roy Choudhury

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Market Concentration

Top-tier companies, with presence distributed across the globe, are leveraging their large production base to negotiate favorable deals on raw materials and drop production costs. Moreover, they are seen investing in cutting-edge technology to seamlessly operate and optimize output levels.

Firms in this tier 1 are establishing robust supply chains, enabling them to effectively distribute ENA to many landscapes and demonstrate agility toward regional fluctuations in demand. These players already enjoy strong brand recognition. They are establishing relationships with leading beverage producers.

On the back of the aforementioned dynamics, players are securing long-term agreements and influencing consumer choices in favor of their specific ENA offerings.

Further, growing awareness about the importance of environmental responsibility is influencing the players’ decisions. Participants are nowadays taking into consideration environmental sustainability in extra neutral alcohol production.

Tier 2 companies, those with regional presence, recognize that their efforts at competing with top international players are likely to go in vain. So, their strategies reflect a practical approach to identifying the pulse of the regional market and responding to certain regional tastes or cultural likings for ENA within their capacity.

Players are thus introducing distinct flavor profiles, deploying fermentation techniques popular in the region, or simply using local ingredients. Regional players have the advantage of quickly adapting to emerging trends or experimenting with the latest ENA applications. Players are introducing flavored vodkas to attract younger consumers.

Regional players have been commonly seen to build stronger bonds with regional bars, distributors, and liquor stores. Further, they are optimizing their operations to bring down their costs and remain competitive in front of larger brands. Strategic partnerships are also being employed by players to widen their distribution or enhance their offerings.

Comparative View of Adjacent Industries

This section dives deep into peer markets that give a comparative view of the studied industry. Two key markets included in the section include the India alcohol industry and the alcohol ingredient industry. By presenting an analysis, encompassing drivers, trends, and opportunities, business prospects are observed for lucrative growth.

India Alcohol Industry Assessment:

Alcohol consumption is on the rise in India, which is positively impacting the India alcohol industry. Further, health has become a key component, which is why people are seeking alcohol-free or low-alcohol options to keep themselves in ideal shape.

Mixology and cocktails are gaining widespread popularity in the nation, with an emphasis on creative and distinct drink experiences. The rising GenZ and millennial population is predicted to raise the alcohol demand in India. Another key sales determiner is rising home delivery services and online sales, which are offering superior convenience to consumers.

Changes in the production and packaging of alcoholic beverages are reflecting present eco-consciousness and environmental concerns. Moreover, the extensive variety of indigenous and regional alcoholic drinks symbolizes the diverse Indian cultural heritage.

Another pattern that has emerged is that customers are embracing a more relaxed and sophisticated approach to socializing, seeking quality over quantity. The thriving canned alcoholic beverages sector is also enhancing the alcohol industry's share. Brands are also using digital platforms for engagement, marketing, and virtual events to engage with consumers.

Attributes Description
Related Industry India Alcohol Industry
CAGR (2024 to 2034) 7.2%
Growth Factor Growing demand for high-quality alcoholic beverages is spurring sales of alcoholic drinks in India.
Key Trend Small-batch production and the popularity of artisanal drinks are influencing the alcoholic drink sector.
Opportunity The rise of wine tourism, variously called enotourism and vinitourism, is expected to create growth opportunities for alcohol brands.

Alcohol Ingredient Industry Assessment:

Alcohol pops in first in the head, when entertainment is considered. Alcohol is increasingly being consumed among Gen Z and millennials. Asia Pacific holds prominence in the alcohol industry.

The wide population base and popularity of craft beer are steering the market forward. Japan is a key regional market. The popularity of Sochu, a distilled alcoholic beverage made of barley, buckwheat, rice, and others, in South Korea, is fueling regional growth.

Players of alcohol ingredients in Europe and North America are following new strategies like the development of the latest technologies to expedite alcohol manufacturing. Further, they are investing their profits in inventions. Surging demand for alcohol as a fix for low mood is also a key growth factor. Areas like premiumization and convenience are also being explored for growth.

Attributes Description
Related Industry Alcohol Ingredient Industry
CAGR (2024 to 2034) 5.8%
Growth Factor Alcoholic beverages are called out to celebrate merry events in life, which is raising the demand for alcohol ingredients.
Key Trend Microbreweries as well as rising intrigue for experiential alcohol drinking are impacting the trends.
Opportunity Ready-to-drink alcoholic drinks are being increasingly considered by working professionals who have time constraints.

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Country-wise Insights

In the given section, countries’ analyses are preceded by projected values presented in the tabular format. The use of ENA is gradually reducing in the forecast period in developed markets like the United States and the United Kingdom. Here, factors impacting the growth include increasing maturity.

