Industry: Food and Beverages
Published Date: March-2025
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Number of Pages: 185
Report ID: PMRREP17713
The global tagatose market size is anticipated to reach a value of US$ 178.8 Mn in 2025 and is set to witness a CAGR of 5.3% from 2025 to 2032. The market will likely attain a value of US$ 238.6 Mn in 2032.
Think about a sugar alternative that has only 38% of the calories but is 90% as sweet as sugar. Add to that the fact that it has a low glycemic index, has prebiotic properties, and caramelizes similarly to regular sugar. Enter tagatose, a unique natural sweetener that is subtly transforming the food and beverages industry.
Tagatose is becoming popular as the need for low-calorie, functional sweeteners rises worldwide due to increasing concerns of obesity and diabetes. The U.S. Food and Drug Administration (FDA)’s Generally Recognized as Safe (GRAS) status as well as the European Food Safety Authority’s support have surged its adoption in various products, including baked goods and soft drinks. It is estimated that innovations in production technologies would make tagatose manufacturing more affordable, thereby enhancing its mass-market accessibility.
Key Highlights of the Tagatose Industry
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Global Market Attributes |
Key Insights |
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Tagatose Market Size (2025E) |
US$ 178.8 Mn |
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Market Value Forecast (2032F) |
US$ 238.6 Mn |
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Projected Growth (CAGR 2025 to 2032) |
5.3% |
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Historical Market Growth (CAGR 2019 to 2024) |
4.2% |
Historical Period Witnessed Limited Adoption Backed by Niche Positioning of Tagatose
As per Persistence Market Research, in the historical period from 2019 to 2024, the global tagatose industry witnessed an average CAGR of around 4.2%. The industry experienced fluctuations in terms of growth during this period.
Due to its high manufacturing costs and limited supply, tagatose was regarded as a niche sugar substitute in 2019 and was mainly utilized in limited applications. With this rare substitute costing 3 to 5 times as much as traditional sweeteners like erythritol and stevia, price barriers prevented widespread acceptance, despite the market's gradual expansion as food producers demanded alternatives to high-calorie sweeteners. However, when prebiotic and low-GI sweeteners gained popularity among researchers, tagatose emerged as a viable contender for the functional food market.
In 2020, the COVID-19 pandemic created both setbacks and opportunities. It boosted demand for immunity-supporting, healthy food items, thereby propelling sales of functional ingredients, including tagatose. However, manufacturers found it challenging to scale up due to limited production capacity caused by supply chain issues and shortages of raw materials. As a harbinger of possible future growth, regulatory developments began to improve, with countries like China permitting tagatose for use in specific culinary applications.
Forecast Period to Boost Tagatose Use with WHO Guidelines Changing Sweetener Choices
From 2025 to 2032, the tagatose industry is likely to showcase a CAGR of 5.3%. The food and beverage industry is under constant pressure to discover new sugar alternatives. Although sucrose has long been regarded as an ideal option for sweetening food and beverages, companies have easy access to a variety of alternatives. However, when it comes to flavor and functionality, these substitutes are inferior to sucrose in product compositions.
The World Health Organization (WHO), for example, recently implemented new guidelines stating that non-sugar sweeteners (NSS) should not be used to regulate body weight or lower the risk of noncommunicable illnesses. This has boosted demand for sugar substitutes with fewer calories that do not compromise on functionality or taste.
Tagatose is hence projected to gain traction in the foreseeable future. Its superior adaptability is considered one of its most prominent features. It has nearly the same appearance as granulated sugar and can be used directly in place of sucrose in a wide range of products, such as dairy items, confectionery, baked goods, and beverages.
Growth Driver
Rising Need for Diabetic-friendly Sugar Substitutes to Spur Market Growth
The global push for healthy sugar alternatives is set to propel tagatose demand through 2032. Low-glycemic sweeteners are anticipated to gain popularity across the globe as the prevalence of obesity and diabetes rises. As of 2021, more than 537 million adults globally are living with diabetes, and this number is set to rise to 643 million by 2030.
