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Sugar Alternatives? Here's Why Bottlers are Loving Them

3 2019

Soft beverages are generally sweetened using cane sugar. At least that’s how it used to be. But today that’s not necessarily true, as a wide range of sugar alternatives are becoming more popular. What’s driving this shift in the beverage industry is partly changing consumer preferences, with more people choosing a healthy lifestyle and searching for “clean label” products. But there’s more to it than that.

Tax legislation restricting the use of sugar in countries around the world including Belgium, France, the UK, the Philippines, and others – as well as stricter regulations in the beverage industry, and new FDA regulatory requirements regarding the labeling of added sugar – are all contributors to the trend. As a result, bottlers and distributors are being pushed to use substitutes that provide the sweet taste without the sugar in a wide range of beverages.

The Impact of New Regulations

New taxes and regulations are part of what’s pulling the beverage industry away from sugary drinks. In 2018, the FDA published an announcement that beverage producers must disclose added sugars – in grams, and as a percentage of the day’s recommended maximum intake. And in other countries, the desire to limit sugar consumption has resulted in new legislation.
Read More on Top Trends in the Beverage Industry

A law came into effect last April in the UK, for example, that applies a levy of 24p per liter on drinks with more than 8 grams of sugar per 100 ml. Drinks with 5 to 8 grams per 100 ml are taxed at the rate of 18p per liter. Mexico (2014), Ireland (2018), and France (2018) have introduced similar taxes, while Norway has had a sugar tax on refined sugar products since 1922 – originally designed to boost state income, but boosted by 83 percent in 2018 in a bid to reduce sugar intake. In the US, there are new laws limiting sugar use at the state level, such as a tax on sugar-sweetened beverages that went into effect in Seattle and Philadelphia in 2018.

Mexico was the first to initiate this kind of legislation (aside from the 1921 tax in Norway), and it is therefore in the unique position to look back at the law’s more long-term effects. While groundbreaking at the time, local studies show that the legislation was not necessarily effective. Four years later, research has revealed that over the long term, Mexican consumers didn’t stop buying sugary drinks, nor did they reduce the number of sugary drinks that they consumed.

And yet, presumably because consumer interest in cutting down on sugar and reducing obesity is so strong, the concept of taxing sugary drinks is fast gaining traction internationally.

The Obesity Epidemic and Shift Towards “Clean” Eating

According to the World Health Organization, obesity has reached epidemic proportions globally, causing the death of at least 2.8 million people annually. That’s right – 2.8 million. It’s shocking. These stats really do speak for themselves, and there’s a good reason for consumers to be concerned with obesity.

In the U.S., more than 1 in 3 adults is considered obese. Moreover, as more obese children become adults, it is predicted that there will be an increase in the rates of heart disease, cancer, diabetes, and other illnesses. As pointed out by Dr. Jason Fung, the best way to reduce type 2 diabetes, an illness caused by obesity, is not to treat the illness itself, but to treat its root cause.

With the increase in Western countries in weight-related problems such as diabetes, consumers are raising the bar and expecting beverage bottlers and distributors to provide more detailed information about the ingredients in their beverages. Consumers are demanding food and beverage products that are “clean”, and putting a greater emphasis on healthier lifestyle choices in general as well as actively seeking beverage products that have lower sugar content.

Opting for New Sugar Alternatives

As the food and beverage industry responds to consumer preferences and looks for ways to reduce the amount of sugar in products without sacrificing taste, new natural sweeteners have come into play. The plant-based, zero-calorie stevia is one trending consumer choice, and its advocates claim that it successfully maintains great taste while reducing sugar intake. Retail sales of stevia sweeteners grew 11.9% last year, and it is being used more and more not just in sports drinks and soft drinks, but in other beverage products as well.

Another increasingly popular natural sweetener is monk fruit, also known as luo han guo. Monk fruit has zero calories per serving and, according to Medical News Today, it is around 150–200 times sweeter than sugar. MarketWatch determines that it is the second most popular natural sweetener after stevia – and emphasizes that, while it is more expensive than artificial sweeteners, it has functional properties including anti-microbial, anti-inflammatory and anti-carcinogenic properties that are likely to influence the growth of the market.

Additionally, natural nutritive sweeteners like honey, agave, maple sap, and juice are growing in popularity. Honey, in particular, has a “health halo”, with 77% of consumers globally (63% of Americans) believing it has a positive impact on health – according to Tom Vierhile, Innovation Insights Director with UK-based data management company GlobalData.

The agave syrup market is expanding, attaining a CAGR of 5.2% between 2018 and 2023, according to Mordor Intelligence. Agave syrup has higher sweetness intensity and viscosity than honey and, particularly for vegans, it is a great solution. Its quick melting trait makes it popular with many beverage manufacturers, and it doesn’t have a bitter after-taste like stevia.

Maple syrup is another increasingly popular choice. Made by boiling down sap from maple trees until the sugars condense into thickened syrup, maple syrup came out ahead of other sugar alternatives like stevia and agave, but was rated after honey in a recent study by Kerry.

There’s No Sugarcoating It: Consumers Are Seeking Alternatives

According to PreparedFoods, clean label and sugar reduction are the top two global trends driving new product development and innovation. And this increased push toward products with less sugar means beverage producers need to identify the best alternatives, figuring out which sweeteners work with their products while meeting consumer preferences.

The beverage industry’s 2018 product development outlook stated that 62 percent of American consumers are looking for natural beverage options and better-for-you ingredients. Consumers are actively investigating the sugar content in their store-bought beverages in order to identify the products that help them cut their sugar intake, and ultimately improve health.

At RC Cola International, we’re ahead of the game. We’re meeting consumer demand for clean labels and reduced sugar with many innovative, naturally sweetened products.
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