Features International Sugar Journal

Is the slowdown in sugar demand just heath-led?

As the momentum was building up, commencing late last year in the media-led frenzy by anti-sugar campaigners, analysts in the industry began to assess the impact of these on demand. Gut feeling was that the past annual rise in consumption of around 2% can simply not be taken for granted anymore. The analysts concluded that the combination of two particular developments will adversely impact demand – the cry for tax on sugar-based products (which is having traction in not only developed economies but also emerging ones), along with food processors, sensitive about consumer perception and their market share, responding with announcements of introducing sugar-reduced products. The fact is, the sugar industry may justifiably feel that many of the claims against sugar are based on misuse of science, but the constant hammering has swayed customers, particularly in the West. Analysts Tropical Research Service and Green Pol recently forecast rise in 2017/18 consumption of only 1.2 and 1.0%, respectively. But how credible and well informed is this trend of consumption flattening? Is the slowdown just health-led?

In its latest Outlook1, OECD and FAO are bit more circumspect. They project sugar consumption over the next decade at 1.75%, rising to 203 million tonnes in 2026, with per capita consumption increasing from 22.9 kg to 24.8 kg over this period. With the exception of European Union, sugar consumption is expected to rise in rest of the globe. Key drivers are likely to be “rising incomes, urbanisation and growing populations”. Expansion in sugar use will increase particularly in Africa and Asia where current per capita consumption levels are lower than in other regions (see figure 1). With the rise of middle classes in emerging economies when both partners go to work, demand for industrial use of sugar will also increase in the preparation ready-made foods as couples take advantage of this option.

Per capita sugar demand in major regions

Perhaps the underlying reason why the demand for sugar is unlikely to decline significantly, even in the West, is because, as researchers at the Monell Center found, that the level of sweetness most preferred in foods and beverages does not change2. Following a one-month baseline period for all participants, a ‘control’ group of 16 subjects maintained their normal diet and sugar intake over the next three months. The sweet ‘reduced-sugar’ group of 13 subjects was instructed to maintain their baseline caloric intake while replacing 40% of calories from sugars with fats, proteins, and complex carbohydrates over the same time period. At the end of the study, when all participants were allowed to choose their own diet, people who had been in the reduced-sugar group quickly increased their sugar intake to baseline levels. Similarly, their judgments of sweet taste intensity reverted to pre-diet levels. “This rapid rebound suggests that people may resist changes in the sugar level of their diets,” noted the lead author Paul Wise.

Most food processors and confectioners are doubtless aware of this as they pursue development of sugar-reduced products, whether through novel chemistry or in combination of with intense sweeteners. For example, Nestle announced late last year that its researchers have engineered a natural way to structure sugar that enables manufacturers to use up to 40% less without reducing the sweetness of their products, according to the company’s press release. The discovery will enable Nestlé to significantly decrease the total sugar in its confectionery products, while maintaining a very natural taste. The company expects to roll-out reduced sugar confectionery sometime this year. Even if Nestle can get the product to work, sugar will be hard to replace. It is stable, reacts well with other ingredients and has the right taste and consistency. Any alternative needs to tick all these boxes.

But the intrinsic drop in demand for sugar may most likely come from the availability of cheaper alternative – high-fructose corn syrup (HFCS). Soft drinks producers in China displaced 3.3 million tonnes of sugar in alone in 2016, according to the USDA as HFCS was about 3,680 yuan (US$534) a tonne cheaper than sugar. OECD-FAO projects HFCS consumption to grow by 14% over the next decade.

References

1 OECD-FAO Agricultural outlook 2017-2026. ISBN 978-92-64-27547-8, pp 136

2 Paul M Wise, Laura Nattress, Linda Flammer and Gary K Beauchamp (2016) Reduced dietary intake of simple sugars alters perceived sweet taste intensity but not perceived pleasantness. Am J Clin Nutr  January 103 (1): 50-60