Kerry is a market-leading provider of taste and nutrition ingredients and solutions across the beverage industry, supplying a range of authentic natural flavours for refreshing beverages. This includes botanicals and citrus extracts for alcoholic beverages or specific functional ingredients that provide health benefits and even processing aids for the brewing industry.
Moving into 2024, sugar reformulation will be a significant challenge for the beverage industry in the Asia Pacific. This has only been accelerated by sugar taxes implemented by governments across the globe to control and reduce unhealthy sugar levels in products, with countries regions such as the United Arab Emirates, Thailand, Philippines, Singapore, Malaysia, Nigeria, and South Africa among countries within the Asia Pacific, Middle East and Africa (APMEA) taking the lead in this category.
Emma Stride, Business Development Director for Taste at Kerry Ingredients Australia and New Zealand, said in recent years, particularly post-pandemic, consumers have become more receptive to sweeteners and sugar alternatives. This acceptance comes with a catch. Research shows that 77 percent of global consumers considered the type of sweetener used as the most critical detail, with 75 percent having a preference for natural sweeteners.
Stride continued that 98 percent of APMEA consumers polled had negative taste and health perceptions of artificial sweeteners, with the majority perceiving it as bad for health (58 percent) and believing it to have harmful side effects (47 percent).
Despite this, the APMEA market is dominated by artificial sweeteners, with 46 percent of sugar-reformulated new product launches using synthetic sweeteners such as sucralose or acesulfame K.
"While this can be viewed as a challenge, this presents a great opportunity for industry players to address the rising demand for natural sweeteners," said Stride.
Stevia is one example of this. This natural sweetener is a plant extract and is currently the third most preferred sweetener in the world, following honey and sugar. After these three, coconut sugar and fructose fall in fourth and fifth place.
Consumers can be categorised into three main types: Zero Sugar Advocates, Taste Chasers, and Sugar Reducer Seekers. The first group is particular about the type of sweetener as they have removed sugar from their diet for health reasons, such as diabetes. In APMEA, Taste Chasers constitute the most significant consumer segment; while they are open to reduced or no sugar, they want an authentic taste. Sugar Reducer Seekers are motivated by a healthier lifestyle by cutting back on sugar, of which Australians, Malaysians, and Vietnamese are top consumers that fall under this group.
The growing and evolving consumer demand for healthier, sustainably produced functional beverages that better support nutritional needs while retaining great taste is a trend that spans numerous FMCG categories. Kerry's research shows Australian consumers expect cost parity between low-to-no and high-sugar beverages, with consumers willing to pay more for a beverage with functional benefits such as added protein immunity or gut health support.
The number of product launches with sugar reformulation (reduced, low, or no sugar) between 2018 and 2022 grew at a 38 percent CAGR within APMEA.
Kerry's combined and unique capability in taste and nutrition, and its utilisation and breadth of technologies to enhance taste and improve nutrition and functionality of products, make it an incredibly resourceful and significant industry player.
"We innovate with our customers to create great tasting products with improved nutrition and functionality while ensuring better impact for the planet."
Kerry's leading consumer insights, global research, development, and acquisitions team of over 1,100 food scientists, and extensive global footprint enable it to solve its customers' complex challenges with differentiated solutions, no matter where they are.
Stride explained that Kerry's deep innovation expertise and extensive solutions portfolio covering food safety and security, clean label, positive and balanced nutrition, proactive nutrition, and personalised nutrition allows it to help its customers move along the sustainable nutrition spectrum to produce healthier, nutritious products that satisfy consumer demands, feed a growing population and are better for people, society and the planet.
Through its developed taste charts, Kerry has determined several new emerging trends in the beverage industry, particularly regarding flavour. This includes unique flavours, such as finger lime or applewood smoke, to mainstream trends with a twist, for example, citrus, including lemon or lime, combined with yuzu or grapefruit. These unconventional combinations of traditional ingredients present a significant area of growth.
The sugar reformulation movement and industry awareness of food and beverage is growing consistently, with the Australian Beverages Council taking the lead in the Sugar Reduction Pledge within the beverage industry, which has gained significant traction since its introduction in 2018.
Stride added that earlier this year, the Australian Medical Association called for implementing a sugar tax. The increasing cost of sugar is also putting pressure on manufacturers in isolation to tax.
"Price of sugar is highest in over a decade and double what it was two years ago."
Kerry recently launched its Sensibly Sweet campaign to provide solutions, showcasing its latest range, Tastesense Advanced, which offers an affordable alternative to sugar and stevia. This new range can reach over 50 percent sugar reduction, up to 80 percent and is more advanced than single-ingredient solutions, offering benefits across sustainability, taste, and health.
"We understand that taste is a crucial factor in low and no-sugar products, and with Tastesense Advanced, we believe we have provided an excellent solution that will allow manufacturers to create the products consumers want."
As well as reducing sugar, it supports Kerry's sustainability pledge by reducing carbon emissions by 30 percent and water usage by 45 percent, compared to sugar, and this aligns with the demand for superior tasting and healthier food options.