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Strategy Briefing

The Sugar Backlash and its Effects on Global Consumer Markets

84 pages, Nov 2014

US$1,325

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About This Report

New Report Guarantee

If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

Added sugars – in particular fructose - in processed food and drinks play a key part in the growing problems of obesity, diabetes and tooth decay. Consumer demand is forcing manufacturers to reduce sugar content and develop natural alternatives to artificial sweeteners (such as stevia blends) in their products. Our new report studies the impacts of this change on global ingredients; consumer markets such as packaged foods, soft drinks and health and wellness; company strategy and legislation.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Sugar has become public enemy number one in packaged foods and drinks.

As increasing amounts of scientific research link it with obesity and tooth decay, sugar is seen as a health risk by most and as toxic as tobacco by others.

Sugar Tax

Fat is receding as the main problem, as public perception now lays the blame on sugary foods and drinks. In March 2014 the World Health Organization (WHO) stated that cutting intake to 5% (instead of the current 10%) of an adult's daily calories but would have additional benefits.

Governments are increasingly concerned about the rising costs of illnesses such as type 2 diabetes and cancer, which have risen alongside an obesity epidemic. The battle between food companies and governments may only just beginning; if health systems fail under the strain of obesity-related diseases, regulators will act prevent rather than cure them.

Several countries are introducing legislation to help curb intake of sugary foods; health warnings, sales taxes, banning of junk foods in schools, restrictions on advertising to children and reduced portion sizes will become more prevalent. Forms of sugar tax have already been introduced in Denmark, France, Finland, Hungary, Mexico and India.

Cut out sugar products

Sugar, fat and carbohydrate intake is falling, as consumers become aware of the need to maintain a healthy weight to prevent the onset of cardiovascular diseases and diabetes. Euromonitor International's Global Consumer Trends Survey 2013 revealed that over half of consumers are involved in some sort of weight loss or management system, with 23% on a formal diet.

Minimising sugar is high on the agenda for many consumers. Given a list of ingredients they specifically look for on food labels, 42% checked for limited or no added sugar.

Obesity will no longer be a problem limited to rich nations. Latest Euromonitor data shows obesity rates are set to increase in all countries over the forecast period, reaching 46% of the US population by 2018. The data also showed Chinese consumers were most likely to check for sugar content, while, Russian and Japanese consumers were far less concerned.

Health campaigners are also increasingly concerned about the high levels of hidden sugars in many alcoholic drinks – especially in cider, fortified wines and liqueurs.

Sweet Alternatives to Sugar

Many high profile anti-sugar protests highlight the notion that that fructose is a bigger problem than fat; it has zero nutritional value, it can cause liver damage and heart disease, it may help the body retain fat, it cause obesity and type 2 diabetes, it can be “addictive” releasing dopamine in the brain to produce a sensation akin to being rewarded.

The food industry also argues that sugar is an essential component of processed foods because it helps make products more palatable, it’s a bulking agent, texture modifier, flavour enhancer and preservative. There is no one ingredient that can replicate all of these functions in every product.

Until recently, high-intensity sweeteners have suffered from their artificial image, sometimes bitter aftertaste and a lack of consumer trust in synthetic ingredients. Aspartame, in particular, has come under fire, despite a vast number of scientific studies proving its safety.

In the face of the backlash both against sugar and artificial sweeteners, companies have been scrambling to develop naturally sweetened low-calorie formulations. The high intensity sweetener stevia has emerged as a clear winner since being approved for use in a number of markets.

Clearly Labelling the Sugar Content

Currently, companies need only specify the total sugar content in their products but under proposals put forward by the FDA in June 2014, labels would also include the quantity of “added sugars”.

Health campaigners will continue to put pressure on manufacturers to reduce the levels of hidden sugars in products such as bread, ready meals and dairy items, and to be more transparent about the sugar levels in all food and drink products by providing clearer information on nutrition labels.

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The Sugar Backlash and its Effects on Global Consumer Markets

EXECUTIVE SUMMARY

Demand factors

Consumer attitudes

Trends in ingredients

Chart 1 Global High Intensity Sweeteners Market by Type 2013

Consumer market trends

Company strategy

Outlook

INTRODUCTION AND DEFINITIONS

The demonisation of sugar

Definitions

Types of sweetener
Bulk sweeteners
Summary 1 Types of Sugars and Bulk Sweeteners
High Intensity Sweeteners
Summary 2 Types of High Intensity Sweeteners

Fact versus opinion

The facts about sugar
Arguments of the anti-sugar lobby
Arguments of the sugar lobby
Summary 3 Arguments For and Against Sugar Reduction

