The sugar industry in the UK is facing a challenging time according to a new report from Mintel. Last year it suffered a sales drop of 14%, while nearly half of British consumers reconsidered using sugar.
The fortunes of the sugar market had been turbulent in the last couple of years. While sales dipped 2% in 2013, it accelerated to a further 14% last year which accompanied a 9% decline in volume, the report said.
During the same period, 46% of consumers said they had monitored or reduced their sugar intake. There was also a feeling of mistrust towards manufacturers. A large majority of consumers (71%) believed that the food and drink industry should do more to reduce sugar in their products with three-quarters thinking that food and drink companies should make it easier to understand how much sugar is in their products.
The report further highlighted a direct link between media coverage on “how sugar affects your health” to consumer behaviour. A sizeable 43% of the population said they had noticed an increase in such media coverage with 62% of those consumers more likely to have cut their sugar intake, it said.
Senior food and drink analyst at Mintel, Emma Clifford, said now was a good time for sugar manufacturers to build consumer trust. “Consumers are expecting the food industry to respond which shows that there are plenty of opportunities for companies to really make themselves stand out on this front. However, companies have also got to be wary of a potential consumer backlash against reformulations, if taste is seen to be sacrificed.”
She added: “It also suggests that being shown in a positive light in the media, for example for leading the way with reformulations using natural sweeteners, could help to boost positive perceptions and sales.”
The decline in the retail sugar market is expected to continue over the next three years and sales are forecast to fall 13% in the next five years. However, the rate of decline is anticipated to steadily abate, with the market stabilising between 2017 and 2018 at £258m (€293m), the report added.
Most consumers think 'natural' sugars are healthy
In what might come as good news for manufacturers, the report found 55% of consumers thought products that were high in natural sugars to still be healthy. It added that while 51% thought that products made with honey were better than those made with sugar, 37% considered unrefined sugar as better than white sugar.
“This indicates that reformulations which simply move away from white sugar can help to boost the perceived health credentials of products without resorting to sweeteners,” Clifford said.
Natural sweeteners a hit
Sales in the sweeteners market fell by 5% in 2013, with the same rate of decline anticipated for 2014, with estimated sales of £57m (€64.77m). The artificial sweeteners segment captures just 16% of the overall sugar and sweeteners market.
The report added that British consumers remained wary of artificial sweeteners (49%), they were more open to naturally sourced sweeteners -- only 10% of people think natural sweeteners are bad for them.
“Naturalness appears to have become almost synonymous with healthiness and elicits trust from consumers, while anything artificial people tend to be wary of,” said Clifford.