While some segments of the free-from category have been experiencing exponential growth, recent data shows that overall global free-from and ‘reduced’ category sales has gone down 1% in the past year.
Consumer Attitudes
The sugar phenomenon has been linked to contradictory consumer attitudes towards its reduction in confectionery and other foods. While global health trends pushed many food companies towards reducing or eliminating sugar from their products, consumers are not keen on artificial sweeteners replacing sugar, as it contradicts the ‘natural ingredients’ trend and considerably alters the flavour profile. Nevertheless, many food companies have been pushed towards dealing with the sugar content in their products due to consumer demand and changing regulations worldwide. This is evidenced by the FDA’s new nutrition facts panel in the US demanding larger and bolder calorie declarations on packaging. Meanwhile in the UK there is an ongoing sugar tax debate.
When it comes to sweeteners, the biggest hurdle has been the fact that the majority of consumers do not enjoy the taste of sweeteners and do not want to compromise flavour for health benefits. Moreover, the numbers that tolerate no-sugar or low-sugar products varies drastically from market to market. For example, 44% of soft drink sales in the UK have no sugar and no calories, compared to 1% in Lithuania and 7% in Italy according to UNESDA which represents approximately 75% of European soft drink manufacturers. According to Sula, a German sweets manufacturer with a market presence across Europe, Germany’s sugar-free sweets market accounts for 30% compared to the UK where approximately 5% of manufacturers replace sugar with sweeteners.
This is especially true for more indulgent products such as chocolate, as consumers prefer sugar replaced by premium ingredients rather than sweeteners.
Sugar industry insights
As the global free-from and ‘reduced’ category experiences a slight downturn, it’s clear that addressing consumer demand for healthier options while maintaining product integrity and taste presents a complex challenge.
At Farrelly Mitchell, we believe that understanding market preferences and regulatory environments is crucial for businesses looking to adapt successfully. With our market intelligence & insights, market entry & development, and product innovation strategies, our consultants can help build a roadmap for navigating these intricate dynamics and thriving. To refine your product development and align your operations with shifting demand, contact our team today.
