Sugar Substitute Market Size, Share, and Growth Forecast for 2024 - 2031

Market Size and Share Analysis

The global sugar substitute market is projected to reach a size of US$ 17.2 Bn by 2024. It is anticipated to surge at a CAGR of 6.4% through the forecast period to reach a value of US$ 26.5 Bn by 2031. Rising awareness and prevalence of obesity-related issues is changing consumer preferences toward healthy and low-calorie foods.

As per the World Health Organization (WHO), one in eight people globally suffered from obesity in 2022. Since 1975, the prevalence of obesity has more than tripled. Sugar substitutes are gaining traction among the population worldwide due to their high sweetness and low-calorie content. They are preferred by individuals looking to manage their blood sugar levels, decrease weight, and reduce their calorie intake.

Several food brands are using sugar substitutes to promote their products as healthy. Individuals are showing a rising interest in sugar-free products, thereby providing these substitutes with an impetus for market growth. Food and beverage manufacturers are mainly adopting substitutes in their products as these enable them to meet the rising demand for sweetened products with zero sugar content.

Key Highlights of the Market

• Changing lifestyles and dietary habits are propelling demand for no sugar and zero calorie food and beverage options.
• Increasing awareness of the several risks of diabetes is raising focus on dental care and inclining people toward weight management, thereby pushing sales of sugar substitutes.
• Innovations in food science and technology have enabled manufacturers to develop sweeteners that perfectly mimic the taste and texture of traditional sugar.
• Plant-based sugar substitutes are witnessing growth owing to their health advantages like the prevention of non-communicable diseases, obesity, and digestive problems.
• Based on intensity, high-intensity sweeteners are predicted to hold a share 71% in 2024 as consumers look for alternatives that mimic the taste of conventional sugar.
• In terms of application, the food and beverages segment is estimated to witness a CAGR of 3.5% through 2031 as brands strive to cater to health conscious consumers.
• The U.S. is predicted to exhibit a CAGR of 3% through the assessment period as sugar alternatives are gaining traction due to their low calories.
• In Asia Pacific, China is anticipated to lead with a CAGR of 2.6% from 2024 to 2031 as the population is shifting toward healthy sweetener alternatives.

Market Attributes	Key Insights
Market Size (2024E)	US$ 17.2 Mn
Projected Market Value (2031F)	US$ 26.5 Mn
Global Market Growth Rate (CAGR 2024 to 2031)	6.4%
Historical Market Growth Rate (CAGR 2019 to 2023)	5.8%

U.S. Sugar Substitute Market Leads as Consumers Follow Strict Diets

The sugar substitute market share in the U.S. is predicted to witness a CAGR of 3% from 2024 to 2031. The country is showcasing a growing concern among consumers regarding health and wellness, especially sugar consumption. It is further directing them toward new substitutes of sugar. Increasing awareness regarding the adverse effects of excessive sugar intake has led individuals in the country to seek alternatives to conventional sugar.

Low-calorie or calorie-free alternatives are appealing to the population as these assist them in reducing their calorie intake and managing their weight. This feature alone is responsible for driving the popularity of these substitutes to sugar. It is especially evident among individuals that follow strict diet or weight management regimes. The widespread availability and use of sugar free molasses in packaged foods and beverages are set to continue to propel sales in the U.S.

China Sugar Substitute Market Skyrockets with Increasing Obesity Cases

China is anticipated to emerge as the leading country in Asia Pacific with a CAGR of 2.6% through 2031. The country is witnessing a rise in health consciousness among its population due to the ever-increasing number of diabetes and obesity cases. As consumers in China become aware of the detrimental effects of excessive sugar consumption, there is a growing demand for low-calorie and sugar-free food and beverages.

Substitutes to sugar provide artificial sweetness without adding any calories, thereby making them appealing to health-conscious consumers in the country. As the population in China becomes urbanized, the country is set to see a shift toward Western dietary habits, including low-calories and sugar-free products. This cultural change is further estimated to increase demand of substitutes in several foods and beverages.

High-intensity Sweeteners Gain Traction as Consumer Strive to Prevent Diabetes

Category	Market Share in 2024
Intensity- High-intensity Sweeteners	71%

High-intensity sweeteners are estimated to emerge as the dominating type in the market with a value share of 71% in 2024. These sweeteners are gaining traction as health-conscious consumers are looking for alternatives to conventional sugar. High-intensity sweeteners provide an ideal solution by offering sweetness without the calories.

Demand for high-intensity sweeteners is also being fueled by increasing number of people living with diabetes and rising concerns of obesity. In addition, the growing trend of low-calorie diets will likely create opportunities. Polyols sweeteners like xylitol, sorbitol, and erythritol exemplify this category, presenting a compelling alternative for consumers who prioritize natural sweetness.

