Chicago, May 11, 2023 (GLOBE NEWSWIRE) -- The industrial sugar market is projected to reach US$59.1 billion by 2028 from US$46.4 billion by 2023, at a CAGR of 5.0% during the forecast period in terms of value. The market for industrial sugar by solution is experiencing growth due to the increasing demand for processed and convenient food and beverages globally.
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The industrial sugar market is experiencing significant growth, primarily due to the increasing use of beet sugar in food processing and the production of ethanol and biogas. While sugarcane is the primary crop for sugar production in tropical countries, sugar beet is becoming an increasingly attractive alternative. The industrial beet sugar market has shown consistent growth in production and consumption and is expected to continue growing rapidly in the foreseeable future. The beverages segment is expected to be the most attractive market for industrial beet sugar consumption.
Key Industry Development:
Some key developments in the industrial sugar market include the increasing demand for biofuels, particularly ethanol, which has led to higher consumption of industrial beet sugar. Additionally, the growing popularity of processed foods and beverages has increased the demand for sugar as a key ingredient. Finally, the entry of new players and the increasing globalization of the sugar industry have further spurred growth and competition within the market.
Report Scope & Segmentation:
| Report Coverage | Details |
| Forecast Period | 2023-2028 |
| Forecast Period 2023 to 2028 CAGR | 5.0% |
| 2028 Value Projection | USD 59.1 billion |
| Segments covered | Type, Application, Source, Region |
| Regions covered | Europe, North America, South America, Asia Pacific |
Key Takeaways:
- Significant growth potential driven by increasing demand for sugar as a key ingredient in processed foods and beverages.
- The industrial beet sugar market is expected to grow at a rapid pace, driven by the rise in biofuel demand, particularly ethanol.
- The beverages segment is expected to be the most attractive market for industrial beet sugar consumption. Additionally, the industry is witnessing a shift towards natural sweeteners and alternative sweeteners, such as stevia and monk fruit, driven by rising consumer awareness of health concerns associated with excessive sugar consumption.
- Technological advancements and the development of new sugar beet varieties with higher sugar content are also contributing to the growth of the industrial sugar market.
- The entry of new players and increasing globalization of the sugar industry are expected to further drive growth and competition in the market.
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The industrial sugar market is a major global player, accounting for a significant portion of the world's sugar production. It is a highly regulated industry, with government policies and trade agreements playing a significant role in shaping its dynamics.
One of the key drivers of the industrial sugar industry is the increasing demand for sugar as a sweetener in food and beverage products. This has led to a rise in the production of sugarcane and sugar beet, the two main sources of industrial sugar.
Opportunities and Challenges:
Opportunities: Access to New Markets through the Growing Cooperative Sector
The sugar industry's largest component is the cooperative sector, which includes millions of farmers and thousands of operational mills. This sector has been instrumental in developing the industrial sugar market and is a critical component of developing countries like India. To improve productivity, a strong relationship between farmers and millers is essential. Given the scattered landholding structure, productivity improvements on farms can only occur with a strong farmer-miller relationship. This relationship will allow the mill to encourage the adoption of better seed varieties, improve farm practices, and incentivize investment in extension services. A long-term farmer-miller relationship will also help mitigate risks for both parties. The mill will address off-take risks for farmers through assured cane off-take, while the mills will be assured of cane supplies. This relationship will also enable farmers to access credit from banks based on off-take guarantees provided by mills. Furthermore, mills may partially fund the availability of crop insurance to protect against crop failure risk.
Challenges: Increasing Sugar Production Costs
The industry is also facing significant challenges, including increasing competition from alternative sweeteners and growing concerns over the environmental impact of sugarcane and sugar beet farming. In response, companies are investing in research and development to create new, more sustainable forms of sugar and exploring new markets.
According to a report by the International Sugar Organization, the average cost of sugar production in the 2020-2021 season was approximately 21 cents per pound, up from about 18 cents per pound in the 2016-2017 season. The report also notes that the cost of production has been rising faster than the price of sugar, which has put pressure on sugar producers' profitability. The increase in sugar production costs can be attributed to various factors, including rising labor costs, energy costs, raw material costs, environmental regulations, and climate change. Additionally, with a decline in low-cost production opportunities due to wage inflation, the cost associated with infrastructure investments, and a decrease in cultivable land, there has been an increase in the marginal cost of production, leading to decreased profit margins.
Segment Overview:
By type, white sugar is projected to grow at the fastest rate during the forecast period
White sugar is expected to experience the highest growth rate among all types in the industrial sugar market, driven by various factors such as its extensive usage in baked goods, beverages, and confectioneries. The United States Department of Agriculture (USDA) predicts that global sugar production will reach a record high of 191.7 million tons in 2021/2022, mostly in the form of white sugar, due to technological advancements, efficient cultivation practices, and affordability.
By application, beverages to hold a significant market share during the forecast period
Beverages hold the largest market share in the industrial sugar market applications due to the increasing consumption of sugar-sweetened drinks such as sodas, energy drinks, and sports drinks worldwide, particularly in developing nations. Despite public health campaigns to reduce sugar intake, sugary drink sales in the United States rose by 6.4% in 2021. Coca-Cola, a global leader in sugar consumption, uses over 100 million metric tons of sugar annually in its products.
Asia Pacific to boost market growth by 2028
The Asia Pacific region plays a crucial role in driving the growth of the industrial sugar market due to its high sugar consumption rate, with China and India being the largest consumers, as well as being major producers of sugar, such as Thailand and Indonesia. The region's steady supply of sugar meets the high demand for processed and packaged food items, driving the industrial sugar market's growth. According to the International Sugar Organization (ISO), the Asia-Pacific region accounted for more than half of global sugar consumption in 2020, and with population growth and increasing income levels, demand for industrial sugar in the region is set to rise.
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List of Major Players Mentioned in the Report includes:
- Sudzucker AG (Germany)
- Cargill Inc. (US)
- Associated British Foods plc (UK)
- Michigan Sugar Company (US)
- Dwarikesh Sugar Industries Limited (India)
- Rajshree Sugars & Chemical Limited (RSCL) (India)
- Rana Group (India)
- Shree Renuka Sugars Limited (India)
- Upper Ganges Sugar & Industries Limited (India)
- Bajaj Hindihan Sugar Ltd (India)
- Bannari Amman Group (India)
- Dhampur Bio Organics Limited (India)
- Thai Sugar Group (Thailand)
- Metta Group (India)
- Dalmia Bharat Group (India).
Overall, the industrial sugar industry is a complex and evolving sector that is shaped by a range of economic, social, and environmental factors. While it faces significant challenges, it also presents opportunities for innovation and growth, particularly in the development of more sustainable forms of sugar.
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