Will sugar replacement producers’ race to win custom turn sour?

We’ve entered a new era in our love-hate relationship with sugar. After decades of trying to make substitutes work for consumers, the sugar-alternative industry is fielding contenders with a better chance at unseating that ubiquitous substance.

The timing seems to be right. According to a recent survey by market research firm Euromonitor, 37% of consumers globally are looking for products with no sugar, no added sugar or low sugar. Overconsumption of sugar has long been connected to disease — it’s cited as a contributing factor to obesity, which has tripled globally since the 1970s, and cardiovascular disease, which is the world’s leading cause of death. Obesity is also a factor in type 2 diabetes, which afflicts hundreds of millions of people worldwide.

In a 2021 nutrition survey on reasons to avoid sugar, more than 57% of respondents said doing so “makes them feel healthier”. An equally high percentage reported “it’s better for me to avoid these ingredients”. The coronavirus pandemic has helped accelerate this trend, as about 79% of global consumers said they’re planning to eat and drink more healthily over the next year, according to a report by consumer research firm FMCG Gurus. Of those consumers, 56% plan to reduce sugar intake. 

In most cases, the new crop of sweeteners are derived from natural substances, including traditional sugar, otherwise known as sucrose. In a consumer market increasingly focused on healthier eating, that may come in handy. 

The mountain, however, is high. Despite decades of medical admonitions, sugar is still pretty much everywhere. It’s now found in 60% of packaged foods sold in the US, which has one of the highest sugar intakes of any nation. One reason for this is clear to anyone who has tried traditional sugar substitutes. Few come close to matching the taste of sucrose in consumer taste tests or have the range in formulation for moisture, flavour and texture suitable for use in packaged foods.

Indeed, Rabobank analyst Pablo Sherwell said 85% of all sweeteners consumed are still traditional sugar. All told, it’s a $100bn (about R1,5-trillion) market. “The industry isn’t concerned,” he said.

But that may not be entirely the case. One industry trade group is already pushing back on how substitutes are presented to consumers. The US Sugar Association, which says it represents 142,000 growers, processors and refiners of sugar, said it has asked the US Food and Drug Administration (FDA) to change labelling requirements to make it clearer when products contain alternative sweeteners.

According to makers of sugar substitutes, Big Sugar has good reason to worry. But among the would-be challengers, taste isn’t the only problem: price is an issue, too.

According to makers of sugar substitutes, Big Sugar has good reason to worry. But among the would-be challengers, taste isn’t the only problem: price is an issue, too.

Allulose

Most prominent among alternative sweeteners is a rare type of sugar called allulose. First discovered in wheat in the 1940s, it’s a third less sweet than sugar, but it also has a 10th the calories. In 2019, the FDA said allulose could be removed from the “added sugar” line on “nutrition facts” labels because, unlike sucrose, which is quickly broken down by enzymes and turned into glucose, most allulose is excreted in urine, meaning it doesn’t significantly impact blood sugar levels. Another benefit is that it doesn’t promote bacteria growth, which can cause cavities. 

Tate & Lyle, a $3bn (about R45bn) food and beverage ingredient supplier, makes a version of allulose that’s “non-GMO Project verified” to appeal to food brands marketing themselves to health and environmentally conscious consumers. The sweetener is already found in a wide range of packaged foods, such as cake mixes and biscuits. It’s also used in sweets and low-carb bread.

“Consumers are now actually looking at sugar and added sugar with as much importance as total calories,” said Abigail Storms, global head of specialty sweeteners at Tate & Lyle. Demand has swelled of late, she said, because of a pandemic proclivity for snack foods and ice cream, and due to interest in the “keto” diet, which prescribes an extremely low carbohydrate count. 

However, the expense of production may be an obstacle to mass adoption. Though found naturally in some plants, making allulose in bulk requires it be produced mostly from maize in a complex chemical reaction. It’s a hurdle other types of sweeteners must overcome as well. 

Incredo

Made in Tel Aviv by Israel-based DouxMatok, Incredo is a re-engineered version of sucrose touted as sweeter. Though it still has the same potential health problems that flow from sucrose, less of it is needed to sweeten foods the same way.

About 80% of what humans consider sweetness in sugar is lost on them. Sugar molecules are tightly bound — most fail to interact with taste buds during chewing. DouxMatok said it has managed to insert tiny silica granules (a common food additive used in baking) into sucrose, which enables more sugar to spread out and be tasted before swallowing.

