From ancient times to the present, mankind has never given up the pursuit of “sweet” taste. From the birth of the first artificial sweetener saccharin in 1879 to the subsequent aspartame, sweet sugars, sucralose, etc., people’s love for sweetness has never stopped. At present, with the increasing health awareness and questionable sugar research, “sugar control” has become a mainstream trend in the market and a hot spot for consumers. Natural sweeteners based on stevia, erythritol, momordica grosvenor, and allulose have attracted the attention of the market. Many downstream product formulations have also added these ingredients, including food, beverages, snacks, nutritional supplements, and so on.
1 Erythritol is the “dark horse” in the sugar substitute market.
The global erythritol market demand will continue to grow due to the disruption of the supply chain by the epidemic and the surge in consumer demand for sugar substitutes. Statistics released by Sullivan show that the global erythritol will grow at a CAGR of 22.12% from 2020 to 2024. However, this growth has also led to a very tight supply in the market for erythritol as well as sugar substitutes such as allulose. Some companies point out that these two raw materials are currently in short supply, with longer lead times and higher prices. This is despite the fact that major producers have indicated that they are working to increase capacity and support market supply needs.
Erythritol is a four-carbon sugar alcohol that occurs naturally in a variety of foods (grapes, pears, watermelon, etc.). It can be prepared by both microbial fermentation and chemical synthesis methods. The microbial fermentation method is currently used for commercial production. Erythritol is made by fermentation of glucose, and the upstream raw materials mainly include glucose and the corn starch sugar and corn used to produce glucose, as well as excipients such as ammonium salts and yeast extracts.
As a natural sweetener, erythritol has excellent properties such as zero calories, zero sugar, high tolerance, good physical properties, and anti-caries. Erythritol is a white crystalline, odorless ingredient that dissolves rapidly in water to form a clear, low viscosity, colorless solution. At the same time, erythritol does not provide calories because it is almost unchanged in the human body and does not participate in the metabolism of sugar after entering the body.
It is also a tooth-friendly ingredient, which is not used by oral bacteria and has an inhibitory effect on the growth of oral bacteria, thus providing dental protection. Erythritol was not very hot in the early days of the market and was often found as a stevia compounding ingredient. Nowadays, it can be applied alone or in combination with high-intensity sweeteners such as stevia and momordica grosvenori, and has been widely used in many end-product formulations. For example, Halo Top, a low-sugar ice cream brand, Lily’s Chocolate, a confectionery brand, Bai, a bakery product, Bai, an antioxidant beverage brand, and Truvia and Pyure, table sweetener brands.
When it comes to erythritol, it is impossible not to mention “Genki Forest“. I don’t know whether the erythritol was made popular by Genki Forest or the erythritol made Genki Forest. In short, the current market heat of Genki Forest and erythritol have been red hot. Mainly “0 sugar, 0 fat, 0 card” Genki Forest sparkling water products overnight on fire, and erythritol is the main selling point of the product. The hot market of Genki Forest has also driven the development of the erythritol industry chain behind it into the fast lane.
Looking ahead, the future of erythritol is still promising, as it plays an important role in reducing sugar.
2 Erythritol, an unprecedented “shortage” in North America.
Erythritol is currently in very tight supply as the global market focuses on sugar substitute natural sweetener ingredients. There is an unprecedented shortage of erythritol across North America, with costs and lead times increasing. Thom King, CEO of Icon Foods, said these things appear to be temporary, but it may not be until the second quarter of 2022 that significant stabilization will occur. The company supplies a wide range of sweeteners used in packaged foods and beverages, including erythritol, stevia, rosemary, allulose, and other ingredients.
The overall market environment is relatively complex, and the global demand for erythritol continues to grow, with a particular shortage in North America, mainly due to the following.
2.1 Driven by consumer demand for sugar reduction.
When consumers buy products today, sugar content has become a very important purchase decision factor. From the perspective of the global market environment, the growth rate of sugar-free/low-sugar products has been increasing in the past two years, and some countries and regions began to tax sugary soft drinks, the overall market environment for the development of the sugar industry is not so “favorable”.
Not only are foreign consumers concerned about low-sugar products, but domestic consumers are even crazier. Nielsen reports that 41% of Chinese consumers want snacks that contain less sugar. Clearly, low sugar/no sugar has become a new way for the average consumer to convey a healthy lifestyle. The domestic market is also validated by the popularity of meal replacements, light snacks, nutrition bars, and other categories.
2.2 The impact of the global epidemic on the supply chain.
The supply chain was severely disrupted after the New Crown epidemic and the whole logistics was bottlenecked by the development. This led to a very tight market supply and the construction of a local supply chain was very important. In the North American market, Cargill and Evian are among the more important local suppliers, and they have adjusted their strategies from several angles to meet the market demand. Cargill has said externally that it has made tremendous progress in optimizing existing production facilities and is developing additional plans to meet growing domestic and international demand. Erion said that when this happens, not only do they offer a variety of solutions to their customers, but they also have business continuity plans in place.
