Microbrewery expansions increases citrus alcohol sales

Global demand for citrus alcohol market is set to hover at nearly 5 per cent growth rate, as growing preference for craft beer, and rising alcohol consumption create fertile ground. A recent study by ESOMAR certified market research and consulting firm, Market Research Insights, analysed citrus alcohol growth in over 20 countries, building a holistic and comprehensive analysis of the market.
Increasing inclination among consumers towards craft spirits, owing to their unique and subjective taste is another key factor driving sales. Study opines that proliferating number of breweries across the world will drive demand in the long run.
The COVID-19 impact on the market will create short-term challenges through 2021-end, with steady recovery expected from 2022.
Features include:

  • Spirit will remain the largest selling category, capturing over 50 per cent market share.
  • Glass bottles will hold nearly half of market value, owing to safety and minimal risk of leakage.
  • Based on sales channel, specialty stores accounted for over one-fourth of market value in 2020 and will remain the most lucrative channel.
  • Asia Pacific will remain the largest regional market for citrus alcohol, backed by the presence of a large young population base with high spending on alcoholic beverages.
  • Europe and North America will collectively account for nearly 50 per cent market share, being the largest producers and consumers of alcohol.

COVID-19 Impact
The outbreak of COVID-19 has impacted operations in the food and beverage sector, thus creating a downfall in the volume produced in the first and second quarters of 2020. Moreover, supply-side difficulties such as hindered distribution network and closure of sales channels.
Furthermore, altered consumer priorities during the lockdown and high demand for essential products, while distribution and sales of non-essentials, including alcoholic beverages, have been deprioritized. On the back of these facets, the growth trajectory of the citrus alcohol market will experience fluctuations during the pandemic.

Citrus essential oil demand in F&B growing

 Citrus essential oils market continues to witness widespread adoption in multiple industrial applications, ranging from cosmetics and health care, to food and beverages. Aromatherapy is another application area of citrus essential oils where demand remains significant in light of their effective therapeutic attributes. According to a recent analysis by Fact.MR, the citrus essential oils sales increased by over 3000 tons in 2018 over 2017.

The study opines sales of citrus essential oils manufactured using grapefruits to witness relatively faster momentum, as chemical constituents of grapefruit are sought-after across various industries. Grapefruit-derived citrus essential oil sales are expected to grow 2X faster than their counterparts in 2019. Additionally, health benefits of grapefruit essential oils such as weight loss, improved immunity, and alleviation of stress, has led its adoption among producers of the citrus essential oils in line with increased consumer affinity for such products.

Consumption remains robust in F&B sector
With citrus essential oils labeled as safe for consumption by regulatory authorities, food and beverages industry continue to incorporate these essential oils into multiple products, in line with the upward trend of “clean label.” Over 30 per cent sales of citrus essential oils was accounted by the food industry in 2018. Additionally, there has been a notable rise in use of citrus essential oils in cake frostings, chocolates, and confectionery, in recent years, with numerous companies launching multiple products that feature these oils as green ingredients.

Apart from their health benefits, citrus essential oils also impart taste and flavors to food products, a reason that has substantially augmented the popularity of citrus essential oils in the food industry. Further, its antimicrobial and antifungal properties have opened up new avenues for citrus essential oils in the packaging industry, and as a natural preservative, thereby driving its sales in the F&B sector.

Recent studies have linked citrus essential oils with curing insomnia, anxiety, and its vital role in the prevention of cancer. The recent researches have increased the possibility of citrus essential oils used in aromatherapy which is gradually regaining its vigor around the world. Due to these reasons, the use of citrus essential oils in healthcare products is expected to register a Y-o-Y growth of more than per cent in 2019 over 2018.

Online retail stores to lead citrus essential oils sales
Globalisation and pervasive proliferation of the internet worldwide have streamlined the modern-day trade practices. Following the trend, online retail stores have emerged as fastest growing distribution channel for various consumer as well as industrial goods, and citrus essential oils are no exception. With aggressive marketing campaigns and lucrative discounts, online retailers continue to win over consumers and consolidate their position in the market. The facility of shopping for required goods from the comforts of home has become a pervasive trend among millennials and the aging population alike.

As awareness regarding the use of citrus essential oils grows, their demand will show no signs of abating for industrial as well as household use. The digital medium provides an extended reach to essential oil manufacturers to target consumers in various regions of a specific country or the world. Online retailers sold over 4000 tons of citrus essential oils in 2018, according to the study.

Europe is estimated to remain the largest market for citrus essential oils, despite depreciating value of Euro that has resulted in an upsurge in the cost of citrus essential oils in the region.