Alternative Sweetener Market - Global Outlook & Forecast 2023-2028

MARKET INSIGHTS

The global alternative sweetener market was valued at USD 10 million in 2022 and is expected to reach USD 13.84 million by 2028, growing at a CAGR of 5.56% during the forecast period. The market is experiencing a significant growth rate owing to rising lifestyle disorders, such as diabetes, heart disease, and other chronic diseases, which are a major threat to global health. Further, with the rising concerns about obesity, the alternative sweetener market is gaining momentum as individuals prioritize their health and have started having healthy dietary choices. For instance, in 2022, a survey conducted by the International Food Information Council found that 72% of Americans are aiming to cut down or eliminate sugar from their diet, and 23% are picking low-calorie alternatives, which is after the extensive adoption of alternative sweeteners in the U.S. as well as in other countries.

The rising advancements and innovative product development, such as cost-effectiveness, nutritional benefits, taste, reduced bulk, preservative qualities, and others, are increasing the growth of the alternative sweetener market. Several vendors are increasingly adopting these trends and developing their product offerings by offering low-calorie alternatives with high and low sweetness levels. For instance, in 2022, Tate & Lyle announced the launch of ERYTESSE to its sweetener portfolio. This product contains 70% of the sweetness of sucrose with zero calories.

The end-user industries also increasingly use alternative sweeteners by offering sugar-free and low-calorie snacks and beverages to encourage healthy diet and lifestyle choices. Hence, new methods and techniques are adopted to minimize sugar without impacting the flavors. In April 2023, Planet Bake introduced grain-free, sugar-free, vegan doughnut products utilizing allulose for natural sweetness. Further, in March 2023, Highkey, a low-sugar baked food company, launched a sandwich cookie layered with two crispy chocolate and vanilla crème filling made using alternative sweeteners such as Erythritol and Allulose.

MARKET TRENDS & DRIVERS

Diabetes Health Awareness Among Consumers
As per WHO, there are around 400 million people in the world who have diabetes. Approximately 12% of global healthcare expenditure accounts for treating these conditions. Consumers are also becoming more concerned about preventing such diseases and improving their lifestyle by making healthy diet choices. Hence, such factors are propelling the growth of the alternative sweetener market.

Rising Prevalence Obesity
One of the significant factors contributing to obesity is the growing intake of total and added sugar. According to WHO, obesity affects approximately 1 billion people, encompassing around 650 million adults, 340 million adolescents, and 39 million children, and it is anticipated that the growing number of obese individuals is likely to be around 167 million people, including both adults and children, by 2025. Consequently, individuals are becoming more aware of the health problems related to obesity and choosing healthy lifestyles, which is anticipated to increase the consumption of alternative sweeteners.

INDUSTRY RESTRAINTS

High Price of Alternative Sweeteners
One major factor restraining the demand for alternative sweeteners is the steep cost of these sweeteners’ ingredients. Alternative sweeteners like Honey, Mannitol, and Maltose syrup are available at higher prices than regular sugar. For example, the price of sugar is around four times less compared to honey. Further, varieties such as Ulmo or Manuka have even higher prices. However, the widespread adoption of modern large-scale production techniques plays a fundamental role in lowering the overall commodity price of sugar.

SEGMENTATION INSIGHTS

INSIGHTS BY SOURCE
The natural source segment asserted its dominance in the global alternative sweetener market in 2022. The surge in natural sweeteners can be attributed to the increasing health and wellness trend among consumers, who are becoming more health conscious. A heightened awareness of the potential health risks associated with excessive sugar consumption, such as obesity, diabetes, and tooth decay, is prompting individuals to seek healthier sweetener alternatives. Concurrently, the synthetic segment is experiencing rapid growth in the global alternative sweetener market and is projected to continue this trend in the foreseeable future. The demand for synthetic alternative sweeteners is rising because they provide sweetness without adding many calories, making them an appealing choice for individuals aiming to maintain a healthy lifestyle. These sweeteners are readily available in various products, including beverages, desserts, and packaged foods, offering consumers a convenient option.

INSIGHTS BY PRODUCT TYPE
The global alternative sweetener market by product type is segmented as high fructose syrup, high-intensity, and low-intensity. In 2022, high-fructose syrup (HFCS) held the largest market share. The growth is attributed to several key factors, such as the competitive pricing of HFCS compared to other sweetener categories, contributing to cost savings in the final products. Furthermore, favorable import and export tariffs on HFCS, along with subsidies provided for its primary ingredient, corn, particularly in countries like the United States, are additional catalysts propelling the production of HFCS.

INSIGHTS BY APPLICATION
The food and beverage sector dominated the global alternative sweetener market in 2022 as it has several applications in the industry. Further, it also has applications in bakeries, confectionery, and even nutritional supplements aimed at reducing sugar content and cutting down on calories and carbohydrates; this is largely attributed to the growing consumer preference for low-calorie sweeteners. There is a significant surge in demand to produce health-conscious beverages, such as natural fruit juices, reflecting an increasing awareness of the profound impact of diet on consumer health. Therefore, consumers are encouraged to vary their consumption patterns, with more individuals actively seeking healthier alternatives.

GEOGRAPHICAL ANALYSIS

APAC held the largest global alternative sweetener market share in 2022 and is currently experiencing significant growth driven by several key factors, such as the growth and expansion of the food and beverages industry, especially in emerging economies. The region presents lucrative opportunities for key manufacturers, thanks to the presence of a wide range of suppliers and producers. Additionally, factors such as a high economic growth rate, an increase in purchasing power, and the adoption of new dietary habits, including the consumption of low-calorie foods, beverages, and sodas, all contribute to the robust growth of the industry in this region.

North America held a significant share of the global alternative sweetener market, primarily due to the increasing adoption of healthy dietary habits. The growing awareness regarding the detrimental effects of excessive sugar consumption plays a pivotal role in driving industry growth. These factors collectively create significant opportunities for low-calorie sweeteners, particularly in the bakery, food & beverage (F&B), and dairy industries. According to the US Census Bureau, preferred brands of alternative sweeteners include Splenda, Sweet'N Low, Stevia in the Raw, among others.

VENDOR LANDSCAPE

The global alternative sweetener market exhibits a high degree of fragmentation, with participation from numerous local, regional, and multinational vendors on a global scale. However, it's worth noting that the number of international players is relatively limited, and the growing trend toward incorporating natural ingredients in food products has led to numerous domestic and local vendors in the industry. The entry of new players is anticipated to intensify competition within the alternative sweetener market further. During the forecast period, the industry is poised to become exceptionally competitive, with vendors striving to establish their market presence through extensive market penetration.

Key global alternative sweetener market players include Cargill Incorporated, Archer-Daniels-Midland Company (ADM), and Heartland Food Products Group. Brands that offer organic and natural products in sustainable and ethically responsible packaging are anticipated to achieve greater success, particularly among millennial consumers. An essential focus for these brands should be on providing transparency, which is increasingly seen as a fundamental requirement by a significant portion of the consumer base.