Summary
Health based campaigns to reduce ‘hidden’ sugars in food and drink products are gaining ground across the globe. This is beginning to impact on global sugar consumption, global consumption is projected to fall over 700,000 tonnes in the coming year despite the current low prices. The trend towards reduced sugar use in food and drink products is being aided by the development of alternative sweeteners which are better suited to use in processed food and drinks. In this context individual ACP sugar exporters will need to develop a better understanding of which components of the market their exports serve and if necessary, develop market repositioning initiatives aimed at reducing their vulnerability to the current health campaigns which are targeting high sugar content food and drink products.
Consumer surveys suggest ‘nearly half of all consumers class low sugar or sugar-free products as “extremely” or “very” important when deciding what to eat and drink’. Worldwide ‘48% of respondents thought products that were low sugar or sugar-free were “extremely” or “very” important’. The survey found 54% of high income households and 44% of low income households placed importance on low sugar or sugar free formulations. The survey noted ‘how shoppers habits have changed in the face of national campaigns to reduce sugar and salt in foods’ (1).
Meanwhile in the UK Action on Sugar is launching more targeted campaign against hidden sugars by picking up on the high sugar content of supermarket and retailers ‘meals deals’ promotional campaigns. A survey undertaken for Action on Sugar revealed ‘the alarming regularity in which retailers offer “high sugar” food and beverages’ as part of promotional ‘meal deals’, with these ‘meal deals’ containing up to ‘30 teaspoons of sugar’ (2).
Action on Sugar has ‘accused the majority of retailers of failing to promote healthy choices to their consumers’. The Chairperson of Action on Sugar Professor Graham Macgregor argued ‘Supermarkets pretend to be on the side of their consumer’s health to encourage loyalty, but this survey clearly shows that they ae not’. He called on the UK government at the national level to ‘take decisive action to ban all promotions of unhealthy foods’.
The Health Select Committee meanwhile has similarly urged the government to place ‘curbs on big discounts and price promotions on unhealthy foods’, arguing ‘responsible retailers were overshadowed by those offering discounts on food high in sugar and fat’. The devolved government in Scotland meanwhile has ‘plans to restrict the promotion of food and drink high in fat, sugar and salt’ (2).
The French government for its part is moving towards introducing a sliding scale of taxation on the sugar content of drinks. This builds on the 2013 French government initiative which taxed all sugary drinks. The new sliding scale will replace the flat rate tax of €7.53/hectolitre, with a rising tax linked to the sugar content of the drink, up to a ceiling of €20/hectolitre for drinks with more than 11g of added sugar per 100ml. This needs to be seen against the background of the projection of a 10% increase in the number of French people who are overweight in the next 10 years (3).
This is seen as part of a wider trend in government actions to curb sugar use in processed food products. In addition to government initiatives in the UK and France, governments in Ireland, Finland, Portugal, Spain and Estonia, are all introduced sliding tax rates based on the sugar content of drinks (3).
The move to reduce the sugar content of food and drink products is even gaining ground in the Middle East and Africa, in part driven by government excise taxes and in part by the introduction of a range of stevia based sweeteners to the market. In some cases, such as the UEA, this is set ‘to add 50% onto the price of sweetened beverages and 100% to energy drinks’ (5).
The WTO has argued that for sugar taxes to be effective retail prices have to be raised by 20% in order to generate ‘proportional reductions in consumption’ (3).
The move towards reduced sugar content of food and drink products is being assisted by the development of alternative sweeteners which are bettered suited to food processing activities. In September 2017 it was announced German researchers had succeeded in combining saccharin and cyclamate in ways which held at bay the ‘bitter taste’ of many artificial sweeteners when subject to high temperatures. This, when combined with other blending recipes for sweeteners, is seen as opening up new opportunities for the more extensive of alternative sweeteners in the food and drink manufacturing sector (6).
