Yeast Market Intelligence

Industry Outlook & Drivers

Yeast Global Market Outlook

The global fresh yeast market is expected grow at a CAGR of 9 percent between 2020 and 2024

Growth in demand is expected to be high in Asia Pacific, especially in China and India, owing to expected rise in demand from processed foods and alcoholic beverage markets in these regions

Molasses Global Production and Price Drivers

EU is the leading yeast producer and nearly 82 percent of the molasses (feedstock) used in the EU are produced domestically. Any change in the global sugar beet or sugarcane price and sugar price will highly influence the price of yeast produced in the EU and other regions

• Molasses, being the by-product of sugar beet and sugar cane, sugar prices also influences molasses prices. For instance, in 2012,, when EU sugar prices increased by 15 percent year-on-year to $ 728.84/MT, molasses prices increased by 6.25 percent year-on-year to $ 165.42/MT
• Yeast prices vary in proportion with beet molasses' prices due to its high utilization. Any increase in the price of molasseswill have an impact on the price of yeast
• Hence, understanding the seasonality of price movement will be helpful in strategic sourcing of yeast Key Takeaway EU is the leading yeast producer and nearly 82 percent of the molasses (feedstock) used in EU are produced domestically. Any change in the global sugar beet or sugarcane price and sugar price will highly influence the price of yeast produced in EU and other regions.

Value Chain Analysis

The yeast used for alcohol fermentation accounts for almost 31 percent in the total end-use applications. However, the share of brewer’s yeast is minimal. A large portion within this category is consumed by other alcoholic beverages such as wine, spirits, etc., and by the industrial alcohol segment.

Fresh Brewer’s Yeast Value Chain Analysis

With the current market potential for growth in the craft beer segment, the yeast industry is likely to witness a shift in the trend of rising alcoholic yeast production at a supplier level in the near future.

Brewer’s Yeast Production: Current Scenario

• Most breweries propagate their own pitching yeast for bulk beer production

• Depending on the strain type and company policy, yeast can be re-used 5 to 15 times, however, some breweries re-use their yeast over 100 times or until fermentation performance significantly declines

• Stock cultures and strains are maintained either in-house or purchased from external suppliers

Outside Yeast Supplier

• Some brewers yeast is also produced by yeast suppliers

• Micro-breweries directly purchase ready to pitch the yeast in dehydrated/liquid form from yeast suppliers for smaller beer volumes

Yeast Strain: Saccharomyces Species

• A yeast strain is a one-time procurement expense for $1000-2000/strain. The cost of strains within the whole production process is nil

• Strains for alcoholic fermentation are comparatively expensive as they are specialized to survive in complex production processes

Yeast Substrate

• Molasses are considered as the most economical substrate for yeast production at an industrial level. A concentration mix of 80:20 of beet to cane molasses respectively is considered ideal for high yields 

• Homebrewers who propagate yeast in-house, use dried malt extract and agar as a solid growth medium

New Trends in Brewer’s Yeast Procurement

• There has been a shift in beer consumption, arising from the increasing popularity of craft beers over traditional beer among consumers. Breweries, in order to reduce the complexity and cost involved in maintaining various yeast cultures and propagating them in-house for small batches of beer, have started procuring ‘ready to pitch’ dry yeast from outside suppliers 

• Some wine and distillers yeast is also being produced at yeast supplier plants nowadays

Cost Structure - Yeast

Increase in the price of molasses, the raw material for fresh yeast production, and energy price cause an increase in total fresh yeast's cost of production, which is generally passed on to the buyers through an increase in yeast prices.

• Beet molasses is the most economical feedstock for fresh yeast production, followed by cane molasses. The substrate concentration mix of 80:20 of beet to cane molasses respectively, is considered ideal for yeast production
• The two highest cost components (raw material and energy), exhibit price volatility and account for 62 percent of the total production cost. The margin for fresh yeast production is 22-25 percent and hence, there is a tendency on the part of fresh yeast producers to pass on the cost increase to the buyers

• Packaging and waste water treatment is termed as post-production cost and these costs constitute a significant 37 percent of the overall cost. Yeast producers price their product above this cost component with a margin of 22 to 25 percent.

Global Enzyme Market Outlook

The global enzymes market size was valued at $ 9.9 billion in 2019 and is projected to expand at a CAGR of 7.1 percent from 2020 to 2027. Increasing demand from industries such as food and beverage, biofuel, animal feed, and home cleaning, is projected to drive market growth. Industrial enzymes are most likely to witness a high growth rate in the next five years, due to the growing demand from the food sectors.

• The global enzymes market size is expected to reach $17.2 billion by 2027, registering a CAGR of 7.1 percent. Industrial enzymes that include enzymes used in detergent manufacturing, food & beverage processing, pharmaceutical industry, etc., occupy major market, in terms of value and volume.

•  Enzymes used in organic synthesis and analytical applications, food analysis,etc. are classified as non-industrial enzymes and these enzymes occupy 40 percent market share in the total enzyme market. Growing demand for sustainable products among consumers and continuous investments by large players in various industries is driving the growth of the industrial enzymes market. However, the uncertain market environment is impacting the industry dynamics at present.

• The global industrial enzymes market is projected to grow at 7 percent between 2017 and 2020, to reach $8.1 billion in 2020. Food and beverage, and household care enzymes are the biggest segments driving the entire industrial enzyme market  

• Bioenergy, however, contributes only 15 percent, and is expected to grow at a faster rate owing to the growth in the usage of bio-ethanol in blending with fossil fuels.

•  Increasing population, focus on yield maximization and reduced use of antibiotics in animals are the major drivers of agriculture and feed enzymes

• The pharmaceutical industry uses a very limited quantity of enzymes compared to food and households.

Geographic Landscape: Yeast Production

Europe is the major producing and consuming region for yeast and yeast products, followed by North America and China. The yeast industry is flourishing and production is further expected to rise owing to the growing demand for brewer’s yeast, probiotic yeast, yeast extracts, etc.

Innovations/Trends

Innovations in the yeast industry are driving the competition between large players. Studies to improve various parameters of yeast and fermentation processes are under progress that is expected to shift the yeast industry to a more customized form.