With a glycemic index of only 3, tagatose is far more suitable for diabetic-friendly food and beverages than regular sugar. It is being investigated by leading food producers as a clean-label substitute that has the sweetness of sugar without raising blood sugar levels. For instance, as part of its national health initiatives, the government of South Korea has promoted low-GI sweeteners, which has increased demand for products containing tagatose.
Competitive Pricing of Erythritol and Allulose May Lower Large-scale Adoption of Tagatose
Due to high production costs and limited large-scale manufacturing capabilities, there is a considerable drop in the market for tagatose. The current method of producing this rare sugar is highly inefficient and costly. It mainly depends on sophisticated microbial fermentation or the enzymatic conversion of lactose from dairy sources, despite its potential advantages as a low-calorie, low-glycemic sugar substitute.
It has limited the use of tagatose in mass-market food and beverages by keeping its price much higher than that of common sugar replacements like erythritol or allulose. For example, tagatose can cost more than US$ 10 per kilogram, which makes it less competitive for large-scale applications than erythritol, which typically costs US$ 3 to US$ 4 per kilogram.
Applications of Tagatose to Expand to Functional Food and Medical Sectors with Increasing Research Activities
Tagatose is becoming popular for its potential health advantages beyond metabolic wellness, in addition to its appeal as a low-calorie, low-glycemic sugar substitute. Food and beverage companies are anticipated to seek ingredients that provide both health benefits and unique taste. Various research activities are taking place worldwide to broaden the application of tagatose.
According to a study from the University of Connecticut published in February 2025, tagatose has potential for reducing Clostridium difficile (C. difficile) infections, especially those that are resistant to antibiotics. As per a mouse model pilot study, it may provide a unique nutraceutical strategy to counteract this rising public health concern.
A leading cause of hospital-acquired infections, C. difficile strains are becoming increasingly resistant to antibiotics. Broad-spectrum antibiotics, which are frequently used in current treatments, have the potential to worsen the infection cycle by further upsetting the gut flora. Alternative methods are now urgently needed due to this factor.
The study assessed the effects of tagatose supplementation on C. difficile infection in mice. Results showed that consuming tagatose not only kept them safe but also greatly decreased the severity and symptoms of infection. Apart from broadening the applications of tagatose, this study opens the door for its incorporation into the functional food and medical sectors.
Form Insights
High Stability and Longer Shelf Life to Push Adoption of Powdered Tagatose Over Liquid Form
In the global tagatose industry, the powder segment is predicted to witness a CAGR of 4.9% through 2032. The main reasons why tagatose powder is more widely used than its liquid form are its increased stability, convenience of handling, and wider range of applications. Food companies are set to opt for powdered tagatose as it remains stable for extended periods, unlike liquid tagatose, which is sensitive to moisture and has a shorter shelf life.
As powdered tagatose can be easily blended into dry mixes and dough without changing texture or moisture content, it is more preferrable in industries like dietary supplements, confectionery, and bakery. Powdered tagatose also has an advantage over its liquid counterpart due to its formulation flexibility.
As powdered tagatose can replicate the bulk and structural characteristics of sugar, it works better in applications like sugar-free baking where preserving texture and mouthfeel is essential. Additionally, it has a higher potential for caramelization, which makes it ideal for chocolate coatings, cereals, and baked products.
Application Insights
Prebiotic Benefits and Sugar-like Properties to Make Tagatose a Preferred Choice for Functional Snacks and Beverages
By application, the food and beverage segment is anticipated to witness a CAGR of 5.1% through 2032. Tagatose will likely gain traction across dairy & desserts, beverages, and snacks sub-segments in future.
Because of its sugar-like browning and textural qualities, which are essential in ice creams, yogurts, and dairy-based desserts, tagatose is gaining traction in the dairy and desserts sector. As tagatose functions more like sucrose than erythritol, which can have a cooling effect, it is considered ideal for high-end sugar-free and diabetic-friendly frozen desserts. Leading dairy companies are also experimenting with probiotic yogurts infused with tagatose, utilizing its prebiotic properties to enhance gut microbiome support.
Tagatose is further being studied in the beverage industry as a low-calorie substitute for artificial sweeteners and high-fructose corn syrup, especially in energy and functional drinks. In the snacks segment, on the other hand, the ingredient is anticipated to be used for making gut-friendly, high-fiber, and low-calorie products, such as sugar-free functional snacks, granola, and protein bars.