Food and Beverage Companies Aim to Cater to Health-conscious Consumers

Category	CAGR through 2031
Application- Food and Beverages	3.5%

Based on application, the food and beverages industry is estimated to witness a CAGR of 3.5% in the forecast period. The popularity of sugar substitutes has increased as these are being extensively used in different food and drinks to meet the rising demand for healthy sweetener alternatives. Manufacturers are progressively using sugar substitutes in items like sugar-free drinks and snacks to provide low-calorie options that taste similar to traditional sugar products.

Market Introduction and Trend Analysis

Robust growth in the sugar substitute market is attributed to the rising awareness of health, increasing lifestyle diseases, and consumer preference for low calorie sweeteners. There is also a substantial rise in the number of people living with diabetes. Individuals across the globe are focusing on weight management. It is creating new opportunities to innovate novel, sustainable, and natural sweeteners that cater to health-conscious consumers.

The global market is ever changing where manufacturers are trying to offer alternatives to traditional sugar to health-conscious consumers and people with conditions like obesity and diabetes. Changing trends have resulted in people wanting sweetening options that taste like sugar but have fewer calories while addressing health concerns associated with sugar.

Consumers are demanding new substitutes of sugar that come in different categories like natural sweeteners, sugar alcohols, and artificial sweeteners. Brands are catering to these preferences and dietary needs by introducing novel products. For instance,

• In March 2024, Scotty’s Everyday launched its Allulose and Monk Fruit Sweetener Blend, a natural alternative to conventional sugar.

Evolving consumer preferences has led brands to dive into research and development activities. They are striving to find a balance between meeting consumer desire for sweetness in foods and beverages while keeping up with the latest health and wellness trends. It is further giving rise to new and innovative sweetening solutions.

The food and beverages industry is working toward improving product formulations without having to sacrifice on the taste of products. It is further opening new avenues for product diversification and stevia products industry expansion.

Historical Growth and Course Ahead

The global sugar substitute market growth remained positive at a CAGR of 5.8% during the historical period ranging from 2019 to 2023. The COVID-19 pandemic increased public consciousness toward the importance of maintaining a healthy immune system. Individuals also demanded weight management plans, thereby accelerating the need for healthy alternatives to everything including sugar.

Lockdowns induced by the pandemic engaged people in home cooking and baking. It led to an increasing demand for healthy ingredients in recipes during that time, including substitutes to sugar. According to the U.S. Department of Agriculture, sugar consumption in New York slumped by 25% in 2021 compared to the previous year.

The industry attracted substantial investments from private and public sectors, resulting in the development of new product lines. These also led to aggressive marketing strategies and expansion of distribution channels.

The popularity of brown sugar substitutes for diabetics increased their availability in mainstream retail stores, thereby resulting in high sales of the products. Prominent food and beverage companies started to incorporate a broad range of sugar substitutes in a wide array of products, including baked goods, soft drinks, and ice creams. For instance,

• In March 2022, Cargill launched its stevia products with EverSweet + ClearFlo technology and a more refined flavor. This novel system combines stevia sweetener with a distinct flavor. It has several benefits such as flavor modification, increased solubility and stability, and enhanced dispersion in compositions.

Market Growth Drivers

Rising Emphasis on Health Issues to Boost Growth in the Market

Increasing health concerns, specifically related to diabetes and obesity, are driving robust growth in the sugar substitute market. Consumers are becoming aware of the negative health effects of consuming too much sugar and are, hence seeking healthier alternatives. As a result, artificial sweeteners, natural sugar substitutes, and sugar alcohols are gaining popularity as they provide sweetness with less calories. Growing health consciousness is changing consumer preferences and driving the market toward innovative sweetening solutions, leading to the industry's upward growth.

Changing Dietary Preferences to Positively Influence Adoption

The sugar alternatives market is being transformed by changing dietary preferences, which are influenced by a global focus on wellness and healthy living. Consumers are actively looking for alternatives to sugar that are low in calories and free of sugar, as they strive to maintain a balanced and nutritious diet.

The rapid shift in mind-set is particularly noticeable among the younger population which is prioritizing healthy choices. As the desire for reduced sugar intake gains popularity, sugar alternatives are set to witness an increased demand, especially in beverages, baked goods, and dairy products.

Market Restraining Factors

Stringent Regulations to Make Compliance Difficult

Manufacturers in the keto friendly sweeteners industry are facing challenges in dealing with complex and constantly changing regulations. Meeting the several international and regional regulations related to food additives, labelling, and health claims is becoming a key obstacle. Health authorities require thorough safety assessments, and different standards in various markets make compliance difficult.

Sugar substitute manufacturers need to invest a substantial amount in research and testing to meet these regulatory requirements, which often result in high costs and product delays. It is hence essential for brands to effectively address these regulatory hurdles to gain market access. They are set to focus on building consumer trust and maintaining growth in this dynamic and heavily regulated industry.

