Round-Up - NPD: Can 'Rare Sugar' Rescue the Soft Drinks Market?
By Tom Vierhile, Innovation Insights Director at Datamonitor | 22 May 2014
Has Tom Vierhile discovered the sugar-alternative silver bullet?
If you kiss enough frogs, we're told, you’ll eventually find your prince.
Soft drink makers thought they found their prince with stevia. Coca-Cola pinned its turnaround hopes on stevia in the UK in 2013, going as far as replacing 'regular' Sprite with a stevia-sweetened version with 30% less sugar.
But, news that Sprite with stevia has not delivered a much-needed sales turnaround suggests that the frog-kissing will continue, with Japan’s so-called “rare sugars” now angling for a smooch.
It wasn’t supposed to work this way. The gospel on the soft drink market was that every successive high-intensity sweetener generation was supposed to deliver another new sales peak as consumers embraced the latest “better for you” alternative to sugar- or high fructose corn-sweetened soft drinks. But, somewhere along the way, this model derailed. Sales of diet soft drinks are now dropping faster than 'regular' soft drinks.
According to data from Beverage Digest, US sales of Diet Coke declined between 2007 and 2013 by 19.2%. That is a steeper drop than for brand Coca-Cola, which slipped 9.4% over the same period.
New sales data for Coca-Cola’s stevia-sweetened Sprite, which was launched in 2013 in the UK as a replacement for 'regular' Sprite, suggests that stevia may not be the answer either. According to The Grocer, sales of Sprite with stevia in the 52-week period to 4 March declined by over 9%. This happened despite a sizeable increase in ad spending for the brand that accompanied the launch.
And, while Coca-Cola is still testing stevia-sweetened Coca-Cola Life in Argentina and Chile, Sprite’s difficulties muddy the picture of where the variant is heading, although the company did recently receive a trademark for “Coca-Cola Life” in the US.
The next sweetener to the rescue may not be one specific sweetener, but a suite of around 50 different sweeteners, referred to collectively as “rare sugars.” That is the term used in Japan to describe a class of sweetener that sounds too good to be true.
Scientifically, rare sugars are monosaccharides that exist in nature, but are present in such small quantities that they are generally considered to not be commercially viable. Xylitol is arguably the best known rare sugar, with D-psicose, D-allose and D-tagatose three types of rare sugars showing the most commercial promise. And what promise it is, with D-psicose said to have 70% of the sweetness of table sugar with nearly zero calories. But, it is about more than just lack of calories. There is evidence that D-psicose has blood sugar management capabilities as it is reportedly able to inhibit a spike in blood sugar, which is the opposite of what you would expect from a 'sugar'.
Even better is a March study published by researchers at Japan’s Kagawa University on the anti-obesity effects of D-psicose in rats that found the sweetener can actually boost resting energy expenditure during darkness, raising the possibility that the rare sugar may actually play a proactive role in fighting obesity.
Research on rare sugar kicked off in the early 1990s, led by Professor Ken Izumori of Japan’s Kagawa University who began studying them as part of the school’s agriculture department. Professor Izumori was able to isolate an enzyme in nearby soil samples that was able to convert fructose – a common sugar found in fruit – into the rare sugar D-psicose. The problem at that time was that the process used to manufacture rare sugar produced a finished product that cost hundreds of dollars per gram.
But, subsequent scientific innovations involving genetically-modified bacteria-producing enzymes have made rare sugar commercially viable at a fraction of its original cost.
Rare sugar’s road to commercial development intensified in 2010 when Kagawa University applied for “Food for Specified Health Use” (FOSHU) certification in order to sell rare sugar as a table sugar intended to prevent a spike in blood sugar. Rare sugar finally hit the market in packaged form in 2013 with the launch of a syrup product called Rare Sugar Sweet, which created a stir to the point where RareSweet, the seller of the product, had to stop taking orders for a few months to allow supply to catch up with demand.
It did not take long for the bandwagon for this new “miracle sugar” to fill up, and it is believed that over 50 food and beverage companies in Japan are currently making - or will be making - products that use rare sugar as an ingredient.
A sign of what is to come in beverages is provided by Ito En Kishoto Soda (Rare Sugar Soda) in a Japanese apricot flavour said to deliver “refreshing aftertaste with subtly sweet flavour.” This natural drink from Japan’s Ito En Inc has 42 calories per 10cl serving and 3.2 grams of rare sugar that is claimed to have 70% of the sweetness of regular sugar, but prevents blood sugar and fat build-up.
These types of health claims are very novel for a soft drink product. Rare sugar could also find a home in hot beverages. Uchi Café Sweets My Cup Drink Soy Latte with Rare Sugar Sweet from Fresco Corp is also new in Japan, and contains syrup made with the rare sugar D-psicose, which is said to have a lower glycemic index than normal sugar. A 24cl cup of the drink contains just 90 calories.
How rare sugar is marketed in new product launches will go a long way to determine if this type of sweetener has a future in soft drinks. Whether or not rare sugar is truly “natural” seems to be a grey area, though there is strong rationale for wanting to market rare sugar as natural. According to the International Food Information Council’s 2014 Food & Health Survey, 68% of American consumers believe that sugars that are naturally found in foods and beverages are more healthful than other sugars.
To the degree that rare sugar is perceived to be more “natural” than other types of sugars since it occurs in nature, this sweetener could be the next great hope for the beverage market.
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