While global sugar purchasing is expected to reach record highs by the end of the decade, the world's biggest soft drinks manufacturers are increasingly seeking out alternative ways to sweeten up their products.
According to data from Euromonitor International, global purchasing of sugar will rise by 14.4 million tonnes by 2020, in absolute terms.
At the same time, the research company found that across 54 countries studied, seven are likely to increase their per capita sugar content by 10 grams or more.
The main sources of this growth will be soft drinks, such as carbonates and juice, Euromonitor stated.
'In some countries, this growth will stem from increased consumption of food/drink high in intrinsic sugars, but even there, if product formulations remain unchanged, the second highest contributors to this growth will primarily be soft drinks,' the research firm said.
But in terms of the countries with the highest consumption of sugar, while Hungary saw consumption increase from 137.26 grams per capita per day to 137.75 grams, a 0.35% increase, the next largest consumers saw a decrease in consumption, with consumption in Chile seeing a decline of 2.6%, the Netherlands seeing a decline of 3.5% and Germany seeing a decline of 2.4%.
Sugar Taxes
Increased legislation relating to sugar consumption is leading to widespread product reformulation in many markets, particularly among manufacturers highly-leveraged towards carbonated soft drinks.
In the U.K., a new 'sugar tax' is set to be introduced in April, which has "prompted manufacturers to reformulate [...] those brands that belong to the main sugar category ‘culprits’, such as carbonates and juice drinks, to reduce their sugar levels below the tax-applicable threshold of five grams per 100 millilitre," said Florence Schmit, research analyst at Euromonitor International.
"Leading soft drinks players in the UK such as Coca-Cola Enterprises and Lucozade Ribena Suntory have reformulated old, and introduced new brands to fall below the sugar levy, such as Coca-Cola’s Monster Hydro energy drink and Suntory’s Lucozade portfolio, which has been completely reformulated to avoid paying the higher price."
Alternative Approach
Schmit noted that Coca-Cola, which holds over 40% volume market share of on- and off-trade sales, "has stopped short of reducing sugar levels in its Coca-Cola Classic brand, which accounts for 14% of total carbonates volumes".
Rather, the business is planning to reduce pack sizes and increase unit prices of said product, "which will itself propel unit prices overall owing to carbonates’ dominance in the UK Soft Drinks market – accounting for around 45% of total volume sales in 2017".
At the same time, Euromonitor points out that sales of Coca-Cola Classic in the UK "have been declining by double digits over the last five years, suffering from a general trend in the industry towards lower sugar variants in carbonates and Soft Drinks overall," says Schmit.
"The sugar tax is thus piggybacking on pre-existing trends, though it will help propel them along: those consumers who were already reducing their sugar content will have more brands to choose from, and those who weren’t will be nudged towards them either by reduced pack sizes or increased unit prices."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
