Hitting the ‘sweet spot’ is the sugar reduction challenge for soft drinks sweeteners - GlobalData

• The sugar content of food and beverages is under increasing scrutiny, as the World Obesity Federation forecasts that 54% of the global adult population will be overweight or obese by 2035, representing 3.3 billion adults
• Low/no calorie innovation remains a core focus of new product development for the soft drinks industry, with 286 global patent applications and grants published in the latest 52 weeks to June 2024 tagged with the theme 'sugar reduction’
• The volume share contribution of low-calorie vs. regular soft drinks continues to increase, accounting for 14.4% of total global soft drinks volume sales in 2023, with additional sales of 9.15 billion liters forecast by 2028

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The sugar content of food and beverages is under increasing scrutiny due to the serious adverse health outcomes associated with the ingredient, with type 2 diabetes, obesity, and cardiovascular disease reaching crisis levels around the world. The World Obesity Federation forecasts that 54% of the global adult population will be overweight or obese by 2035, representing 3.3 billion adults.

 

Faced with an escalating public health crisis and spiraling treatment costs, governments are implementing various interventions to cut sugar and calorie consumption. These range from setting calorie reduction targets, developing on-pack nutrition labeling schemes, and implementing sugar taxes to reduce the consumption of high-sugar soft drinks.

Beverages consultants at GlobalData, a leading data and analytics company, have published a new study: ‘The Sugar Challenge Report 2024: The evolution and future outlook of calorie and sugar reduction in soft drinks’, which explores the sugar reduction outlook for the global soft drinks industry, how manufacturers and governments are responding, the increasing focus on low/no calorie new product development, and the search for the ‘sweet spot’ in sweetener and sugar alternatives development.

Sugar reduction outlook for the global soft drinks industry

Consumers are becoming increasingly mindful of the ingredients in their food and drinks as they continue to adopt healthier lifestyles and reduce their sugar intake. GlobalData’s global consumer survey Q1 2023, revealed that 69% of consumers across all generation groups now pay a ‘high to very high’ attention to the ingredients listed on product packaging. When evaluating the healthiness of a product, 45% of respondents focus on ‘sugar content,’ 46% on ‘calorie count,’ with ‘fat content’ being the top concern for 47% of consumers.

This growing preference for healthier options is reshaping the market and driving changes in regional sales trends. Low/no calorie product innovation is rapidly becoming a core focus for the non-alcoholic beverages industry. Notably, 286 global patent applications and grants were published in the latest 52 weeks to June 2024 tagged with the theme 'sugar reduction’, according to GlobalData Patent Analytics.

Additionally, over 36% of UK non-alcoholic beverage launches in the 52 weeks to June 2024 were marketed as ‘reduced sugar’ or ‘reduced calories’, according to GlobalData Product Launch Analytics, with “Zero Sugar” emerging as the dominant name for this category.

Industry and government response

Global soft drinks associations have set calorie reduction targets of between 20% and 25% to be achieved by 2025, spurring manufacturers to innovate. The implementation of sugar taxes worldwide has further accelerated these efforts.

During the 12 months to June 2024, GlobalData Product Launch Analytics recorded 180 global low/no sugar soft drinks launches. Consequently, the global volume share of low-calorie versus regular-calorie soft drinks continues to rise, accounting for 14.4% of the total global soft drinks volume sales in 2023, with additional sales of 9.15 billion liters forecast for the segment by 2028, according to GlobalData Market Analyzers. Low-calorie sales are increasing across all major soft drink categories, particularly gaining market share in carbonates and energy drinks.

GlobalData’s analysis shows that high-growth markets for low/no calorie products include France and Spain, where bringing more of these products to market to match the range of choices available in mature markets such as the UK, Germany, and the US will drive further low/no calorie category growth.

Focus on Sweeteners/Sugar Alternatives

The quest for the perfect sugar replacement drives innovation in sweeteners and sweetener systems. Acesulfame K, Aspartame, and Sucralose remain the most commonly used artificial sweeteners; however, soft drink innovations are also using fruit concentrate-based sweeteners such as sweet potato and apple extracts, apple juice concentrate, and monk fruit extract.

Ashleigh Warnock, Beverages Managing Consultant and Analyst at GlobalData, comments: “Finding sugar reduction solutions that offer an ideal balance between  great taste and healthier ingredients is key to new product development in this space. The ‘sweet spot’ for sweetener development is a product that matches the unique properties of sugar, a sweetener that can work in soft drinks and food recipes, is “perceived as natural”, is “cheaper than sugar” and is significantly lower in calories than the sugar being replaced.”