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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