New Consumer Behavior Shakes Demand for High-Intensity Sweeteners
Slow growth in Europe and North America, Steady in Asia, South America
The high-intensity sweetener market is a study in contrasts. Although new, natural sweeteners like stevia extract are gaining ground, consumption growth for high-intensity sweeteners as a class has slowed to near zero in North America and Europe, due, in part, to the decline in soft drink consumption in these regions. In contrast, demand for the entire range of high-intensity sweeteners remains strong in South America and Asia, according to new research from IHS.
“Worldwide consumption of high-intensity sweeteners is largely dependent on production of diet carbonated soft drinks and low-calorie food,” said Marifaith Hackett, director of specialty chemicals research at IHS Chemical and principal author of the IHS Chemical Economics Handbook - High Intensity Sweeteners Report. “Beverages are the largest end-use for high-intensity sweeteners, followed by food, tabletop sweeteners, personal care products (such as toothpaste), and pharmaceuticals.”
”Global consumption of high-intensity sweeteners for all applications totaled more than 139,000 metric tons in 2013,” Hackett said. “Global consumption of these products for sweetener applications totaled more than 129,000 metric tons in 2013, equivalent (in terms of sweetness) to more than 18 million metric tons of table sugar. The value of the market for high-intensity sweeteners in sweetening applications was more than $2 billion dollars in 2013.” China is the world’s largest source of high-intensity sweeteners, accounting for more than 70 percent of world production in 2013. Indonesia was a distant second, followed by the U.S. and Western Europe.
Diet soft drinks, low-calorie yogurt, and sugar-free jam taste as sweet as their “regular” counterparts because they contain high-intensity sweeteners, the IHS report noted. Aspartame, sucralose, acesulfame K, saccharin and other high-intensity sweeteners have zero calories, but they are many times sweeter than table sugar. In addition, high-intensity sweeteners are non-cariogenic – they don’t cause cavities.
“Growing concerns regarding obesity and the connection between diet and major diseases such as diabetes and heart disease have caused consumers to reexamine their diets and lifestyles and seek healthier alternatives, including low- or no-calorie versions of food and beverages,” Hackett said. “High-intensity sweeteners enable food producers to deliver reduced-calorie products that taste good. Sugar-free gum, for example, outsells regular gum.”
The use of high-intensity sweeteners by food producers can also be impacted by regulations, and an increasing number of national and local governments--concerned about the rise of obesity and diabetes—are considering taxes on high-calorie soft drinks and processed foods. Notably, the IHS report stated, the Mexican government recently enacted a tax on high-calorie processed foods, including carbonated soft drinks.
In North America and Europe, consumption of soft drinks – a major end use for high-intensity sweeteners – is declining. As a result, demand for some artificial sweeteners is flat or decreasing in these regions. “We are seeing a significant shift in consumer behavior and preferences in Western Europe and North America,” Hackett said. “Health-conscious consumers are drinking fewer sodas. In addition, they are seeking out beverages and foods made with natural ingredients, including sweeteners such as stevia extract. The challenge for food producers is to find sweeteners that meet consumer expectations but also taste good and meet cost and performance parameters. When it comes to taste, refined sugar remains the ‘gold standard’.”
“Beverage companies are slow to tinker with marquee products,” Hackett said, “but they do experiment with new sweetener combinations when they introduce new products. For example, the Coca-Cola® Company introduced Coca-Cola Life™, a reduced calorie soft drink sweetened with stevia extract and sugar, in Argentina and Chile in 2013. Coca-Cola Life will make its debut in U.S. and U.K. markets in 2014.”
According to the IHS report, the growing concern over health and nutrition is driving increased interest in natural sweeteners. Stevia extract, which is derived from the leaves of the stevia shrub and grows naturally in South America, has been the primary beneficiary of consumer interest, followed by monk fruit extract. Monk fruit, a green melon-like fruit from China, is a relative of watermelons and pumpkins. Both stevia and monk fruit have been used as sweeteners in their native countries for hundreds of years.