Each year more than 120 million tons of sugar is produced from sugar cane and sugar beets, and the role of sugar, as well as sweeteners and substitutes, is inextricably intertwined with the economic well being of nations.
Consumers are increasingly concerned with diabetes, weight gain, obesity-related disorders and dental caries. These are shaping a need for manufacturers and food/beverage processors to reconsider what additives they use in their products and what alterations need to be made to meet consumer demand for something sweet that is low in calories or non-carbohydrate. As these markets change to reflect consumer preferences and concerns, a thorough understanding of the significance of this industry becomes vital to its financial success.
According to a soon-to-be-released report from Business Communications Company, Inc. (www.bccresearch.com) RGA-102R Sugars and Sweeteners: Trends, Developments in Processed Foods and Beverages, the U.S. market for sugars and sweeteners was $9.3 billion in 2002. Estimated to increase at an average annual growth rate (AAGR) of 2.3 percent, this market is forecast to reach $10.4 billion by 2007.
World production rising
The world production of sugar continues to rise; 135.1 million tons in 2002, up 2.7 percent from the previous year and estimated to reach 145.1 million tons by 2007. At that rate, we could see over 150 million tons of sugar before the next decade. The total value of world sugar production increased 3.6 percent from 2001, to $37.3 billion. Next year alone, the value will rise 5.5 percent, with additional steady growth of 1.5 percent AAGR until 2007. The U.S. market accounts for 6.4 percent of the world total sugar production at 8.6 million tons, up approximately 6.3 percent from last year, with an AAGR of 2.3 percent over the next five years and an ending value of $4.3 billion by 2007.
Sugar consumption is also steadily on the rise, though it has shifted from table-top use to incorporation in processed foods and beverages. More than 80 percent of the market is in countries like Canada and the U.S. Total global sugar consumption amounted to 27 million tons in 2002, accounting for only about 23.7 percent of production. Consumption is expected to grow at an estimated AAGR of 1.7 percent for the next five years. In contrast, U.S. sugar consumption was up from last year's total of 9.9 million tons, to 10.2 million in 2002, or 117.6 percent of the total sugar produced in the U.S. Clearly, the U.S. relies much on its imports from other major sugar-producing countries, and its own surplus supplies.
The worldwide total value of the sweetener market in 2002 was estimated at $10.92 billion. Making up the bulk of that total was corn sweetener, estimated at approximately $9.7 billion. Although sugar alcohols and HIS are still relatively new and unexplored sweeteners, their presence in the market is growing rapidly. Total global sugar alcohol production was estimated at 836,905 tons, up 2.2 percent over last year. The U.S. made up 57 percent of that figure, or approximately 476,692 tons. World HIS production was estimated at 26,051 tons, with the U.S. making nearly 69 percent of that total, or 18,019 tons in 2002.
Sugar alcohol consumption 376,640 tons
U.S. consumption of sugar alcohols was estimated at 376,640 tons, nearly 79 percent of the total production of these sweeteners. The estimated consumption of HIS in the U.S. was 13,985 tons, or more than 77 percent of the total produced. In the next five years consumption of sugar alcohols and HIS is slated to rise as much as 15 percent as new sweeteners make their debut, and improvements come about in those already in wide use.
Sorbitol made up the largest percentage of sugar alcohols, with more than 54 percent of the total production in this market, but newcomer tagatose is waiting in the wings with a fast growth rate estimated at more than 20 to 25 percent within five years. Other sugar alcohols including Erythritol, maltitol and xylitol have also increased their share of this market. Aspartame still holds much of the HIS production in the U.S., making up almost half of the total production and consumption. But it will soon see strong competition as new HIS neotame, approved by the FDA in June of 2002, begins production in 2003. Sucralose and Ace-K continue to compete for the remaining HIS market as long-time sweetener saccharin continues to decline.
In addition to the rising cost of sugar, a number of health issues, concern about weight gain and obesity, diabetes and the American passion for self-improvement have all contributed to the rise of the sweetener and sugar-free sweetener industries. With over 163,000,000 Americans considered overweight, 16 million suffering from diabetes and many millions more interested in curtailing sugar as a way to better health, a ready and captive market for low sugar sweeteners and HIS has developed.
U.S. Production for Sugar and Sweeteners, through 2007 ($ Millions) 2002 2007 AAGR percent 2002-2007 Sugar 3,870 4,330 2.3 Sweeteners* 4,925 5,496 2.2 HIS 520 601 2.9 Total 9,315 10,427 2.3 * Includes HFCS, corn sweeteners, sugar alcohols and others such as honey and maple syrup. Source: BCC, Inc.
U.S. Production for Sugar and Sweeteners, through 2007
* Includes HFCS, corn sweeteners, sugar alcohols and others such as honey and maple syrup.
Source: BCC, Inc.