Sugar Substitutes Market

Sugar Substitutes Market Analysis & Report Summary, 2028

The sugar substitutes market is projected to grow from USD 18.8 billion in 2023 growing at a CAGR of 5.2% from 2023 to 2028 to reach USD 24.3 billion by 2028. Lifestyle disorders which include diabetes, cancer, chronic obstructive pulmonary disease, and heart disease, are the leading causes of death globally and pose a growing threat to global health. NCD-related mortality which amounts to 41 million deaths per year, currently outnumbers all other communicable disease deaths put together. An improper and unbalanced diet is a major cause of metabolic diseases. The nutrient quality of the diet is threatened by contemporary eating habits characterized by excessive free sugar consumption, especially when it comes to beverages with added sugar as it increases overall calorie density without providing any specific nutrients. This can result in unhealthy weight gain and raise the risk of obesity, oral disease, and NCDs.

Over the past ten years, the availability of sugar has increased dramatically, as has its consumption, which went from 130 to 178 million metric tons globally. Given the probable relationship between chronic illnesses and excessive sugar consumption, an increasing number of consumers are calling for a reduction in the quantity of dietary sugar consumed in order to improve the overall well-being of the population. As a result of the increasing demand, the whole industry has developed to explore new technologies and ingredients to use for sugar replacement and reduction solutions.

The sugar substitutes market has become competitive as companies investigate novel sugars, sugar alternatives, flavorings, and other sugar-reduction strategies, all while focusing on new technology that can help consumers be healthier without lamenting the loss of sugar.

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Sugar substitutes Market Dynamics

Increased Health Consciousness

Almost 1 billion individuals worldwide are obese. According to WHO forecasts, 167 million people—children and adults alike—will be less healthy owing to obesity by 2025. Several scientific studies have found an association between sugar consumption and excess body weight. Obesity raises the likelihood of developing Type 2 diabetes, high blood pressure, and high cholesterol. Given the persistently ominous health statistics, consumers are searching for food options that will both maintain their health and satiate their palates. Thus, a growing percentage of health-conscious consumers favor sugar replacements that fulfill their sweet cravings without raising the overall calorie content of items. Moreover, sugar substitutes are ethically and environmentally sound while offering a wide range of health benefits. Responding to the specific needs of health-conscious customers, industry players are implementing natural and artificial sweeteners to improve the quality of their food products and beverages, while preserving consumer health and promoting the growth for sugar substitutes market.

Strict adherence to regulations is required for sugar substitute products.

Sugar substitutes which include both artificial sweeteners and intense sweeteners derived from natural sources, are subject to stringent restrictions and are regulated as food additives. Standards set by regulatory bodies such as the European Union (EU),  National Food Safety and Quality Service (SENASA), Canadian Food Inspection Agency (CFIA), US Food and Drug Administration (FDA), Food Safety and Standards Authority of India (FSSAI) and others for the usage limits of artificial sweeteners differ with respective authoritative bodies. Thus, laws pertaining to sugar substitutes are different in every region which pose a serious threat to companies for streamlining product development. European laws are stringent with artificial sweeteners, whereas the US regulations favor the introduction of novel sweeteners irrespective of the origin. These stringent regulations for the use of sweeteners as food ingredients limit the growth of the sweeteners industry globally.

Increased investment in R&D activities by manufacturers

The demand for sugar substitutes from developed economies has increased. The major reason behind the substantial growth of the sugar substitutes market is the changing consumer attitude toward consuming sugar alternatives. The awareness about the ill effects of high-calorie regular sugar consumption among consumers is increasing. To attract such potential consumers, sugar substitutes are made increasingly available across pharmacies, supermarkets, grocery stores, and health food shops, globally. Manufacturers are increasingly investing in the R&D of new sugar substitutes to gain a larger share than their competitors. Resugar, the food technology company that created the first all-natural, % sugar-like substitute, revealed in 2022 that it had closed USD 3 million in series A funding to expand its marketing and sales team internationally, strengthen its R&D collaboration with Technion, and quicken the process of regulatory approval and IP protection for its growing line of products.

Product labeling and claim issues.

The international regulatory bodies for food safety and quality are making food safety regulations more stringent. Apart from food testing and certification, these international regulatory bodies are compelling manufacturers to follow food labeling rules and regulations. Governments of most nations are taking initiatives to implement the food labeling law in their country. For instance, the Food Safety and Standards Authority of India (FSSAI) amended the 2011 food safety and standards (prohibition and limitations on sales) rules to require the labelling of artificial sweeteners on beverages sold through vending machines.

Companies must declare the presence of artificial sweetener in every box of food (which is allowed to contain artificial sweetener) on its labelling and in its advertisements. The FSSAI recommends that "a display or label" indicating the presence of artificial sweetener "shall be placed on the cups or in the container in which the product is served" if a beverage product containing artificial sweetener is served through vending machines. The stringent regulations laid down by regulatory bodies about testing, certification, usage, production, and labeling pose a challenge for manufacturers.

