Follow this article to explore beneficial information about the sugar-free beverage market!
Introduction
Consumers are demanding sugar-free or less-sugar food and beverages, a hot trend recently. Many manufacturers have introduced their new sugar-free drinks and they are greeted by customers. In this article, FGC will give you an overview of this potential market.
Definition and current situation of sugar-free beverage
Carbohydrates, including sugars, are one of the energy sources for our bodies. However, consuming too much sugar can result in many negative effects, including weight gain, acne, heart disease, and type 2 diabetes. Therefore, more and more sugar-free beverages are being introduced to the market. Sugar-free beverage refers to the drink versions that have been artificially sweetened with high-intensity sweeteners, so they have little or no calorie content. Thanks to this low-calorie feature, they become attractive options for those seeking a healthier choice while enjoying tasty ones.
Some kinds of sugar substitutes are sucralose, neotame, saccharin, aspartame, and stevia, which are usually healthier substitutes with the aim to reduce the overall sugar intake. The revenue of sugar-free beverages was recorded at about US$ 7.9 million in 2022, and is projected to grow to US$ 10.9 billion in 2030. During 2023-2030 period, the global sugar-free beverage market is expected to continue to grow at a CAGR of 4.2%.
Market segmentation of sugar-free beverage market
How is sugar-free beverage divided in the world? What to consider about its segmentation before entering this competitive market?
Based on the product types
One of the simple ways to divide sugar-free drinks is based on the product type. Sugar-free drinks cover nearly all kinds of beverages, including ready to drink tea, dairy, energy drinks, carbonated drinks, fruit and vegetable juices, and so on. Among them, zero-sugar RTD tea, carbonated drinks, and juices are witnessing robust growth in the upcoming years.
Based on the distribution channels
Another way to segment the sugar-free beverage market is depending on the distribution channel. The two main distribution channels now are store-based physical and non-store-based distribution channels. The physical channels include convenient stores, supermarkets, department stores, etc., and it seems that offline distribution channels still account for larger market share. However, with the rapid growth of the Internet and delivery industry, online shopping is getting more popular, and consumers have easier access to sugar-free beverages.
Based on regions
The trend of sugar-free drinks is booming all over the world, and it is divided into the North American, Asian Pacific, European, the Middle East and African regions. Among them, North America holds the largest market share, at 51.3% in 2022, with some big markets being the US, Canada, and Mexico. Meanwhile, the region with the fastest growth rate is Asia-Pacific, thanks to the rising disposable income, consumerism, and a large population. Following is Europe, where the health infrastructure is improved, and people are ready to spend more money on healthier products. The last regions with a gradual growth rate are Latin American, Middle East, and African regions.
Sugar-free beverage market’s promotions
The sugar-free beverage market has grown rapidly recently. So, what are the factors that drive its development?
More health-conscious consumers
In recent years, there has been an increase in the number of people suffering from obesity and diabetes. Therefore, consumers’ attitudes toward sugar are gradually changing, and they are paying more attention to health care and weight loss. People are looking for beverages containing more nutritional value rather than just sweetness. Especially after Covid-19 pandemic, consumers have raised their awareness about how to boost immunity and overall health, promoting the development of the sugar-free beverage market.
Because sugar-free drinks have few or no calories, it is favored by those on a diet and want to lose weight. The youngsters now care much about their appearance, and they are ready to invest more. The increasing concern among the young also boosts the market demand.
Taxes imposed on sugary beverages
The overconsumption of sugar-sweetened drinks is the main contributor of obesity and diabetes across all age groups. It is because an average can of sugary beverage includes up to 40 grams of sugar. The amount of sugar recommended by WHO is less than 10% of daily energy intake. Therefore, some governments have taken actions to reduce the sugar consumption by imposing taxes on sugar drinks. The increase of sugar taxation might become a factor to promote the growth of zero-sugar beverages.
Constant innovations of sugar-free beverage companies
Consumers are seeking not only low-calorie but also high nutritional value drinks. Understanding the preference of customers, beverage manufacturers constantly launch new flavor drinks while providing essential health benefits. Some examples of big companies in this race are Coca Cola, Pepsico, Inc, and The Kraft Heinz.
Sugar-free beverage market’s challenges
Sugar-free beverage market seems to be a potential opportunity; however, cutting sugar is not that easy. If your business is considering entering this market, you should also notice the factors that might restrict the growth of the sugar-free beverage market.
The high cost of sugar substitutes
One challenge of making sugar-free drinks is the price of sugar alternatives. In comparison to traditional sugar, most artificial sweeteners cost higher. Therefore, manufacturers need to figure out a strategy to optimize the price to become more competitive in this constantly expanding market. The high cost of ingredients also affects the total profit of your businesses.
Higher requirements regarding R&D and production
It cannot be denied that sugar plays an important role in creating a balanced flavor, making the beverage easy to drink for everyone. Therefore, to make a sugar-free drink, you cannot just remove the sugar but have to figure out a suitable replacement which still creates a harmonious and unique taste. Sugar also has its own flavors and other properties, not just sweetness, and so do alternative sweeteners.
In general, the alternatives are high-intensity sweeteners, so the precision is crucial. For instance, three grams of steviol glycosides are equivalent to one kilogram of sugar in terms of sweetness. Therefore, substituting any high-intensity sweeteners for sugar is not a simple task. To guarantee the taste, flavor, and texture of the drink, each formula requires rigorous and thorough research and testing, which takes a lot of time, money, and human resources.
Conclusion
Sugar-free beverage market is a potential market with a high growth rate. It has been promoted by customers’ attitudes, government’s support, and flexibility of beverage manufacturers. However, there are some restrictions when entering this market, such as high cost and requirements. If you are looking for a prestigious beverage supplier, contact FGC now to create your drink.
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Source:
https://www.baynsolutions.com/en/the-difficult-art-of-sugar-reduction/1116452
