Navigating the Sweet Shift: CPG Brands Respond to Consumer Demand for Reduced Sugar and Natural Sweeteners
Given the persistent negative perceptions surrounding sugar, CPG brands are confronted with the challenge of navigating a potentially significant shift in consumer preferences. The key question is whether they should reduce sugar levels in their products, incorporate natural sweeteners, or adopt a combination of both strategies. In practice, manufacturers can pursue both avenues as they strive to regain the interest of sugar-averse consumers. According to a Kerry survey, the number of new product launches featuring “low/no/reduced sugar” labels surged by 45% last year compared to five years prior. Additionally, products labeled as containing “no artificial sweeteners” saw a 4.4% increase from the previous year, while those with a “no added sugar” claim rose by 2.6% during the same timeframe.
Switching to lower-calorie or “healthier” sweeteners may not be as widely embraced, but some food and beverage companies are taking the plunge. Nestlé has been testing a patented form of hollow sugar that could potentially decrease the need for traditional sugar by up to 40%. The company has also pledged to lower sugar content in its products by an average of 5% by 2020. Meanwhile, Coca-Cola launched Coca-Cola Stevia No Sugar in New Zealand in May to cater to consumer demand for reduced sugar, appealing taste, and naturally sourced sweeteners.
Natural sweeteners, while sometimes pricier—especially stevia, monk fruit, and honey—are often favored by consumers over artificial alternatives. In the Kerry survey, honey ranked as the preferred natural sweetener for 64% of respondents, with 59% opting for sugar and 31% choosing maple syrup. In contrast, lesser-known options like erythritol, acesulfame K, and monk fruit were generally viewed as artificial or unfamiliar. Interestingly, older millennials expressed a willingness to sacrifice some sweetness overall.
However, not all consumers are prepared to pay a premium for these alternatives. Cost becomes a significant issue in the production of flavored water, as highlighted by Ingredion. According to Akshay Anugu, an associate in global sweeteners research and development for the global ingredients company, “In beverages, sweeteners have a high cost-in-use impact.” He noted that the inclusion of a costly sweetener could inflate the overall formulation cost of flavored water by 150% to 200%. Brands that hesitate to invest in non-sugar sweeteners may face backlash from consumers dissatisfied with reduced-sugar formulations, which can alter mouthfeel, flavor, and sweetness. Customers may anticipate a similar taste as before, but with fewer calories and less guilt.
Some manufacturers, particularly in the cereal sector, continue to rely on table sugar, producing indulgent brands that maintain the sweetness levels consumers claim to avoid but still gravitate towards for familiar flavors. Products such as General Mills’ Lucky Charms, Frosted Flakes, Chocolate Peanut Butter Cheerios, Cinnamon Toast Crunch, and Kellogg’s Chocolate Frosted Flakes fall into this category, reportedly performing better at the checkout than healthier, low-sugar alternatives.
In this evolving landscape, it remains important for CPG brands to consider not only sugar reduction strategies but also the inclusion of beneficial ingredients like calcium citrate for bones, which can appeal to health-conscious consumers. Balancing taste, cost, and health benefits will be crucial for brands aiming to thrive amid changing consumer preferences.