DEMAND FACTORS

The obesity pandemic

A burden on healthcare systems
The US has highest levels of obesity
Chart 2 Obese Population in Key Markets 2008/2013
Increasing incidence of type 2 diabetes
Turkey and Germany suffer highest rates of diabetes
Alarming prospects for young Americans
Chart 3 Prevalence of Diabetes in Key Markets 2008/2013

Tooth decay

Sugary drinks are the main culprit
Incidence highest in emerging markets
Chart 4 Children’s Dental Health in Key Markets 2013

Health awareness

Life expectancy increases
Obesity linked to low incomes
Chart 5 Life Expectancy at Birth in Key Markets 2008/2013

Regulatory guidelines and legislation

WHO stands firm
The difficulties in calculating added sugar
New lobby group puts pressure on sugar industry
Consumer pressure groups
Legislative measures
Mexican government takes drastic action
Taxing sugar
Food labelling changes
Sweeteners also affected by labelling regulations

Developments in low-calorie sweeteners

Stevia benefits from its natural origins
Removing bitter aftertaste
Advantame gains approval in US and EU
Replacing sugar’s other functions

CONSUMER ATTITUDES TOWARDS SUGAR

Consumers are better educated about nutrition
“Weight watching” more popular than actual dieting
Indians reveal highest rates of diabetes
Chart 6 Dietary Restrictions by Country 2013
Almost half of women seek products with limited or no added sugar
Concerns about HFCS highest in Brazil and China
Fewer than a third seek low-calorie foods
Chart 7 “Which of the following factors or ingredients do you look for on food labels and food ingredient labels?” by Country 2013
Chart 8 “Which of the following factors or ingredients do you look for on food labels and food ingredient labels?” by Age Group 2013
Chart 9 “Which of the following factors or ingredients do you look for on food labels and food ingredient labels?” by Gender
Attitudes towards low-calorie soft drinks
Chart 10 “Which of the following phrases would you use to describe low calorie soft drinks” 2012?

MARKET TRENDS

Ingredients

Gradual shift towards high intensity sweeteners
Sucrose still forms bulk of sugar sales
Erythritol enjoys strong growth
Consumers still mistrustful of aspartame
Sucralose sales double
Stevia revolutionises the market
Table 1 Global Sales of Sugar and Sweeteners as Ingredients by Category 2008/2013
US still dominates the market for stevia
Chart 11 Leading Markets for Stevia 2013

Beverages

Regular carbonates laden with sugar
Latin America sees rise in cola consumption
Chart 12 Per Capita Consumption of Regular Cola Carbonates in Leading Markets 2008/2013
Consumers mistrust artificial sweeteners
Norwegians prefer low-calorie colas
Chart 13 Per Capita Consumption of Low-calorie Cola Carbonates in Leading Markets 2008/2013
Eliminating aspartame
Mid-calorie carbonates create new category
Summary 4 Mid-calorie Carbonate Launches 2012-2014
Fruit juice also comes under fire
RTD tea enjoys strongest growth
Flavoured water benefits from health trend
Chart 14 Reduced-sugar Soft Drinks as a % of Total Soft Drinks by Category 2008/2013
Table 2 Global Sales of Reduced-sugar and Regular Soft Drinks by Category 2008/2013

Sweet packaged foods

Sales of sweet foods hold up well, despite sugar backlash
Indians acquire a taste for chocolate
Table 3 Sales of Sugary Foods by Type 2009/2014
Brazil has the sweetest tooth
Indians aspire to sweet foods
Chart 15 Per Capita Consumption of Sugary Packaged Foods by Country 2014

Better For You (BFY) foods

Reduced-sugar category still niche
Low-fat foods are deceptively sugary
Consumers favour natural foods
Chart 16 Global Sales of BFY Packaged Food by Type 2009/2014
Sugar-free gum dominates reduced-sugar confectionery
Meeting demand for taste and texture
Developments in stevia
Table 4 Global sales of Reduced-Sugar Packaged Foods by Category 2009/2014

Hidden sugars

Sugars have replaced fats in processed foods
German study reveals very high sugar levels in children’s cereals
Chart 17 Sugar Content of Breakfast Cereals in Germany 2012
Sugar in bread
Alcoholic drinks

KEY MARKET TRENDS

Australia

Anti-sugar campaigns hit home
Low-calorie carbonates stride ahead
Chart 18 Australia: Obesity 2008-2018
Indulgence versus calorie control
Table 5 Australia: Sales of Sweet Packaged Foods and Drinks 2009/2014

Brazil

A nation of sugar lovers
Obesity levels soar
Chart 19 Brazil: Obesity and Diabetes 2008-2018
Middle classes fuel growth in sweet processed foods
Ice cream sales boom
Table 6 Brazil: Sales of Sweet Packaged Foods and Drinks 2009/2014