Market Growth Opportunities

Manufacturers Launch Plant-based Sweeteners to Attract Consumers

Modern consumers are rapidly turning toward healthy, sustainable, and natural alternatives to sugar. Hence, manufacturers in the food and beverage industry are swiftly adopting novel product formulations and sweeteners. These product innovations are vital in differentiating brands. Businesses are introducing novel formulations like allulose, blended sweeteners, and sugar alcohols to meet consumer demand and stand out in the industry.

They are also innovating sugar alternatives that provide full flavor profile of traditional sugar. They aim to offer their consumer sugar-like experience by adding taste enhancers and other flavor components that mask the undesirable aftertaste of sugar sweeteners. Companies are further exploring a variety of plant-based sweeteners like lucuma, coconut sugar, and yacon syrup that have low glycemic indices and high antioxidant content.

Collaborative Efforts to Offer Opportunities for Revenue Generation

Collaborative partnerships offer a great opportunity for expansion and revenue generation. By forming strategic alliances with food and beverage companies, retailers, or health-focused brands, sugar substitute manufacturers can tap into new distribution channels. At the same time, they can increase the visibility of their products.

Partnering with research institutions or ingredient suppliers can assist in speeding up innovation and getting access to the latest technologies. Through these collaborative networks, sugar alternatives manufacturers can benefit from shared resources, expertise, and market knowledge, leading to growth and a robust position in the competitive industry.

Competitive Landscape for the Sugar Substitute Market

The natural sweetener industry is currently undergoing significant changes due to evolving consumer preferences and innovations in technology. The industry offers a variety of substitutes, both nutritive and non-nutritive, such as sugar alcohol and artificial sweeteners, to cater to different tastes and health-conscious choices.

Ongoing research and innovation in the landscape is addressing the issue of taste differences and health concerns. The future of the sugar replacement market looks promising, with a focus on taste, health, and sustainability, making it an attractive area for strategic investments. Key players need to be flexible, responsive to changing consumer preferences, and skilled at utilizing technological developments to succeed in this dynamic and evolving market.

Recent Industry Developments

• In November 2024, Arizona-based Wisdom Natural Brands announced the acquisition of Drizzle Honey, extending the sweetener brand’s portfolio while leveraging growth in the honey category.
• In July 2024, Chile-based NotCo launched its new zero sugar protein drinks in funky flavors, transforming the sports nutrition segment.
• In January 2024, Ingredion, based in the U.S., partnered with an Israel-based firm, Better Juice to extend the rollout of its sugar-reducing technology in the U.S.
• In November 2023, Tate and Lyle PLC, headquartered in London, launched ERYTESSE, a sugar alternative.
• In July 2023, London-based Tate and Lyle PLC introduced TASTEVA SOL stevia sweetener, a new addition to its sweetener portfolio. The new ingredient is premium-tasting stevia with 200x the solubility of Reb M and D products.
• In April 2023, California-based Sweegen Inc. launched a protein technology containing brazzein, thaumatin II, and other proteins to help improve and modulate sweet flavor.
• In January 2023, the U.S. Food and Drug Administration (FDA) approved allulose as a food additive. This sugar alternative has a sweetness that is similar to conventional sugar but does not raise blood sugar levels.

Sugar Substitute Industry Report Scope

Attributes	Details
Forecast Period	2024 to 2031
Historical Data Available for	2019 to 2023
Market Analysis	US$ Billion for Value
Key Regions Covered	North America Europe East Asia South Asia and Pacific Middle East and Africa Latin America
Key Market Segments Covered	Source Type Product Type Application Region
Key Companies Profiled in the Report	Tate and Lyle Cargill Archer Daniels Midland Company (ADM) Ingredion Incorporated Roquette Frères Ajinomoto Co., Inc. JK Sucralose Inc. The NutraSweet Company PureCircle E. I. DuPont De Nemours
Report Coverage	Market Forecast and Trends Company Share Analysis Competitive Intelligence DROT Analysis Market Dynamics and Challenges Strategic Growth Initiatives
Customization and Pricing	Available upon request

Sugar Substitute Industry Segmentation

By Product Type

• HFCS
• Sugar Alcohols
• Saccharin
• Aspartame
• Cyclamate
• Sucralose
• Allulose
• Stevia
• Misc.
  • Ace-K
  • Monk fruit
  • Neotame

By Intensity

• High intensity
• Low intensity

By Application

• Food
• Beverage
• Healthcare and Personal Care
• Others

By Distribution

• B2B
• B2C
  • Hypermarkets/Supermarkets
  • Speciality Stores
  • Pharmacies and Drugstores
  • Online Retail
  • Others

By Region

• North America
• Europe
• East Asia
• South Asia and Pacific
• Latin America
• Middle East and Africa

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