Global sugar consumption vulnerable to changing food and beverage trends – Rabobank

By IAC Staff

The global sugar industry faces a challenge as consumers cut back on the sweetener and food and beverage companies commit themselves to reducing sugar in their products, Rabobank said in a note.

A shift away from sugar has become a global trend, and is a big deal for the sugar industry that cannot be dismissed as a passing fad or wished away, the note said, adding that for many consumers who follow today’s health-and-wellness trends with respect to weight management, calorie reduction has become synonymous with sugar reduction.

“Leading food & beverage companies, ever eager to cater to their consumers’ wishes and changing tastes, have responded by going beyond the traditional industry mantra of ‘in moderation, all foods have a place in the diet’, and have made public commitments on calorie and sugar reduction through a range of strategies, including reformulation and changing product size,” Rabobank said.

According to the note, while these moves are not necessarily to the detriment of bottom line of companies, these initiatives could accelerate a longer-term slowdown of sugar consumption.

As in the past, global economic growth is slowly bringing a larger share of the world population towards levels of per-capita income beyond which any further gains in income produce only modest increases in per-capita sugar consumption, the note pointed out.

“Nevertheless, we estimate that, if initiatives by companies and governments were to achieve a significant (5 percent or above) reduction in global food & beverage sector sugar use over a two- to three-year implementation period, it would offset much of the expected global growth in consumption during this period,” Rabobank said.

The outlook for industrial sugar use in emerging markets is key, as processed foods and beverages account for 63 percent of global sugar consumption, and most of this industrial use—47 percent of total global sugar consumption—is in emerging markets.

“Thus, any measure that significantly affects industrial sugar use in emerging markets will significantly affect total global consumption,” Rabobank said in the note.

 

 

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