Sugar Usage Sees Strong Demand

Andy Briscoe, President & CEO of the Sugar Association at an industry meeting.

After years of getting a bad rap, sugar usage – and demand – are on the rebound.

World sugar prices are the highest they’ve been since 1982 – around 30 cents a pound as of this writing. The current price partly reflects decreased production from some of the world’s largest sugar producing countries because of weather problems or poor crop conditions. But there’s something else afoot that could keep demand strong in the months ahead.

Consumers increasingly are on the lookout for natural sweeteners, and major food and beverage manufacturers are responding with a return to sugar-based products.

Andy Briscoe, President & CEO of the Sugar Association, shared his thoughts on the resurgence of sugar in a recent interview with ISC Newsroom.com:

What are some of the key factors behind the uptick in sugar usage?

Eighty percent or more of all foods and beverages are purchased because of taste. So the primary driver in my mind is people like and demand the quality taste of sugar. Sugar is also a natural sweetener and has been safely used for more than 2,000 years.

Why the increased interest in sugar now?

Today, more than ever, consumers want to know what they are eating and what they are feeding their families. Sugar is a time-tested and safe sweetener – a natural ingredient shoppers can pronounce. And we know consumers prefer natural ingredients.

For the same reason, I think there’s a growing negative perception around the use of chemical artificial sweeteners. Today, the U.S. has 27 sweeteners and many of them are man-made, chemical sweeteners.

The Sugar Association recently conducted a Harris Interactive poll of 1200 parents in the U.S. and found half of the parents did not want their children consuming artificially sweetened products. We also found most parents could not identify the sweeteners that are in their children’s foods.

While sugar consumption has been targeted as a scapegoat for childhood obesity, an Institute of Medicine study of carbohydrates in 2002 reported the data available on dental caries, behavior, cancer and risk of obesity shows there is insufficient evidence to set an upper level for total or added sugars. The same lack of evidence was re-confirmed in a European Food Safety Authority scientific review in March 2009.

How did the introduction of high fructose corn syrup affect the demand for sugar?

Around 1980, high fructose corn syrup was rapidly replacing sugar in U.S. soft drinks and beverages. As a result, the sugar industry lost about 2.5 million tons in annual deliveries to beverages during the next six years. It’s taken us from 1986, when deliveries hit bottom, to climb back up to about 10.5 million tons in total U.S. deliveries in 2008 and 2009 (see attached WASDE chart and Total U.S. Sugar Deliveries 1980-2008 chart).

While overall demand for sugar is back up, the actual per capita consumption of sugar has gone down about 40 percent since 1970. That is partly due to population increase, but also because of other caloric sweeteners coming into the marketplace, such as high fructose corn syrup, glucose syrup, dextrose, etc. This reduction in sugar consumption has occurred at the same time the obesity rate has tripled (see attached chart). So this definitely shows sugar has not been the cause of obesity as some have inferred.

In what ways is sugar making a comeback today?

Several food and beverage manufacturers are switching from the use of high fructose corn syrup to sugar – Snapple, Gatorade, Pepsi Throwback, Heritage Dr Pepper. Most recently, Heinz announced a move back to sugar with their Simply Heinz product. Consumer preference, taste, and sugar being all natural are the key drivers for these switches.

There’s also a major trend among manufacturers to simplify product ingredients – to have five or less ingredients helps reduce confusion for consumers. The idea is to get back to contents people can recognize and feel comfortable feeding their children. Consumers should not have to have a chemistry degree to be able to read the ingredients on some of today’s labels. Sugar, however, is a natural ingredient people quickly recognize and trust.

What does the future hold for the sugar industry?

We’re already into 2010 and everything still looks strong for current usage trends.

Usually, in the sugar industry, when demand exceeds production, the farmers rise to the occasion either by planting more or doing what they can to increase the yield of their crops. This cycle takes about 18 months or so, which gets us through one growing season. This last year, for example, U.S. beet and cane growers increased production by roughly five percent on average. If demand continues to be strong, growers will continue their efforts to increase acreage and production as best they can.

So whether it’s 2011, 2012 or longer when production catches up to demand, I don’t know. Today, I don’t have any sense of sugar demand tracking down, at least for the near term.

As an industry, I’d like to think we’re in a better position demand-wise than we’ve been in the last 25 or 30 years. We’ve cycled back to where we were in 1980. I would assume most sugar growers and processors are pleased. The Sugar Association will continue to work hard for the industry – to promote sugar as part of a balanced diet and healthy lifestyle.

(More information about sugar and the Sugar Association can be found at www.sugar.org.)