Two years ago, the company sent a sample to Lior Lev Sercarz, owner of La Boîte, a spice shop in Manhattan. Sercarz said he had already been on the hunt for a sugar substitute that didn’t sacrifice flavour and DouxMatok’s seemed to fit the bill. “We didn’t have to add anything else to compensate,” he said.

David Tsivion, DouxMatok’s chief technology officer, said the company is hoping to land contracts with US food manufacturers that produce biscuits and spreads. But first the company needs to reach price parity with sugar. Sercarz won’t share what the pricing for his product is, but said it’s definitely higher.

Supplant

Supplant is on the other end of the spectrum — it’s less sweet, according to company founder Tom Simmons. His goal isn’t to replace table sugar — he wants to replace it in everyday food products.

Cambridge, England-based Supplant grinds leftover fibre from plant waste, such as corn cobs, oat fibres and wheat bran, then applies an enzymatic process to break it down into a dry white powder. The resulting product has similarities to sucrose, but is lower in calories and slower to raise blood sugar levels, Simmons said. Like sucrose, it includes small chains called disaccharides which allow it to bake and taste like sugar. And because it’s made from plant waste, it includes prebiotic fibre, which helps slow the body’s absorption of carbohydrates.

Sugar reduction in drinks was solved 40 years ago with diet soda. But for food products it was an unsolved problem. What we want to push back on is extensive use of white refined [sugar] that’s flooding the food system.

—  Tom Simmons, Supplant

“Sugar reduction in drinks was solved 40 years ago with diet soda. But for food products it was an unsolved problem,” he said. “What we want to push back on is extensive use of white refined [sugar] that’s flooding the food system.”

But to do that you need something that outperforms traditional sugar in bulk, browning and caramelisation. Chef Thomas Keller, owner of Per Se in New York City and The French Laundry in California, said he’s been testing Supplant for the past year and a half. “These things are very intriguing for chefs,” he said. “We’re constantly looking for ways to make [food] more nutritious.”

When he first tried to entirely swap traditional sugar for Supplant, he said it was a “real struggle”. His test vehicle was a shortbread biscuit he’s been making for 27 years. The version he sells today uses a 50-50 blend of Supplant and sugar. But Keller still views it as a success: “If everyone was eating half the sugar they eat today ... that changes the world.”

Another baker testing Supplant is Angela Diaz, owner of You’re a Cookie, a direct-to-consumer bakery in Chicago. At first she was sceptical. “I’m not a big fan of replacement sugars because they leave an aftertaste,” she said. Supplant, however, “leaves no aftertaste”, she said, adding that it worked well in melted fats or oils. But when baking her biscuits, she also needed to mix it with regular white or brown sugar.

Supplant and Incredo are racing to win over customers, but neither is close to allulose when it comes to market penetration. During the pandemic, London-based Tate & Lyle ran into production difficulties because of high demand, a situation that could repeat itself if a potential US customer approves its use.

Allulose is “Generally Recognised as Safe” (GRAS) by the FDA, a status based on submissions by the manufacturer and outside experts, not formal government studies. DouxMatok already has GRAS status and Supplant said it plans to seek it too. In the EU, however, allulose still awaits approval as a “novel ingredient”, which requires scientific review.

Comprehensive or independent medical studies of these sugar alternatives is largely lacking. DouxMatok hasn’t done any studies backing the safety of its ingredient and Supplant said it’s done one small, clinical trial. Its data, the company said, showed that consumption of its product triggered an 85% lower glycemic response than sugar. 

Dr Michael Greger, a physician and author of nutrition books including How Not to Diet, said allulose may be the most promising candidate to replace sugar, but “we just don’t have a lot of good human studies that put it to the test”. As a result, he’s not ready to recommend it for human consumption.

Another medical expert said the entire debate may be a false one, since imitation sugar could end up being just as bad for you.

Dr Robert Lustig, a paediatric endocrinologist at the University of California at San Francisco, said it’s still unknown whether putting anything sweet on a human tongue sends the same message to the brain. It’s possible, he said, that an insulin response is triggered regardless of it being sucrose or a substitute. The pancreas controls insulin response and that controls weight gain, he explained.

“All of these companies are running around trying to figure out what to do to mitigate the negative effects,” said Lustig. “The right answer is to de-sweeten our lives.”

— Bloomberg News. More stories like this are available on bloomberg.com