Rabobank says consumer shift away from sugar will have long-term ramifications for sector

Published: 08/08/2017, 5:21:21 PM

A new report from Rabobank identifies consumers' shift away from sugar consumption as an important driver behind dramatic changes in the food and beverage industry. These changes will have long-term ramifications, including a likely slowdown in the worldwide sugar market, reports Sugaronline.

The report, "Sweetness and Lite," by Rabobank Global Strategist Andy Duff and Rabobank Senior Analyst Nick Fereday indicates a combination of changing preferences, product reformulations and government pressure have caused structural changes in the way sugar is perceived and consumed worldwide.

"The consumer shift away from sugar has become a global trend," Fereday said. "This is a big deal for the sugar industry and cannot be dismissed as a passing fad or wished away."

While they do not intend to act as "judge and jury" on sugar and related sweeteners in the report, Duff and Fereday identified the primary reasons why consumers are moving away from sugar, including:

  • More consumers adopting low-sugar diets instead of ones that focus just on fats because they see sugar and refined carbohydrates as the main culprits in obesity.
  • The increase in legislation penalizing sugar-laden beverages, such as a tax on sugary soft drinks in countries such as Chile, Egypt, Mexico, South Africa and Thailand and in major metropolitan areas in the U.S.

In the report, the authors detailed how companies in the food industry are responding, including overhauling ingredients, decreasing portion sizes and diversifying their corporate portfolios.

Duff and Fereday estimate that, if initiatives by companies and governments were to achieve a significant (5 percent or above) reduction in global food and beverage sector sugar use over a two- to three-year implementation period, it would offset much of the expected global growth in consumption during this period.

They also said the outlook for industrial sugar use depends heavily on consumption trends in emerging markets.

"The rate of growth of global sugar consumption in the coming 15 years is likely to be lower than the growth rate seen in the last 15 years," Duff said.