The Future of Sugar & Processed Foods

It is clear that over the course of the last decade, there has been an exponential push towards nutrition in the food industry. At one time, consumers were happy with anything that would keep them from starving. Today, more and more are becoming aware of portions they eat and their consumption of excessive calories, sugars, and fats. The organic food industry is on the rise, especially amongst women and younger consumers. Similarly, millennials have greatly shifted towards fruits, vegetables and lean meats, signaling their status as staples of the health food industry in the years to come. Due to the growing population of people conscious towards the sugars and other ingredients they intake, the future of sugar—along with processed foods—appears bittersweet.

Many of the top packaged food manufacturers, such as General Mills, Kraft and Campbell Soup have seen their sales slumping. Customers prefer ingredients that are fresh and natural. Food companies try to accommodate their customers in different ways. It is especially important that sugar and confectionary manufacturers in North America and Europe have to appear more responsible with their products. If possible, companies are extracting all sugars from their products. Pizza Hut and Taco Bell are eliminating trans fats and reducing sodium in their pizza. Subway and Nestle are removing artificial flavors and sugars from their products. Most candy bars have reduced their portions to contain below 250 calories per pack, and soda consumption has been in outright decline. These changes all have a direct impact on the consumption of sugar.

The top countries who are pushing towards organic foods are the United States, Germany, and China. Being aware of the change in customer’s preferences, processed food companies are generally looking to cut sugar and other non-appealing contents from their products. Unfortunately for sugar beet and sugar cane producers, the US and China are two of the top three sugar importers. Additionally, the US and Germany occupy spots in the top 10 importers of packaged foods. It seems as if the world’s largest importers of these products are moving away rapidly. Packaged foods are set to see a decline in the near future, taking sugar in its direction. This means that future is not entirely bright for exporters of packaged goods or the ingredients that are seen as harmful to today’s markets. Other countries beyond Eastern Europe are becoming more health conscious but are noticeably behind the curve, despite the push towards healthier foods.

While packaged food manufacturers have to deal with their problems, sugar has its own battles. Sugar cane (which accounts for 75% of the world’s sugar) and sugar beet will be greatly impacted by the drop in consumption of processed foods. Indeed, Fortune Magazine reports that sugar sales in the US have declined significantly in recent years. For now, however, North America remains the biggest importer of sugar and the largest potential market for producers.

This contributes to strong prospects for the future of sugar producers within the European Union. The EU protects domestic sugar beet producers against more competitive importers (allowing for inefficiencies within the industry), but it is currently pursuing a goal of substantially reducing the gap between EU and world market prices through reform of its more protectionist laws. In 2017, for example, they plan to lift restrictions off exporters, allowing the industry to compete on a global scale. All in all, there is a dark decline of sugar and processed food consumption hovering over their respective industries. It does not guarantee a strong customer base for future exporting companies; however, EU exporters can still find success for now.

 

http://atlas.media.mit.edu/en/profile/hs92/170111/

  • European Commission- Agriculture & Rural Development – Sugar

October 11, 2016

http://ec.europa.eu/agriculture/sugar/index_en.htm

  • A conservative EU sugar beet production level estimated in the last quota year by Ciaran Morgan

July 31, 2016

http://www.agriland.ie/farming-news/a-conservative-eu-sugar-beet-production-level-estimated-in-the-last-quota-year/

  • European Commission- Sugar Trade Statistics

September 29, 2016

http://ec.europa.eu/agriculture/sugar/presentations/trade-statistics_en.pdf

  • Why sales of packaged or processed foods are declining by Annie Baxter

March 11, 2015

https://www.marketplace.org/2015/03/11/business/why-sales-packaged-or-processed-foods-are-declining