Bright Future For Functional Sugar

Wednesday, August 10th, 2016 | 740 Views

With the growing traction of plant protein drinks in China, international consulting company CCM predicts a strong future for functional sugar.

After a decade (2003-2012) of golden development period of China’s beverage industry with a compound annual growth rate of over 20 percent, growth has slowed down significantly in recent years. However, today plant protein drinks are deeply favoured by Chinese consumers. It is reported that currently the sales volume and sales figures number 5.84 billion litres and US$11.0 billion, up 21.6 percent and 28 percent year-on-year, respectively.

With the rapid economic development and improvement of people’s living standards, consumers are gradually paying more attention to the quality of products. As the per capita disposable income in China rises, products that conform to consumer demands are becoming more popular. That’s why the plant protein drinks, which stress ‘nature’, ‘nutrition’ and ‘health’, are favoured.

Per capita disposable income in China, 2011-2015

National Bureau of Statistics
Plant protein drinks are milky beverages made by using raw materials such as soybeans, peanuts, almonds, walnuts and coconut.

Compared with other beverages, plant protein drinks are rich in nutrition and enjoy the advantage of ‘health’, as they contain high-quality protein, unsaturated fatty acids, essential amino acids, vitamins and minerals.

In order to meet consumer demands for better taste and health, functional sugar plays an increasingly important role. It’s well known that the surge of plant protein drinks in recent years is due to the upgrade of the consumption concept, which focuses more on the nature, nutrition and health of food. Fortunately, the combination of plant protein drinks and functional sugar can be an effective approach to realise it.

Functional sugar includes functional sugar alcohol, oligosaccharide and dietary fibre. Examples of functional sugar alcohol include erythritol, sorbitol, malt sugar, and xylitol.

These can be a substitute for sugar because they share some similar attributes with sugar with the exception of the calorie content and sweetness, which are relatively low. Without causing obvious increase of insulin in vivo, some sugar alcohols can be added into many kinds of foods which require a sweet taste yet not sugar.

What is more, sugar alcohol itself has a positive influence on health. With a low caloric content, it reduces the likelihood of glycopenia (shortage of glucose), facilitates better insulin response, and prevents caries (tooth decay or cavities). Further, it can improve the quality of food and prevents the coming or worsening of chronic diseases.

The development of functional sugar alcohol is rapid in China at the moment. No matter the technology, raw materials or price, it is becoming increasingly accepted by the market.

Take erythritol as an example, its industrialisation was first developed in China in 2004. However, the price was relatively high due to the immature technology and production facilities. In recent years, the price has begun to fall, thanks to the fermentation technology development.

According to CCM’s price monitoring, the average price of erythritol in 2011 was US$4,900 per tonne (t), but that figure in 2015 had fallen to US$3,900/t, and then fell slightly to US$3,700/t in the first half of 2016.

What is more, the cost reduction of erythritol also benefits from the price fall of glucose monohydrate, which is the main raw material of erythritol production. In the first half of 2016, the average price of glucose monohydrate was down by 35.8 percent year-on-year to US$450/t.

Ex-works price of erythritol in China, January 2015-June 2016

Currently, there are three key erythritol producers in China, namely Zibo Zhongshi Gerui Biotechnology Company Limited, Binzhou Sanyuan Biotechnology Company Limited and Baolingbao Biology Company Limited.

The consulting company predicts that with the enlarging market demand, more advanced technology and the decline of raw material price, the erythritol is expected to be embraced by the market further. Besides erythritol, other functional sugar, including xylitol, sorbitol and maltitol, will get more recognition by the market.

With the implementation of two-child policy and the process of urbanisation, the potential for per capita consumption and product upgrading will be enlarging. Thus, it is predicted that the plant protein industry will remain an annual growth rate of 20 percent or so in the next three years and the sales figure will reach more than US$22.61 billion in 2020. Given that, the consulting company thinks the functional sugars, marked by ‘health’, will be applied in a wider range.