Emerging countries demonstrate a contrasting sales trend. Japan, China, and South Korea are expanding at a comparatively higher rate. The growing consumer base, especially the millennial population, which is seeking innovative alcoholic beverages, is prompting significant ENA sales. Other sectors, like pharmaceuticals, beverages, personal care, and cosmetics, are all experiencing rising demand for ENA.

Countries CAGR 2024 to 2034
United States 6.4%
United Kingdom 7.3%
China 6.8%
Japan 7.8%
South Korea 8.2%

Massive ENA Consumption and Production Defines the United States

Sales of extra neutral alcohol (ENA) in the United States are projected to increase at a CAGR of 6.4% from 2024 to 2034. Further, the sector is anticipated to reach USD 3.2 billion by 2034, adopting a leading position globally.

Demand for ENA is rising on account of the surging alcoholic beverage sector. Consistently rising consumer demand for liquors, spirits, and craft beers is pushing the sector’s growth.

Shifting perceptions of people toward drinking, along with the consumption of alcohol as a socially acceptable practice has led to rising sales of ENA. The product is further used in applications related to fragrances and flavors.

The cosmetic sector is another application segment of ENA. Rapid growth in the cosmetic sector of the United States, with many new brands making their space, is spurring the demand for extra neutral alcohol.

Players in China are Capitalizing on Demographic Trends to Boost Their Sales

In China, the extra neutral alcohol market is set to expand steadily at a 6.8% CAGR over the forecast period. The industry is projected to be valued at USD 2.8 billion by 2034. Rising consumption of alcoholic beverages, including liquors, spirits, and alcohol-based products, is bolstering the product’s sales.

Other key sales determiners are expanding population, rising income levels, and altering consumption patterns. These are making China a lucrative sector for businesses. Companies are looking for expansion in these dynamic and evolving markets by critically understanding and capitalizing on the aforementioned demographic trends.

In the historical period, Diageo PLC invested USD 75 million to establish a distillery to manufacture its inaugural Chinese single-malt whisky in the Asian whisky market. Further, the increasing popularity of experimental alcoholic beverages is supporting the sales of extra neutral alcohol.

New developments, like acquisitions, mergers, product launches, and investments, are predicted to offer promising prospects for players in the broader spirits industry. The growing importance of ENA in the production of cleaner fuels is enhancing product sales. Shift toward cleaner energy sources and lowered environmental impact are key growth factors.

Booming Korea’s Beauty Sector is Underpinning ENA Sales

South Korea is set to record a CAGR of 8.2% during the forecast period, totaling USD 1.2 billion by 2034. Several factors are propelling growth of extra neutral alcohol sector in the country.

The budding bar scene in the nation, as well as growing interest in cocktails, is driving applications of ENA as a base spirit. Bartenders use ENA to create new and distinct drinks, meeting consumer demand and contributing to the country’s cocktail culture.

South Korea’s cosmetics sector is world-renowned for its high-quality and effective products. This influential sector is setting trends across the globe, with South Korean products penetrating new geographies. ENA plays a crucial role in the formulation of several cosmetics and beauty products, fueling the sector’s expansion.

Category-wise Insights

In the following section, segments mentioned in the research report on extra neutral alcohol market are deeply analyzed. Grain-based raw material and potable alcohol have emerged as the top segments, after the analyses. Grain-based raw materials drive home 70% of the global share, whereas the application of ENA in potable alcohol stands at 32% as of 2023.

Ready Fermentability of Grain-based Raw Materials Has Been Crucial in its Precedence

Segment Grain-based (Raw Material)
Value Share (2023) 70%

Grain-based raw materials for ENA take the lead. Their use is increasing due to their ready availability and fermentability via yeast. The most common grain-based raw materials used are rye, wheat, and corn. Grains offer a substantial source of fermentable sugars, making the alcohol production process cost-effective and efficient.

The grain-based segment accounted for a value share of 70% in 2023. For the next ten years, a CAGR of 5.8% has been assigned for the same segment.

ENA’s Cleaner Taste Profile Increases its Use in Potable Alcohol

Segment Potable Alcohol (Application)
Value Share (2023) 32%

Potable alcohol amasses a significant portion of extra neutral alcohol market. ENA is extensively used in liquors as it easily controls beverages’ final taste by incorporating specific botanicals or flavorings without the impact of the base material. ENA is valued as it helps ensure consistency and predictability of the final product for consumers.

ENA offers a smoother and cleaner taste, as it does not retain the characteristics of the fermentation process. This, along with surging consumer preference for neutral-tasting spirits that can be easily mixed with cocktails, is increasing the use of ENA in potable alcohols.

Players are also focusing on technological advancements to make extra neutral alcohol distillation and purification easier. This is going to boost its use in potable alcohol.

Competition Outlook

ENA key players are increasing their efforts in the development of high-quality, differentiated ENA. For this, they are including certain grains and employing specific fermentation processes. The market for these creations is niche, with people willing to pay a premium for unique alcoholic concoctions gradually increasing.