Not only are ingredient manufacturers making strategic changes, but brand owners are no exception. As a brand name in the natural sweeteners market, Pyure Brands says its early decades of manufacturing partnerships with key erythritol producers have provided the foundation for its continued supply, despite also facing challenges with raw material shortages. The company offers a range of organic sweeteners, baking mixes, and other products with stevia and erythritol as key ingredients. Hershey also said it can meet foreseeable raw material needs by building relationships with suppliers with long-standing relationships.
2.3 Shortage of raw materials in the upstream industry chain of erythritol.
The market shortage of erythritol is correlated with the availability of corn glucose in the market, but mainly with the supply and demand of corn in the upstream industry. corn exports from the US to China grew exponentially between January 2020 and 2021, hitting a record high of 1.524 million tons in December. China’s huge import demand is due to domestic supply shortages and a hog herd that was hit by African swine fever in 2018. And with increasing demand for feed from its recovering hog herd, Chinese buyers have been snapping up corn, driving up corn prices.
2.4 China erythritol market is out of stock.
This is a very important reason. As the main global erythritol supply market, China domestic erythritol is now in short supply. This is mainly due to the dark horse of the startup beverage brand Genki Forest. Erythritol has now become a standard ingredient for low sugar/sugar-free drinks in the domestic market.
3 Allulose is becoming a “new star” in the market attention.
Allulose, also known as D-allulose, is a rare sugar found in small amounts in plants. first discovered in wheat leaves in 1940 and later in fruits (figs, raisins), the small amount of allulose present in plants is far from meeting the market demand for consumption. Therefore, researchers have continuously tried to achieve commercial production of allulose through technology, usually prepared through a complex multi-step process. Currently, low-calorie allulose is more commonly obtained from corn starch-derived fructose by enzymatic processing techniques.
Allulose is 70% sweeter than sucrose, but has only 0.4 calories per gram (compared to 4 calories per gram of sucrose), making it in high demand in the overall market. Although allulose is still considered a “carbohydrate” on food labels, it is not metabolized in the same way as sucrose and does not raise blood sugar or insulin. Therefore, it may be an attractive natural sweetener for consumers who are concerned about their blood sugar.
Over the past year (June 2020 to June 2021), many well-known global food and beverage brands have added allulose to their product launches, including Chobani, Knorr, Kashi Go, Smart Sweets, Nick’s, and Magic Spoon, among others. For example, Chobani launched a zero-sugar yogurt. Its main ingredients are ultra-filtered skim milk powder, water, allulose, stevia extract, momordica grosvenori extract, citrus fiber, vegetable juice concentrate (coloring), and six types of probiotics. The product is flavored with mixed berries, strawberries, and vanilla. Each 5 oz. product has only 60 calories, is lactose-free, and contains 11-12 grams of protein.
4 Continued growth in demand for allulose market
Currently, the main global suppliers of alloxan are Tate & Lyle, Erion/Matsutani, CJ CheilJedang, and Samyang Corp.
Tate & Lyle says the goal is to produce more products as soon as possible to meet market demand due to the current high demand. Tate & Lyle’s Loudoun, Tenn. facility currently offers liquid and crystalline allulose, and DOLCIA PRIMA non- GMO crystalline allulose is a natural sweetener ingredient introduced by Tate & Lyle that opens up new opportunities for end-brand owners in applications such as tabletop sweeteners, beverages, and confectionery. Tate & Lyle has also indicated that it is increasing the production and availability of alloxan syrup and is actively working with a number of customers. This syrup form of allulose has a clean, clean taste and can be used in beverages, dairy products, candy, nutrition bars, and many other product formulations.
5 The next sugar substitute market ingredients
Among the many sugar substitute ingredients, stevia, momordica grosvenori, and erythritol are currently ingredients with a wide range of applications, either alone or in combination. Momordica grosvenori is a noteworthy sugar substitute raw material with a long history of consumption in China, and the cultivation of the raw material has been expanding in recent years, with a global market to look forward to.
Allulose is currently starting to heat up in foreign markets. However, in China, due to regulatory restrictions, it is currently not allowed to be used in food production domestically and is mainly used for export. Besides, Tagatose and L-arabinose are also two promising sugar substitute raw materials. Of course, sugar substitutes go far beyond this, as rosmarinic acid, stevia, and formerly xylitol are all important sugar substitutes. Each ingredient should find its own scene in its own application range to avoid homogeneous competition in the market.
The future development of technology will always exceed the current human perception, and ultimately which type of sugar substitute, which type of drink, and which brands will dominate the market may depend on the impact of a combination of factors.