Meanwhile in reviewing the global sugar market situation, analysts at Green Pool have cut their forecasts for global sugar consumption ‘by more 700,000 tonnes, in the face of health concerns and sugar taxes’. This trend, along with expanded sugar production in the EU and elsewhere, is estimated to be contributing to a 9.8 million tonne sugar surplus for 2017/18. This is generating a stocks-to-use ratio of 48.5%, the highest level since 2005/06 (4).
Significantly the expansion of production underway in the EU is attributed to growers having been ‘guaranteed’ a minimum price for 2 to 3 years by beet processors, as major EU sugar companies jockey for market position in the post-production quota EU market (4).
| Comment and Analysis
The health based campaigns and policy initiatives to reduce the use sugar in food and drink products could pose challenges for some ACP sugar exporters, depending on the nature of the sugar market which their exports serve. Individual ACP sugar exporters will need to develop a better understanding of the uses to which their sugar exports are put, if they are to identify the likely impact of current trends towards the reduction of ‘hidden sugars’ in food and drink products on their current exports to the EU. Understanding the end-uses to which specific ACP sugar exports are put, will facilitate an assessment of the likely impact of current consumption trends on the marketing strategies of individual ACP suppliers and could potentially allow for the development of targeted market repositioning initiatives. According to market analysis from the Dutch organization CBI, Non-Centrifugal Sugar (NSC) or whole raw cane sugar ‘is growing in popularity as consumers become increasingly interested in natural and unrefined products’. In Europe CBI see’s the largest market for NCS being in southern Europe (Italy and Spain) which has ‘large populations of migrants form the Philippines…and Colombia’. CBI foresees continued growth of raw cane sugar demand in the EU, with a high projected increase in demand in Germany and strong growth in Italy, Spain and the United Kingdom. A trend towards the substitution of white sugar for brown sugar has also been identified, with brown sugar being perceived as healthier than white sugar (7). It is trends such as these which individual ACP sugar exporters may need to tap into in the face of declining overall demand for sugar in major EU markets arising from health campaigns focused on reducing the use of ‘hidden’ sugars in food and drink products. |
Sources:
(1) Beveragedaily.com, ‘Low sugar and GMO free foods resonate more with today’s health conscious consumer’, 31 October 2017
https://www.beveragedaily.com/Article/2017/10/30/Low-sugar-and-GMO-free-foods-resonate-more-with-today-s-health-conscious-consumer
(2) ‘Sweet deal? Campaign group slams meal combo’s sugar content’, 31 October 2017
https://www.foodnavigator.com/Article/2017/10/31/Sweet-deal-Campaign-group-slams-meal-combo-s-sugar-content
(3) Foodnavigator.com, ‘Industry hits out at scapegoating as France amends sugar tax’, 30 October 2017
https://www.foodnavigator.com/Article/2017/10/30/Industry-hits-out-at-scapegoating-as-France-amends-sugar-tax
(4) Agrimoney, ‘World sugar dynamics worst for bulls in at least 12 years says Green Pool’, 31 October 2017
https://www.agrimoney.com/am-evening-roundup/am-evening-roundup/world-sugar-dynamics-worst-for-bulls-in-at-least-12-years-says-green-pool-41759
(5) Foodnavigator.com, ‘Carrot trumps stick in quest to promote sugar re-formulation’, 1 November 2017
https://www.foodnavigator-asia.com/Article/2017/11/01/Carrot-trumps-stick-in-quest-to-promote-sugar-re-formulation
(6) Foodnavigator.com, ‘Sugar substitute blend’s ability to mask bitter taste a sweetener for food industry’, 28 September 2017
https://www.foodnavigator.com/Article/2017/09/29/Sugar-substitute-blend-s-ability-to-mask-bitter-taste-a-sweetener-for-food-industry
(7) CBI, ‘Exporting Raw cane Sugar to Europe’, 16 September 2016
https://www.cbi.eu/market-information/honey-sweeteners/raw-cane-sugar/
| Key words: Sugar, Health campaigns Area for Posting: Sugar |