Sugar-free Products Market by Type (Beverages, Food Products, Tabletop, Others); Sweetening Type (Sugar Substitute-sweetened Sugar-free Products, Naturally Sweetened); Distribution Channel (Supermarkets & Hypermarkets, Others) - Global Forecasts to 2029

The Sugar-free Products Market is Expected to reach $65.31 Billion by 2029 at a CAGR of 6.2% from 2022 to 2029. Sugar-free products are low-calorie products comprising zero sugar. They are sweetened with sugar substitutes and offer a taste similar to sugar. These products are a healthy alternative to products that contain sugar as they help reduce calories and help prevent diabetes & obesity.

The growth of this market is driven by factors such as the rising incidence rate of diabetes, the rising demand for low-calorie foods, and sugar taxes imposed on sugary drinks. However, the higher prices of sugar-free products restrain the growth of this market.

The Impact of COVID-19 on the Sugar-free Products Market

The outbreak of the COVID-19 pandemic had a significant impact on the global economy. Several countries imposed lockdown restrictions to curb the spread of the virus and ensure social distancing. These countrywide lockdowns affected travel & transportation and all non-essential trade. Many industries were impacted due to challenges in manufacturing and distribution operations globally. The sugar-free products industry faced significant disruption due to broken supply chains and raw material & workforce shortages. In addition, imports and exports were restricted or delayed across many countries.

However, the COVID-19 pandemic drove the adoption of best-practice models in the food industry as it highlighted the importance of hygiene and nutritious foods with reduced sugar, calories, and fats in preventing diseases. The food industry witnessed an unprecedented demand, particularly for low-calorie food products.

According to an article published by the Massachusetts General Hospital in August 2021, cutting down 20% of sugar from packaged foods and 40% from beverages could prevent 2.48 million cases of cardiovascular disease, 490,000 deaths related to cardiovascular disease, and 750,000 diabetes cases in the U.S. Therefore, many companies in the food industry have already started cutting down sugars and producing sugar-free products, either naturally sweetened or sweetened with sugar substitutes.

Moreover, there was a rise in the demand for no-sugar & immunity-boosting products as people sought solutions to boost overall health and wellbeing. The COVID-19 pandemic also compelled health-conscious customers to turn to low-calorie or sugar-free products. Hence, consumers’ increasing health consciousness and the high demand for low-sugar solutions encouraged manufacturers and product formulators to focus on sugar-free food & beverages.

The pandemic also spurred a shift toward healthy living, improving people’s food habits. For instance, according to the Food Information Council survey 2021, in 2020, 85% of Americans changed their food habits, and in 2021, 39% followed specific diets. These changing food habits boosted the healthy living trend in the U.S., further driving the demand for sugar-free products in the country.

Thus, growing health & wellness concerns, the growing demand for dietary supplements, and the increasing consumption of no-sugar & low-calorie food products are expected to drive the growth of the sugar-free products market.

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Sugar Taxes Imposed on Sugary Drinks

The overconsumption of sugar has led to the increased global prevalence of obesity, diabetes, tooth decay, and chronic diseases. Considering the negative health effects of sugars, the WHO recommends reducing sugar intake to 5% of daily energy intake. Government organizations in over 50 countries have levied sugar taxes on sugar-sweetened drinks to reduce their increasing consumption.

Sugar taxes levied on sugar-sweetened drinks by some of the countries are as follows:

• In 2013, Chile levied a 13% tax on non-alcoholic drinks. In 2014, this tax was raised from 13% to 18% for soft drinks with at least 6.25 g of sugar per 100 ml. In contrast, the tax was decreased from 13% to 10% for soft drinks with less than the abovementioned quantity of sugar.
• In 2014, Mexico introduced a volumetric SSB tax, leading to an 11% rise in the prices of soft drinks.
• In 2015, the U.S. introduced a 1 cent tax per fluid ounce SSB, resulting in an average price rise of 0.83 cents per fluid ounce.
• In 2017, Portugal introduced a two-tiered SSB tax.
• In 2018, the U.K. introduced an SSB tax. Drinks containing more than 8 g of sugar per 100 ml are taxed at GBP 0.24 per liter, and those containing 5 to 8 g of sugar per 100 ml are taxed at GBP 0.18 per liter.
• In 2018, South Africa introduced a 10% tax, called the Health Promotion Levy, on sugary drinks, excluding fruit juices.

