Latin America Barley Market: Impact of COVID-19 on Market Dynamics and Future Outlook

Latin America Barley Market: Impact of COVID-19 on Market Dynamics and Future Outlook

The Latin America barley market represents an essential raw material for industries such as food and animal feed. Barley is primarily used as an ingredient in beer production, accounting for over 70% of global barley consumption. The grain offers desirable qualities like enzymes that degrade starch into fermentable sugars during the mashing process. Some key advantages of barley include high mineral content, soluble and insoluble fiber helping support digestive health. The increasing consumer preference for craft beer made from natural ingredients is driving barley demand considerably.

The Global Latin America Barley Market is estimated to be valued at US$ 3.44 Bn in 2024 and is expected to exhibit a CAGR of 3.5% over the forecast period 2023 to 2030.

Key Takeaways

Key players operating in the Latin America barley are Grain crop Limited, Malteurop Group, Soufflet Group, Crisp Malting Group, Global Malt Gmbh & Co. Kg, Ireks Gmbh, Muntons Plc, Maltexco S.A., Grain Millers, Inc, EverGrain, Malt Products Corporation, and Briess Malt & Ingredients Co. These major players are focusing on capacity expansion plans and new product launches to leverage growth opportunities.

The growing consumption of craft beer in the region has boosted barley demand significantly. Countries like Brazil, Argentina, and Chile have witnessed double digit growth in craft beer sales in recent years. Additionally, changing consumer preferences towards healthy food products has augmented the demand for barley flour and barley tea extracts.

Leading players are investing in advanced malting technologies to produce specialized barley varieties with enhanced enzyme activity. New techniques help craft unique beer flavors through precise control over germination and kilning processes. This has allowed development of novel product categories.

Market Trends

Two wheel usage is on rise in Latin America cities driven by concerns over congestion and pollution. E-bikes and e-scooters provide a convenient alternative to private vehicles and public transit. This has incentivized local administrations to invest in cycling infrastructure expansion.

Growing health awareness among consumers has boosted demand for low glycemic, gluten-free alternatives. Companies are leveraging this opportunity by introducing protein-rich barley variants for food and beverage applications.

Market Opportunities

Rising adoption of plant-based diets and veganism across Latin America creates scope for barley-based meat substitutes. Protein-rich barley possess nutritional credentials for developing meat analogs through precision fermentation.

The untapped emerging craft brewery markets in Central and South America offer significant growth potential. Local producers arewell positioned to cater niche specialty beers utilizing diverse barley strains suitable for the regions variedclimatic conditions.

In summary, the Latin America barley market is driven by thriving beverage and food industries along with growing consumer preference for sustainable products. Ongoing technological advancements will allow barley to penetrate new applications over the coming years.

Impact of COVID-19 on Latin America Barley Market Growth

The COVID-19 pandemic has significantly impacted the growth of the Latin America barley market. During the initial lockdown phases in 2020, both production and supply chains were severely disrupted. Farmers faced difficulties in sourcing inputs and harvesting products on time due to restrictions on movement. This led to a decline in barley cultivation across countries like Brazil, Argentina and Chile which are major producers in the region.

On the demand side, closure of hotels, restaurants and bars due to lockdowns reduced beer consumption substantially. Since barley is a key raw material in brewing, its demand from the beverage sector dropped sharply. The processing and malting industry also came to a standstill as plants were either closed or operated at low capacities to maintain social distancing norms. Exports of malt and barley fell steeply during this period.

However, with gradual lifting of lockdowns and resumption of economic activities from late 2020, the market is recovering. Farmers are regaining momentum and increasing area under barley cultivation. Though demand from the on-trade channel remains low, offtake from retail outlets is picking up to make up for lost volumes. Malting companies are operating at higher utilization levels now. The market is forecast to grow at a steady pace in the coming years, supported by growing beer consumption in the region along with initiatives to boost barley production. However, the threat of subsequent COVID waves remains a key challenge.

In terms of geographical concentration, the barley market in Brazil accounts for around 45% of the total Latin American market value currently estimated at US$ 3.44 billion for 2024. As the largest producer and consumer, Brazil dominates barley cultivation as well as processing for malt and beer manufacture across the region.

The fastest growing market for barley in Latin America is expected to be Chile over the forecast period of 2023-2030. Beer consumption in Chile has been increasing at a healthy CAGR of over 4% during the past 5 years. Furthermore, Chilean farmers are diversifying into barley owing to attractive government incentives and higher yielding varieties. This has pushed up barley output in the country significantly higher than Latin American average growth in recent years. Going forward, conducive government policies promoting barley and steady expansion of the brewing industry will drive Chile's barley sector at a faster rate than other regional markets.