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Overview of the Fermentation Industry

Fermentation is a chemical process through which an organism can convert carbohydrates into acid or alcohol. Fermentation is used in various products of the food & beverage, pharmaceutical, and bio-chemical industries. Industrial fermentation is the controlled use of microorganisms such as yeast, bacteria, or fungi to produce a desired product, typically on a large scale. Industrial fermentation is most commonly used in the alcoholic beverage segment. The alcohol fermentation industry in India is rapidly growing, driven by increasing consumer demand for beer, wine, and spirits. There are a large number of distilleries, breweries, and maltings that produce a wide range of alcoholic beverages in the country.

Acts and Regulations Applicable to the Fermentation Industry

  • Excise Law of the State
  • Factories Act
  • Environmental (Protection) Rules, 1986
  • Food Safety and Standards Act, 2006
  • Bottling Rules of the respective State
  • Brewery Rules of the respective State

Modes of Fermentation

In India, the fermentation industry produces beverages primarily based on three methods. These methods are called Distillation, Malting and Brewing.

Distillation in the Fermentation Industry: A distilled alcohol beverage is made by fermenting a mixture of grains, fruits, or sugar and then heating the mixture to separate and purify the alcohol through distillation. The resulting product is a concentrated form of alcohol that is used to make a wide range of spirits, including whiskey, rum, brandy, gin, tequila, and vodka. The specific ingredients, methods, and techniques used in the production of distilled alcohol vary depending on the type of spirit being produced. Currently, distilled alcohol is valued at 34.47 billion dollar industry and is expected to grow at the rate of 5.18% (CAGR 2023-2027)

Malting in Fermentation Industry: The malting process involves soaking the grains in water to allow them to germinate and then drying and kilning the germinated grains to stop the germination process. The kilned grains, also known as malt, are then used as the primary ingredient in beer brewing or as a component in whiskey production. Malted grains provide the sugars necessary for fermentation, and the kilning process also contributes to the flavour and aroma of the final product.

Brewing in the Fermentation Industry: Brewing is the process through which beer is produced. Various grains, such as corn, barley, rye, rice etc., are used to ferment with water and yeast. The different types of grains and production process result in different beer types. The reports suggest the Beer market grows annually by 8.17% (CAGR 2023-2027), thus making it the most profitable alcoholic product.

Process of Industrial Fermentation

The following steps are followed by Fermentation industries in India for the production of their beverages:

The process of industrial fermentation for the production of alcohol typically involves the following steps:

  • Microorganisms: The type of microorganisms used in the fermentation process depends on the desired end product. For example, yeast is commonly used for producing beer and wine, while bacteria are used for producing certain types of spirits.
  • Fermentation medium: The fermentation medium is a mixture of nutrients and water that provides the necessary conditions for the microorganisms to grow and produce the desired product. The composition of the fermentation medium depends on the specific requirements of the microorganisms and the end product.
  • Sterilization: The fermentation medium is sterilized to prevent contamination by unwanted microorganisms. This is typically done by heating the medium to a high temperature or using chemical sterilant.
  • Inoculation: The selected microorganisms are introduced into the sterilized fermentation medium, typically in the form of a starter culture.
  • Fermentation: The microorganisms grow and multiply in the fermentation medium, producing the desired product through a series of metabolic reactions. The temperature, pH, and oxygen levels are carefully controlled to optimize the fermentation process.
  • Harvesting: Once the fermentation is complete, the product is harvested and separated from the fermentation medium. This typically involves filtering or centrifuging the mixture to remove the cells and other solid components.
  • Purification and Concentration: The product is purified and concentrated, typically through distillation or other separation techniques. This process removes impurities and increases the concentration of the beverage.
  • Ageing and Bottling: In the case of alcoholic beverages, the product may be aged in barrels to develop its flavour and aroma and then bottled for sale.

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Documents required for Setting up a Fermentation Unit

General Documents

  • Application in the prescribed format
  • Project Report along with flow chart
  • Three copies of the blueprint of the plant
  • Land Documents
  • List of directors and partners
  • Undertaking as per the Excise rule of the state
  • PAN from the IT department
  • MOA and AOA
  • Utility bills (electricity and water)

Certificates Required

  • Clearance certificate from State police
  • GST Registration Certificate
  • NOC from Labour Department
  • NOC issued by the Inspector of Factories and boilers
  • NOC from State Pollution Control Board/ Central Pollution Control Board
  • NOC from CGWA (for groundwater abstraction)
  • Quality Certificate from Government-Approved Labs

Licenses Required

  • FSSAI license
  • Liquor Distribution License
  • Shop and Establishment License
  • Factory License
  • Trade mark License
  • Health and Trade License
  • Fire Safety License
  • L-3 License for Distilleries
  • L-10 License for Breweries

Frequently Asked Questions

The fermentation business refers to the production of fermented products, such as food and beverages, through the process of fermentation. Fermentation is the metabolic process in which microorganisms such as yeast and bacteria convert sugars and starches into alcohol, acids, or gases.

Alcoholic beverages produced through fermentation include beer, wine, spirits, vodka and other alcoholic drinks.

The regulations for starting an Alcohol Fermentation Business in India vary depending on the type of alcoholic beverage produced and the state where the business is located. However, a few common regulations include obtaining a license from the Excise Department, pollution board clearance and FSSAI license.

There are three major types of the Fermentation process for alcohol in India. These are the Distillation, Brewing and Malting. The fermentation mode varies depending on the type of alcohol.

The major concerns regarding the fermentation industry for an entrepreneur will be high excise duties, a large number of permits and approvals, difficulty obtaining raw materials and high competition.

The applicant has to obtain L- 3 licenses for setting up a brewery and L-10 licenses for opening an alcohol distillery.

Alcohol fermentation begins with the consumption of sugar by yeast or bacteria. The yeast or bacteria then break down the sugar molecules through a series of metabolic reactions, producing alcohol and carbon dioxide as by-products.

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