From Wikipedia:
Alcohol powder is molecular encapsulated alcohol. The powder will produce an alcoholic drink when mixed with water.
According to food chemist Udo Pollmer of the European Institute of Food and Nutrition Sciences in Munich, alcohol can be absorbed in cyclodextrines, a sugar derivate. In this way, encapsuled in small capsules, the fluid can be handled as a powder. The cyclodextrines can absorb an estimated 60 percent of their own weight in alcohol.[1] A US patent has been registered for the process as early as 1974
Thanks.
So my guess was pretty close to the mark. :)