Developing world to shape future sugar demand

Consumer focus on weight loss will likely lead to a decrease in global consumption over the next 15 years, says Rabobank.

While global sugar consumption is clearly declining, long-term demand for the commodity will largely depend on evolving tastes in the developing world, according to Rabobank.

In a report released this week, the Dutch lender argues that an increasing consumer focus on health and wellness, legislation designed to reduce sugar consumption and steps taken by companies to lower sugar contents are driving a global shift away from the sweet stuff.

“This is a story of steadily rising global obesity rates, finger pointing, and the repercussions of consumers cycling through a love/hate relationship with the three macronutrients – carbohydrates, fat and protein,” the authors wrote. “Currently, protein is on the rise … as sugar, sugar-containing products and other highly refined carbohydrates are increasingly cast as the main villain.”

The report explains that quantifying sugar intake is particularly difficult because consumption is not tracked directly, but rather inferred from production, exports, imports and stocks. It also notes that sugar consumption can be influenced by the availability of alternatives, local pricing and food habits.

As a rule, however, its authors posit that the rate of growth of per-capita sugar consumption diminishes as per-capita GDP increases. Similarly to developed countries, the slowdown in sugar consumption observed after surpassing an annual GDP of $10,000 per capita is rooted in heightened concern about diet and weight-gain among the emerging middle class, the report argues.

Categorizing world economies into groups labeled “rapid growth”, “moderate growth” and “stagnation”, Rabobank writes that over the past 15 years, growing sugar consumption in China and India has helped lead the sector’s boom globally. In future, sugar demand will be dampened by the graduation of developing countries to the better-off categories, with the portion of the world’s population in moderate and stagnant growth zones expected to rise from 57 percent in 2015 to 76 percent in 2030.

“More than half of the global population – and with it half of sugar consumption – is now in countries where current income levels would lead us to expect only moderate growth in per capita consumption, even with robust economic growth,” the report says. “These trends on their own … suggest that the rate of growth of global sugar consumption in the coming 15 years is likely to be less than the growth rate seen in the last 15 years.”