Based on Type, high-intensity sweeteners is estimated to account for the fasted market share of the sugar substitutes market

Based on type, the high-intensity sweeteners market is estimated to account for the fastest market share growing at a CAGR of 6.2 % between 2023 and 2028. The growing burden of non-communicable diseases, increased demand for low-calorie sweeteners, a myriad of health benefits provided by sugar substitutes, as well as increased demand for natural and environmentally ethical alternatives to regular sugar, will all contribute to the market growth.

Based on Application, the beverage segment is estimated to account for the highest growth of the sugar substitute market

The beverage segment is anticipated to witness the highest growth during the forecast period with a CAGR of 5.4% in the sugar substitutes market. According to researchers at Deakin University in Geelong, per-capita volumes of non-nutritive sweeteners grew 36% globally in beverage sales from 2007 to 2019. These "non-nutritive" sweeteners include synthetic sweeteners like aspartame and acesulfame-k as well as natural alternatives like stevia and monk fruit.

According to the study, the number of added sugars from beverage sales has increased globally as well, primarily due to a 50% increase in middle-income nations like India and China. High-intensity sugar substitutes witness an increase in preference for the production of beverages. As a low volume of his is enough for imparting the required degree of sweetness to products, it remains a more economical option for the beverage industry. Additionally, modern-day consumers are seeking variations in taste and flavor of beverage products without jeopardizing health concerns, thereby driving market growth during the forecast period.

Based on Form, the liquid segment is estimated to account for the highest growth of the sugar substitutes market

The liquid segment is projected to grow at a rapid rate with a CAGR of 5.5% during the forecast period, Liquid sugar substitutes are highly soluble and sweeter in contrast to the common table sugar sucrose, which makes them increasingly suitable for food and beverage production. The market is primarily driven by a surge in demand for healthy yet flavorful beverages and food products, consumers’ desire for healthier lifestyles, and the need to flatten the curve of diabetes, obesity, and other related metabolic diseases that are associated with high caloric intake.

Europe had a market size of USD 3.3 billion, and the market is projected to grow with a CAGR of 4.7% during the forecast period (2023-2028)

According to the Centre for the Promotion of Imports from developing countries (CBI) sugar consumption is declining in Europe. Low-sugar diets are becoming more popular among consumers. Food processors are therefore reformulating their products to have lower sugar content. Processors are employing sugar substitutes more and more frequently so that products can be labeled as sugar-free. Many sugar substitutes are being studied by food safety regulators. New methods and components are being used by manufacturers to minimize sugar with no impact on flavor. In order to encourage healthier diets and lower the prevalence of overweight and obesity throughout the WHO European Region, WHO/Europe introduced the new, voluntary, Member State-led Sugar and Calorie Reduction Network in 2022.

Europe: Sugar Substitutes Market Snapshot

In August 2019, France-based company Roquette, a global leader in plant-based ingredients for food, nutrition and health markets; biotech pioneer, BRAIN AG; and BRAIN Group company AnalytiCon Discovery signed a contractual agreement for the approval and production of Brazzein. Brazzein is a protein sweetener that provides outstanding sweetening potency while preserving its taste profile and sugar-free functionality. As part of the agreed Joint Development Agreement (JDA), Roquette and BRAIN would progress with the food and beverage sector's approval and industrial scale-up of the protein sweetener. A few of the sugar substitutes companies in the Europe region include Will’s Vegan (UK), Pinatex (Spain), Veja (France), Clarino (Philippines), Viridis (Italy), Mabel (Italy), Volkswagen (Germany) and others.

Top Companies in the Sugar Substitutes Market

The key players in market include International Flavors & Fragrances Inc. (US), ADM (US), Tate & Lyle (UK), Ingredion (US), and Cargill, Incorporated (US).

Scope of the Sugar Substitutes Market Report

Target Audience of the Sugar Substitutes Market

• Sugar substitute producers, suppliers, distributors, importers, and exporters
• Large-scale food and beverage ingredient manufacturers, processed food manufacturers, and research organizations
• Related government authorities, commercial research & development (R&D) institutions, FDA, EFSA, USDA, FSANZ, EUFIC government agencies & NGOs, and other regulatory bodies
• Food product consumers
• Regulatory bodies, including government agencies and NGOs
• Commercial research & development (R&D) institutions and financial institutions
• Government and research organizations

Sugar Substitutes Market Segmentation:

This research report categorizes the market based on type, source, composition application, form, and region.

Recent Developments in Sugar Substitutes Market

• In November 2022, Tate & Lyle announced the launch of ERYTESSE, a new addition to its sweetener portfolio. It has 70% of the sweetness of sucrose but has zero calories. It can be used in various applications, including beverages, dairy, bakery, and confectionery.
• In June 2022, International Flavors & Fragrances Inc. (“IFF”) merged with DuPont’s Nutrition & Biosciences (“N&B”), which transferred various legal entities associated with the N&B business of DuPont to IFF. A global leader in high-value ingredients and solutions for the food and beverage business was created through the merger of IFF and N&B. The merged company's expanded skills and global reach would enable it to develop creative solutions to meet customer demands and the growing desire for natural, healthier, and "better for you" products.
• In April 2020, Ingredion launched its first polyol sweetener named ERYSTA Erythritol to meet the demands of its health-conscious consumers.

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