Food & Beverage News: F&B Specials - Evolution of the low calorie market

The increasing incidence of obesity (as high as 50% amongst adult Americans) and consequent growing calorie consciousness, has sparked off a growing consumer base of low calorie products. The key factor driving the low calorie market is the consumer demand in international markets. USA which is the largest market for sweeteners.

On the contrary in India, the consumption of sweeteners has been traditionally fuelled by the burgeoning diabetic segment (with usage being restricted to tea/coffee). Till few years, back 90% of the consumption of sweeteners was by diabetics only for controlling blood sugar. "A fast paced life style comes with a baggage of various ailments like obesity, cardio-vascular problems etc. Controlling your calories is the key to fitness as excess calories get converted into fat in your body. Sugar substitutes/artificial sweeteners is the smart way to cut on excess calories of sugar (sucrose) and control your calorie intake," says Dr Muffazal Lakdawala, well-known Obesity Surgeon.

However, with the increasing incidence of lifestyle diseases like cholesterol, obesity, etc. has given rise to a corresponding awareness for calorie consciousness amongst urban individuals and the growth in the Indian sweetener market today is essentially being driven on one of the two following factors:-

a) Increasing health and calorie consciousness amongst urban individuals leading sedentary high pressure lifestyles, characterized by erratic/unhealthy eating habits and dependence on junk food/high calorie diet
b) Increasing incidence of obesity linked lifestyle diseases like cholesterol, diabetes, cardio vascular diseases, etc., in which in terms has given rise to change in lifestyle and dietary habits creating the need for adopting a need for calorie control in ones daily diet

Effect of sweeteners on sugar industry - India vs global scenario
India being the largest consumer and the 2nd largest producer of sugar in the world, the Indian sugar industry - at a whopping Rs. 150 billion (with a production of over 20 million tones and a CAGR of 7.23%) - cannot be compared with the sugar substitutes which is a very nascent and evolving category. Moreover with the sweeteners having a price 5 times that of sugar (10 paisa per spoon vs. 45 paisa for a pellet equivalent), its preposterous to even expect usage of sweeteners to affect consumption of something as basic as sugar.

Global scenario
If one looks at the global scenario however, according to ISO (International Sugar Organisation) London, sweeteners have replaced 13 million tones of refined sugar worldwide and have contributed to a build up of 60 million tones of sugar.

Competitive threat to sugar is particularly strong in the case of carbonated beverages compared to bakery products where the technical problem is replacing the bulk provided by sugar.

Key players in the Indian market
The dominant players in the sweetener market is Sugar Free which dominates the category with market share of 72 % and growing at 20% p a. The others players are Equal and Sweetex from Boots with a market share of 14 and 10 % respectively, clocking negative growth rates.

Anand Deo, senior vice president, Cadila's Consumer Division and makers of Sugar Free Natura said, "Sugar Free is currently the market leader in the sweetener category with nearly 78 % market share. It has presence in both Aspartame and Sucralose category. It is currently a more than 50 crore brand and growing at about 20%."

Cadila Healthcare Ltd, the flagship company of the Zydus Group headed by Anand Deo, senior vice president, Cadila's Consumer Division, has been one of the fastest growing integrated healthcare companies and is today the 5th largest player in the Indian domestic formulations market with a turnover exceeding Rs 13.1 billion and having a global presence. After an existence of five decades, as the erstwhile Cadila Laboratories, Cadila Healthcare came into being under the aegis of the Zydus Group, in 1995.

"Today we are competing with Sugar and not with Sugar substitutes in India. We have always believed in setting highest standards for ourselves without compromising on the quality and creativity," Deo added.

Current market overview
The low calorie market stands at around 50 crores and is clocking double digit growth rates. However, the current category growth rates are no indicator of the potential growth of the industry as till last year the category was governed by several restrictions on use of low cal sweeteners in products other than sugar substitutes among others - which affected growth of this category.

International trends
Internationally growth in the low calorie dietetic market has been fuelled by sweetener based low calorie products like diet soft drinks, confectionary, ice-cream and frozen desserts and foods - rather than direct use of sweeteners. However, in India it's been the opposite with direct usage of sweeteners (table-top sweeteners) accounting for over 90 % of the low calorie market.

However, with the new regulatory mechanism put in place by the government, allowing unrestricted usage of sweeteners in dairy products, biscuits and confectionary and allowing entry of new molecules - will completely change the scenario in this category, in the years to come and give a tremendous boost to the category.

Most leading restaurants today offer low-calorie mocktails or refreshers on their drink menus. Instead of ordering drinks like smoothies which are laden with sugar, one could order for a drink without the sugar and use the sachets of Sugar Free available on their tables. Almost all hotels and food joints/cafe's across the city offer you the choice." says Ms Payal Batra, Nutritionist, HL Hiranandani hosiptal.

The first manufacturer of Sucralose in India: Virchow commenced production of the artificial sweetener, Sucralose, for the first time in India in the year 2005. Virchow is currently increasing its production capacity of Sucralose.

Artificial sweeteners are becoming a big business in India. What will be the health impact of this business is something regulators are clueless about. For instance, the Coca-Cola Company and Nutra Sweet Company have applied to the Union ministry of health and family welfare for approval for a new chemical sweetener, Neotame. The companies say this sweetener is sweeter than aspartame, the artificial sweetener originally invented by Monsanto.

Tabletop sweeteners are popular in India with high-profile promotional campaigns indulging the health-conscious to dump sugar and choose its alternatives. Brands such as Equal, a global product from Chicago-based Merisant, Sweetex from Boots Piramal, Sugar Free TM from Zydus Cadila and Sweet'Nlow from New York's Cumberland Packaging Corp are popular in India.