Asia Pacific Tagatose Market
Presence of Well-established Sugar-free and Plant-based Food Markets to Create Opportunities in Asia Pacific
Asia Pacific is anticipated to hold around 25.7% of the tagatose market share in 2025. This growth is attributed to the development of sugar-free and plant-based food markets in China and India. India, for instance, witnessed a surge of 23% in terms of sugar-free chocolate sales in 2023, mainly propelled by consumers seeking low-calorie, premium indulgence. Tagatose will likely be used by chocolate brands to produce high-end products catering to diabetics or health-conscious populations.
In China, on the other hand, tagatose is anticipated to be used as a sugar alternative in the dairy industry. The country is witnessing a high demand for functional dairy products, including low-sugar ice creams and probiotic yogurts. Brands are also projected to utilize tagatose in sports nutrition products and nutraceuticals to enhance their appeal.
Europe Tagatose Market
Strict EU Regulations on Novel Ingredients Pose Challenges to Full-scale Tagatose Commercialization
Europe has been witnessing decent growth in the market for tagatose for the last few years. It was first approved in the European Union (EU) as a novel food ingredient in 2005. It has been approved in the region with no usage limitations. However, food products that contain more than 15 grams of tagatose per serving and beverages that include over 1% tagatose must show the same type of informative statement that products containing polyol are needed to carry as tagatose is regarded as a fiber and is absorbed slowly.
Tagatose is gradually gaining popularity in the U.K. due to strict sugar reduction laws and rising demand for low-GI sweeteners. Since its implementation in 2018, the Soft Drinks Industry Levy (SDIL) has resulted in a 35% decrease in the amount of sugar in all beverages, compelling brands to seek substitutes like tagatose.
In Germany, on the other hand, it was recently found that more than 43% of consumers have reduced their sugar intake. Hence, leading retailers like Edeka and REWE are striving to extend their product portfolios of sugar-free yogurts, cereals, and chocolates using tagatose. However, with the aforementioned factors, there remains a hurdle for the full-scale commercialization of the ingredient due to strict EU norms revolving around novel food ingredients.
North America Tagatose Market
Rising Interest of Food Brands in Lean Labels to Accelerate Demand in the U.S.
In North America, the U.S. tagatose market is projected to open the door to new opportunities through 2032. The country’s food and beverage industry is showing a high interest in tagatose, especially when it comes to ‘lean labels.’ These refer to the use of tagatose as a sole sweetener in food and beverages.
Florida-based ASR Group, for example, referred to tagatose as a lean label ingredient. Although several manufacturers now prefer to claim that their product has ‘no sugar,’ the company clarified that tagatose, which is 90% sweeter than sugar, has nutritional advantages. The company remains positive of the ingredient’s classification, stating that half of its more than 250 active prospects are interested in tagatose as it provides no polyol or artificial sweeteners claims.
In Canada, however, the market scenario is a little different. The country’s food manufacturers often face higher import costs as most production is concentrated in the U.S. Tagatose's demand may also be hampered by easy access to other sugar substitutes like allulose and monk fruit, which have already become immensely popular in the country.
The global tagatose industry is anticipated to see the entry of various start-up firms like Bonumose. These firms are set to collaborate with leading sugar substitute manufacturers and suppliers to co-develop tagatose-based products. A few companies are estimated to gain fast track approvals and certifications for their products to distribute them in the market.
Key Industry Developments
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Report Attributes |
Details |
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Historical Data/Actuals |
2019 - 2024 |
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Forecast Period |
2025 - 2032 |
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Market Analysis Units |
Value: US$ Bn/Mn, Volume: As applicable |
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Geographical Coverage |
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Segmental Coverage |
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Competitive Analysis |
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Report Highlights |
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Customization and Pricing |
Available upon request |
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The market is set to reach US$ 178.8 Mn in 2025.
The industry will likely be valued at US$ 238.6 Mn in 2032.
The industry is set to surge at a CAGR of 5.3% through 2032.
Damhert Nutrition NV, CJ Cheiljedang Corporation, Bonumose LLC, and Silver Fern are a few leading players.
Powdered tagatose is set to be the most preferred form.