In France, soft drinks are up to 3.5% more expensive due to taxes on drinks with added sugars. Thus, regulatory pressure in the form of sugar taxes has encouraged beverage industries to adopt sugar substitutes and produce sugar-free drinks, driving the growth of the sugar-free products market.

Key Findings in the Sugar-free Products Market Study:

The Sugar-free Beverages Segment to Dominate the Sugar-free Products Market in 2022

Based on type, the sugar-free products market is segmented into sugar-free beverages, sugar-free food products, sugar-free nutrition and health supplements, tabletop sweeteners, and other sugar-free products. In 2022, the sugar-free beverages segment is expected to account for the largest share of the sugar-free products market. The large market share of this segment is mainly attributed to the health benefits of sweeteners in beverages (including weight control and prevention of type 2 diabetes) and the increasing number of product development and launches of sugar-free beverages. In addition, the increasing demand for natural health & sports drinks with enhanced nutritional value further boosts the growth of this segment.

The Sugar Substitute-sweetened Sugar-free Products Segment is Expected to Register the Fastest Growth Rate During the Forecast Period

Based on sweetening type, the sugar-free products market is segmented into sugar substitute-sweetened sugar-free products and naturally sweetened sugar-free products. The sugar substitute-sweetened sugar-free products segment is slated to register the highest CAGR during the forecast period of 2022–2029. Sugar substitute-sweetened sugar-free products have low caloric value and help reduce sugar intake without compromising taste. These benefits of sugar substitute-sweetened sugar-free products are attributed to the growth of this segment in the sugar-free products market.

In 2022, the Supermarkets & Hypermarkets Segment is Expected to Account for the Largest Market Share

Based on distribution channel, the sugar-free products market is segmented into supermarkets & hypermarkets, specialty stores, online retail, convenience stores, and other distribution channels. In 2022, the supermarkets & hypermarkets segment is expected to account for the largest share of the sugar-free products market. The large market share of this segment is attributed to increasing urbanization, rising per capita disposable incomes, consumers’ increasing adoption of healthy eating habits, and rapid growth in the urban population.

North America: The Largest Regional Market

The sugar-free products market is segmented into five major regions: North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2022, North America is estimated to account for the largest share of the sugar-free products market. The major share of this regional market is attributed to the increasing number of obese and diabetic population, growing health and wellness concerns, a well-established food and beverage industry, and strong demand for sugar-free products. Additionally, the presence of prominent players offering sugar-free products across different sectors further supports the growth of the market in the region. However, Asia-Pacific is slated to register the fastest growth rate during the forecast period of 2022–2029.

Key Players

The report includes a competitive landscape based on an extensive assessment of the key growth strategies adopted by key market players between last four years. Some of the key players operating in the sugar-free products market are The Hershey Company (U.S.), PepsiCo, Inc. (U.S.), The Coca-Cola Company (U.S.), Nestlé S.A. (Switzerland), Mars, Incorporated (U.S.), The Kraft Heinz Company (U.S.), Mondelēz International, Inc. (U.S.), LINDT & SPRUNGLI AG (Switzerland), GLANBIA PLC (Ireland), Galletas Gullón S.A. (Spain), and Zydus Wellness Ltd. (India).

Scope of the Report:

Sugar-free Products Market, by Type

• Sugar-free Beverages
• Sugar-free Food Products
  • Sugar-free Bakery Products
  • Sugar-free Confectionery
    • Gums & Mints
    • Chocolate
    • Sweets & Candies
  • Sugar-free Dairy Products
  • Other Sugar-free Food Products
• Sugar-free Nutrition & Health Supplements
• Table-top Sweeteners
• Others Sugar-free Products

Sugar-free Products Market, by Sweetening Type

• Sugar Substitute-sweetened Sugar-free Products
  • Polyols
  • Sucralose
  • Stevia
  • Acesulfame Potassium (Ace-K)
  • Luo Han Guo (Monk Fruit) Extract
  • Saccharin
  • Neotame
  • Aspartame
  • Other Sugar Substitutes
• Naturally Sweetened Sugar-free Products

Sugar-free Products Market, by Distribution Channel

• Supermarkets & Hypermarkets
• Convenience Stores
• Online Retail
• Specialty Stores
• Other Distribution Channels

Sugar-free Products Market, by Geography

• North America
  • U.S
  • Canada
• Europe
  • Germany
  • France
  • U.K
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • Australia
  • Rest of Asia-Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa

Key Questions Answered in the Report: