The global natural sugar substitutes market size to reach USD 4.3 billion in 2025, growing at a CAGR of 4% during the forecast period. The natural sugar substitutes market growth is linked to the preference for organic and healthy foods by consumers, the impact of clean labels on consumer buying behavior, and the growing concern over sustainable production processes. The market is further gaining new grounds owing to the rise in obesity and diabetic levels across the world and the growth of the health-conscious population. The growing demand for naturally sweetened food items products, including functional water, confectionary items, dairy products, and juices, particularly in the health-conscious consumer segment, which perceives natural substitutes as an alternative to sugar-laden foods, is crucial for the growth of the natural sugar substitutes market. There is an increasing acceptance of clean labels and beverages with free-from and sustainable brands. Moreover, the global market is witnessing a widespread acceptance of sustainability labels, which become crucial for plant-based sugar substitutes such as stevia extract. Erythritol and stevia are the fastest-growing natural sweetener.
The demand for natural and organic products is witnessing robust growth of over 25% globally as consumers are increasingly seeking several healthy ingredients to incorporate into their diet. The COVID-19 pandemic has increased consumer awareness of the relationship between nutrition and health. This has resulted in the surge in products that are perceived as healthier and safer than conventional alternatives.
- The global natural sugar market will grow due to the increased inclination of modern consumers to pursue a healthy lifestyle with an increased focus on the sourcing of material and sustainable manufacturing.
- In 2019, 22% of US consumers were restricting their sugar intake, and a staggering 52% actively avoided artificial sweeteners & substitutes.
- APAC and the Middle East will witness high dynamism during the forecast period, whereas North America and Europe are likely to observe a slower growth than other emerging markets.
- The demand for sugar substitutes is associated with the current traction among consumers to opt for non-conventional food ingredients to maintain healthier lifestyles.
- The natural sugar substitutes market in India is likely to grow at a CAGR of over 5% during the period 2019-2025 owing to the increased disposable incomes and the growth of the health-conscious population.
INSIGHTS BY PRODUCT
The global sorbitol segment is expected to grow at a CAGR of close to 5% during 2020–2025. The increasing application of sorbitol in packaged foods and beverages to provide sweetness, texture, and moisture retention is a significant factor contributing to the growth of the market. As there is an increasing awareness among the consumers to reduce high sugar consumption, manufacturers are substituting it with substitutes such as sorbitol to lower the calorie count. The widespread epidemic of obesity and diabetes in many western countries has led to the growing popularity of sorbitol.
Xylitol, which accounted for the second-largest share of the natural sugar substitutes market in 2019, is a sugar alcohol, which is found in small quantities in several fruits and vegetables, hence is considered as a natural product. Xylitol can boost dental health and prevent tooth decay. Thus, xylitol is an ingredient in sugar-free functional chewing gums, which reduces harmful mouth bacteria growth by 27–75%. Xylitol is used as a sweetening agent in chewing gum for children, which diminishes ear infection and prevent candida yeast infection. Xylitol also increases collagen production and reduces the risk of osteoporosis. Therefore, owing to these multiple benefits, Xylitol is used as a critical sweetening agent in food and beverages, personal health, and pharmaceutical products.
INSIGHTS BY FORM
The liquid segment accounted for the largest share of the market, contributing approximately 47% in 2019. Liquid substitutes are developed from different sources, including corn, honey, and others. They are the perfect alternatives to dry sugar in beverages and hot drinks. Powdered substitutes are multi-purpose products that can be used both as sweetening agents in food products and also as tabletop substitutes.
The usage of powdered sugar in food is highly regulated by government bodies such as the FDA. The rising health-conscious population is particularly driving the demand for powdered natural sugar substitutes. Further, they are also offering high growth opportunities in developed economies where the presence of the health-conscious population is comparatively higher than developing countries. Powdered sugar accounted for 28% of the natural sugar substitutes market share, followed by solid or crystal sugar, which accounted for 25% of the shares in 2019. Similar to powder, solid sugar is also being used as a tabletop sweetener as well as in baking and food preparation. The global market for solid natural sweeteners is also expected to grow at a higher rate, being a comparatively smaller market.
INSIGHTS BY END-USER
The beverage industry dominated the global natural sugar substitutes market in 2019, constituting a market share of about 43%. The implementation of sugar taxes on sugar-sweetened beverages by several governmental bodies and the increasing consumer awareness of the impact of high added sugar beverages are driving the demand for no or low-calorie beverages containing natural ingredients such as natural sweetening agents including stevia-sweetened drinks.
The global natural food sugar substitute market is expected to reach over $890 million in 2025. As the number of diseases due to excessive consumption of sugar becomes an increasing concern among the general populace, the search for healthier substitutes for natural intense sweeteners with applications in food preparation has increased substantially. The traction of consumers toward healthier eating preferences has been evident with their inclination toward checking ingredients labels and growing intake of organic produce and low carbohydrate diets.
INSIGHTS BY GEOGRAPHY
The European food sugar substitute market is dominated by sugar, which accounts for more than 70% of the market share. However, currently, the consumption of substitutes is increasing rapidly in the region. This can be attributed to consumer awareness, government regulations to reduce sugar consumption, and widespread application in several health & wellness food products in the industry. The other major reason for the growth of substitutes is increasing obese, overweight, and diabetic patients in Europe. Most key players bring innovative products, especially stevia-derived products, to meet the growing consumer demand for non-caloric natural sweeteners in both food and beverages.
The global natural sugar substitute market is highly fragmented due to several local, regional, and multinational vendors worldwide. The number of international players is, however, limited, and the growing trend of natural ingredients in food products has given rise to numerous domestic and local vendors in the market. New players are expected to increase, which will further escalate the intensity of competition in the natural sugar substitute market. The industry is also likely to become fiercely competitive in the coming years, where vendors will try to establish their market share with maximum penetration. Brands offering organic and natural products in sustainable and ethical packaging are expected to become more successful among millennial consumers. They should focus on transparency as a primary requirement among the majority of the consumer base. Cargill Incorporated, Archer-Daniels-Midland Company (ADM), PureCircle, Tate & Lyle, Whole Earth Sweetener are the key players in the market.
The natural sugar substitutes market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:
By Product Type
- Confectionary & Diary
- Carbonated Drinks
- Fruits Juices & Drinks
- Powdered Drinks & Mixes
- Personal Care
- North America
- Latin America
- Middle East & Africa