Besides spirits, players are also exploring applications in the pharmaceutical and cosmetics sectors. This initiative is cropping up new markets for ENA producers as ENA is being used in various products. Further, firms are consistently searching for ways to enhance their production processes to improve their yields and curtail costs.

For cost-cutting, participants are also optimizing existing operations and investing in new technologies. Moreover, certain companies are expanding via strategic acquisitions, giving them access to new resources, technologies, and geographies.

Industry Updates

  • In October 2023, the GST Council of India approved extra neutral alcohol to be exempted from Goods and Services Tax (GST). According to the report, both molasses-based and grain-based ENA have been taken for exemption from GST. ENA is further exempted from VAT when supplied for industrial purposes.
  • In November 2023, Jagatjit Industries announced that it would be extending its premium offering with the introduction of Royal Pride Whisky. The company’s executive revealed that Delhi has been the launch pad for the offerings, where it will be sold via retail outlets and fine dining establishments throughout India’s capital. From here, the company will pick up expansion projects to spread throughout the country. The company has diverse business verticals and distillery operations to produce Extra Neutral Alcohol employed in alcoholic drinks.

Key Players of Extra Neutral Alcohol (ENA) Industry

  • Illovo Sugar Limited
  • NCP Alcohols (Pty) Ltd
  • USA Distillers LLC
  • Agro Chemical and Food Company Limited
  • Sasol Solvents (Pty) Ltd
  • Mumias Sugar Company Limited
  • Swift Chemicals Ltd
  • Tag Solvent Products Pvt Ltd
  • Enterprise Ethanol (Pty) Ltd
  • BCL Industries Ltd
  • Radico Khaitan Limited
  • Others

Key Segments of Extra Neutral Alcohol (ENA) Market

By Raw Material:

The extra neutral alcohol (ENA) market segmentation, based on raw material, is divided into grain-based, sugarcane-based, and others.

By Type:

The industry is categorized into type I and type II.

By Application:

Different applications of extra neutral alcohol include beverages, potable alcohol, flavors and fragrances, pharmaceuticals, cosmetics and personal care, and others.

By Region:

Trends in regional extra neutral alcohol markets include North America, Latin America, Europe, East Asia, South Asia, Middle East and Africa (MEA), and Oceania.

Frequently Asked Questions

How big is the ENA market?

The present market valuation is USD 10 billion in 2024.

What is the estimated valuation of extra neutral alcohol (ENA) market?

The global ENA market is estimated to reach USD 18.1 billion by 2034.

What is the Growth Potential of the Global Extra Neutral Alcohol Industry?

The target industry is forecast to expand at a 6.1% CAGR through 2034.

What is the scope of the ENA sector in the United States?

The United States market is projected to amass a valuation of USD 3.2 billion by 2034.

What is the estimated adoption rate of ENA in South Korea?

The adoption rate of ENA in South Korea is predicted to be 8.2%.

Table of Content

1. Executive Summary

2. Industry Introduction, including Taxonomy and Market Definition

3. Market Trends and Success Factors, including Macro-economic Factors, Market Dynamics, and Recent Industry Developments

4. Global Market Demand Analysis 2019 to 2023 and Forecast 2024 to 2034, including Historical Analysis and Future Projections

5. Pricing Analysis

6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034

    6.1. Raw Material

    6.2. Type

    6.3. Application

7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Raw Material

    7.1. Grain-Based

    7.2. Sugarcane-Based

    7.3. Others

8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Type

    8.1. Type I

    8.2. Type II

9. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Application

    9.1. Potable Alcohol

    9.2. Distilled Alcoholic Beverages

    9.3. Compound Alcoholic Beverages

    9.4. Flavors and Fragrances

    9.5. Pharmaceuticals

    9.6. Cosmetics and Personal Care

    9.7. Others

10. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region

    10.1. North America

    10.2. Latin America

    10.3. Western Europe

    10.4. South Asia

    10.5. East Asia

    10.6. Eastern Europe

    10.7. Middle East & Africa

11. North America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

12. Latin America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

13. Western Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

14. South Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

15. East Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

16. Eastern Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

17. Middle East & Africa Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries

18. Sales Forecast 2024 to 2034 by Raw Material, Type, and Application for 30 Countries

19. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard

20. Company Profile

    20.1. Illovo Sugar Limited

    20.2. NCP Alcohols (Pty) Ltd

    20.3. USA Distillers LLC

    20.4. Agro Chemical and Food Company Limited

    20.5. Sasol Solvents (Pty) Ltd

    20.6. Mumias Sugar Company Limited

    20.7. Swift Chemicals Ltd

    20.8. Tag Solvent Products Pvt Ltd

    20.9. Enterprise Ethanol (Pty) Ltd

    20.10. BCL Industries Ltd

    20.11. Radico Khaitan Limited

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