According to Vijay Sarathi, lead research analyst at Technavio for food research, “The global malt ingredients market is expected to grow at a steady pace during the forecast period owing to the demand for malt ingredients in the food and beverage sector and increasing consumption of alcoholic beverages.”
Technavio’s lead food and beverage market research analysts have identified the following three factors that will drive the global malt ingredients market:
- Growing demand for malt ingredients in food sector
- Increased popularity of craft beer
- Increasing demand from millennial population
Growing demand for malt ingredients in food sector
Consumer demand for a balanced and fortified diet has triggered food companies to formulate products with good flavor, freshness, and reduced additives, fat, salt, sugar, and cholesterol. Malt ingredients are a natural and good source of flavor, sweetness, color, and humectancy.
The high physiological and nutritional values of malts are based on their easily digested carbohydrates, low sucrose content, vitamins, enzymatically hydrolyzed proteins, minerals, enzymes, and highly distinctive flavor. Malt ingredients are being used in cereals, pretzels, bagels, waffles, crackers, baked food, infant food, imitation coffee, confections, pet food, chocolate-based items, and related products.
Malt is added to infant and adult formulations as nutritional supplements. It is also mixed with hop extracts, vitamins, vegetable fats, medicines, powdered milk, cod liver oil, and various tonics. Thus, the use of malt ingredients in the food sector is driving sales in the market.
Increased popularity of craft beer
Craft beer is generally brewed using traditional ingredients such as malt. Consumers in the US are increasingly moving toward craft beer due to its better taste, brewing techniques, and innovations.
Young consumers are also experimenting with new products and flavors offered by beer manufacturers. Millennials prefer beer; more than a half of the millennial population in the US drinks craft beer. They are also more likely to buy craft beer, knowing that it may help the local economy.
The increase in demand for locally produced alcoholic beverages, such as craft beer in the US and baijiu in China, and a variety of flavors has given rise to several new production sites. For instance, the number of farm-based breweries, wineries, and distilleries in New York, US, alone, increased by almost 72% from 2011-2012. These new manufacturing sites help vendors meet the growing demand for alcoholic drinks in the US. This will naturally boost the demand for malt ingredients.
Increasing demand from millennial population
Millennials are the most sizable generation in the US, representing one-third of the total US population in 2013. Being an educated and diverse demographic, they are more aware of new product offerings. Most millennials are at the beginning years of their careers and will go on to be an influential demographic in the decades to come. Alcoholic beverage companies find that catering to this consumer segment can prove to be beneficial for their profit margins.
Millennials are more likely than the rest of the general population to spend money on premium alcoholic beverage brands. They are also not averse to experimenting with drink types, brands, and flavors. Manufacturers, therefore, strive to understand the tastes and preferences of millennials and target many offerings at this generation.
“Most millennials prefer beer and more than a half of the millennial population in the US drinks craft beer. Thus, with the increased demand for alcoholic beverages from this segment, will boost the demand for malt ingredients,” says Vijay.
Browse Related Reports:
- Global Alcohol Ingredients Market 2016-2020
- Global Alcoholic Drinks Market 2016-2020
- Alcoholic Beverage Market in the US 2016-2020
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