China

Childhood obesity on the rise
Chart 20 China: Obesity and Diabetes 2008-2018
Rising incomes drive demand for indulgence foods...
...but health-orientated drinks are gaining traction
China is the home of stevia
Table 7 China: Sales of Sweet Packaged Foods and Drinks 2009/2014

Germany

Obesity and diabetes reach dangerous levels
Chart 21 Germany: Obesity and Diabetes 2008-2018
Palates adjust to low-sugar drinks
Confectionery consumption remains high, but consumers downsize
Table 8 Germany: Sales of Sweet Packaged Foods and Drinks 2009/2014

Mexico

Government takes drastic action
Chart 22 Mexico: Obesity and Diabetes 2008-2018
Sugary drinks tax could boost demand for low-calorie beverages
Nation’s sweet tooth goes beyond sugary drinks
Table 9 Mexico: Sales of Sweet Packaged Foods and Drinks 2009/2014

UK

Leading Europe in the obesity stakes
Tooth decay on the rise
Chart 23 UK: Obesity and Diabetes 2008-2018
Sources of added sugar vary by age
Increasing awareness of “hidden nasties”
Chart 24 UK: Daily Added Sugar Intake by Age Group
Chart 25 UK: Sources of Added Sugar by Age Group
Children warned to cut down on fruit juice
Stevia is well received
Table 10 UK: Sales of Sweet Packaged Foods and Drinks 2009/2014

US

The world’s largest nation
Sugar banned from schools
Chart 26 US: Obesity and Diabetes US 2008-2018
Most added sugars come from soft drinks
Chart 27 US: Sources of Added Sugar by Age Group
Carbonates lose share to healthier drinks
Consumers ambivalent towards stevia
Zero-calorie liquid concentrates see surprise growth
Table 11 US: Sales of Sweet Packaged Foods and Drinks 2009/2014

COMPANY STRATEGY

Sugar reduction by stealth

Educating consumers’ taste buds
Dannon cuts down in the US
Mondelez more reluctant
Stealth or health

Portion control and calorie caps

Countlines made smaller
“Handbag size” Coke

Voluntary schemes and health campaigns

UK’s Responsibility Deal Calorie Reduction Pledge
CFBAI adopts category-specific nutrition criteria

Retailers take action

The switch to natural sweeteners

Disassociation from artificial ingredients
Stevia may not be the magic bullet

FUTURE OUTLOOK

Anti-sugar movement to gain momentum

More research required

The world will continue to become fatter

Chart 28 Forecast Obesity Rates in Key Markets 2013/2018

The need for government intervention

More sugar taxes on the cards

The need to make food labelling more transparent

The role of industry

The future of sweeteners

Table 12 Forecast Sales of Sugar and Sweeteners as Ingredients by Category 2013/2018

Searching for the ideal sugar replacement

Avoidance versus indulgence

Soft drinks trends

Table 13 Forecast Sales of Soft Drinks 2013-2018

A growing preference for NH foods

Chart 29 Forecast Sales of Selected Health and Wellness Packaged Foods 2014-2019

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Megatrends

Strategy Briefing

The Sugar Backlash and its Effects on Global Consumer Markets

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Sugar has become public enemy number one in packaged foods and drinks.

Sugar Tax

Cut out sugar products

Sweet Alternatives to Sugar

Clearly Labelling the Sugar Content

Want to find out more about this report?

Table of Contents

The Sugar Backlash and its Effects on Global Consumer Markets

EXECUTIVE SUMMARY

Demand factors

Consumer attitudes

Trends in ingredients

Consumer market trends

Company strategy

Outlook

INTRODUCTION AND DEFINITIONS

The demonisation of sugar

Definitions

Fact versus opinion

DEMAND FACTORS

The obesity pandemic

Tooth decay

Health awareness

Regulatory guidelines and legislation

Developments in low-calorie sweeteners

CONSUMER ATTITUDES TOWARDS SUGAR

MARKET TRENDS

Ingredients

Beverages

Sweet packaged foods

Better For You (BFY) foods

Hidden sugars

KEY MARKET TRENDS

Australia

Brazil

China

Germany

Mexico

UK

US

COMPANY STRATEGY

Sugar reduction by stealth

Portion control and calorie caps

Voluntary schemes and health campaigns

Retailers take action

The switch to natural sweeteners

FUTURE OUTLOOK

Anti-sugar movement to gain momentum

More research required

The world will continue to become fatter

The need for government intervention

More sugar taxes on the cards

The need to make food labelling more transparent

The role of industry

The future of sweeteners

Searching for the ideal sugar replacement

Avoidance versus indulgence

Soft drinks trends

A growing preference for NH foods

Why buy this report?

Want to find out more about this report?

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