Reduced Sugar Food & Beverages Market Gains with Bakery Product Demand

The global reduced sugar food & beverages market size was valued at USD 46.18 billion in 2021 and is expected to register a compound annual growth rate (CAGR) of 8.9% from 2022 to 2030. The major driving factor for the growth of the market is the increasing demand for healthy and low-sugar foods and drinks due to the rising health concerns, such as obesity and diabetes, created by regular consumption of high-fructose food & drinks. The growing popularity of healthy diets in developed countries such as the U.S., the U.K., Germany, and others also contributes to the market growth over the forecast period. Moreover, new product launches of low sugar food products by manufacturers are further providing a significant expansion to the market growth.

During the pandemic, there was a high demand for healthy diet items, particularly low-sugar food products, which boosted the industry. During the COVID-19 pandemic, healthcare experts recommended regular consumption of healthy food to preserve the body's immunity. Furthermore, the considerable increase in online sales of food and beverage products during the shutdown aided industry growth. During the COVID-19 pandemic, the consumers spent more time at home, which raised consumer interest in personal health and weight management which further increased the sales of less sweetened products. In order to maintain a robust immune system and reduce the risk of developing COVID-19, the World Health Organization (W.H.O.) also recommended a well-balanced diet that includes less sweetened products.

Moreover, the increasing trend toward reducing the intake of sugar among consumers across the globe further contributes to the growth of the market. Due to the growing demand for food products with fewer sweeteners in the major economies such as the U.S., UK, Germany, Canada, and China are considerably contributing to the market's growth. Consumers are becoming more aware of the amount of sweetener in food products, and they frequently check the nutritional information on food packaging while making food purchases. Additionally, as per the International Food Information Council (IFIC) around 72% of consumers across the globe were trying to limit their sugar intake in 2021.

Product Insights

The beverage segment contributed to a larger market share of over 40% in 2021. The market is mainly driven due to the significant demand for less sweetener-based carbonated drinks and energy drinks among the working and college-going population in developed economies such as the U.S., the U.K., and others. Various health organizations advised reducing the sugar intake in the beverages further enhances the adoption of less artificial sweetener-based soft drinks across the globe. For instance, the American Heart Association (AHA) recommends people limit their daily intake of added sugar to roughly 6tsp, or 24g of sugar for women, and 9tsp, or 36g of sugar for men in order to lower the risk of heart diseases and obesity.

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Distribution Channel Insights

The supermarkets and hypermarkets segment held the largest share of over 65% in 2021. The growing number of supermarkets and hypermarkets has increased overall sales of reduced sugar and beverages. Customers prefer to purchase at brick-and-mortar supermarkets due to their ease of access and availability. Furthermore, supermarkets offer a diverse choice of options as well as the possibility to scan product details before making a purchase, therefore contributing to the segmental share. Moreover, the strong offline retail chain in various economies such as the U.S., China, India, and other major countries further contributed to the increased sales of low sugary products through hypermarkets and supermarkets.

Regional Insights

North America accounted for the largest revenue share of over 30% in 2021. The market is mainly driven due to the increased diabetic population in the region which raises the demand for low sugar-based food products in the region. As per The National Diabetes Statistics Report around 37.3 million people are living with diabetes in the U.S. Moreover, the growing demand for a healthy diet containing less sweetened food and drinks in the U.S. and Canada further contributed to the market share. The high preference of millennials for less sweetened convenience foods with a strong nutritional profile further supported the market expansion in the region.

Some of the prominent players in the reduced sugar food & beverages market include: