Sugar-reduction regulations: What’s going on in Asia-Pacific?

Photo © AdobeStock.com/bogdandimages

Consumers all over the world enjoy indulging in sweets. Just like the rest of the world, however, Asia-Pacific consumers have seen a rapid increase in lifestyle diseases like diabetes and obesity, making the APAC region home to one of the highest numbers of sufferers.

According to reports from the Malaysian government, from 1996 to 2015, the prevalence of adult overweight and obesity rose from 21.0% to 47.7%. Along with the rise in overweight and obese adults, the prevalence of diabetes increased, rising from 11.6% in 2006 to 17.5% in 2015. Other APAC nations report similar observations.

The good news is that a majority of Asian consumers are now moderating or reducing their sugar intake, according to numerous consumer surveys carried out in the region. This trend is more pronounced in Southeast Asian countries, where sugar consumption was traditionally on the higher side.

A sweetener that can make food and beverage products healthier, while maintaining the sensory qualities consumers enjoy, is urgently needed. Food and beverage ingredient producers are developing reduced-sugar options, as consumer concerns over these health issues will only grow and with the pandemic sharpening focus on healthy foods and beverages that support better living.

Sugar Reduction Opens Doors

Typically, the majority of the demand for reduced- or sugar-free products is driven by younger consumers. But as time goes on, more and more consumers are expressing a need for reduced sugar in their products due to health issues and growing awareness.

In APAC, the number of products touting less- or no-sugar claims has increased significantly over the past few years in categories like confectionery, chocolates, dairy, and bakery. The most common claims in APAC are “no added sugar,” “reduced sugar,” and “sugar-free,” which have seen growth of 50%–60% over the previous five years. There have been significant reductions in the amount of added sugar consumed on average across a variety of product categories, including baby food, energy drinks, and breakfast cereals, among many others.

Aspartame, acesulfame K, and other such artificial sweeteners have become common in the area, especially in a variety of beverages. However, these sweeteners have witnessed an evident negative growth. By contrast, innovative natural sweeteners, including stevia, monk fruit, allulose, and others, have been widely used in product formulations in recent years as more nations accept these ingredients.

Apart from challenges in maintaining the texture, taste, and mouthfeel of traditional sugar-based products, formulators also have to consider the cost implications of these alternatives, as sugar is definitely a cheaper sweetener in the region. The higher cost of the updated formulations may not be a significant barrier in the space, though, as consumers’ interest in their health is growing along with their expendable income.

Taxes and Other Regulations for Actionable Sugar Reduction

In order to combat the need for moderate sugar consumption and promote innovation in the area of alternative sweeteners, sugar taxes have been implemented and have been successful in lowering sugar-consumption rates in nations like Cambodia, India, Laos, Malaysia, Sri Lanka, Thailand, and the Philippines. In addition to these regulations, more innovative, comprehensive, and focused government interventions are helping to change consumer behaviors, and a few of them have even been effective in the area.

The main initiatives and results of the sugar reduction initiatives put forth by the major APAC nations are listed below.

The Philippines

According to studies, from 2005 to 2015, the Philippines saw a 44% increase in the consumption of sugar-sweetened beverages. As a result, the nation enacted the Tax Reform for Acceleration and Inclusion (TRAIN) Law in 2017, which imposed an excise tax on sugar-sweetened beverages with the aim of achieving their shared objective of fostering a healthier society in the area. The Association of Southeast Asian Nations (ASEAN) members recognized this strategy as an effective fiscal policy intervention just two years after it was put into place.

Australia

Australia claims that type 2 diabetes, which costs Australian taxpayers $14.6 billion in healthcare costs annually, is one of the biggest problems facing the country’s healthcare system. According to a 2018 announcement from the Australian Beverages Council, the nation’s non-alcoholic beverage producers have committed to reducing the amount of sugar in their products by 20% by 2025. As of 2021, sales of soft drinks will be dominated by low- or no-sugar varieties, which will account for more than half of total sales. Additionally, the total amount of sugar in non-alcoholic beverages produced in Australia has also decreased, from 6.02 g/100 ml in 2015 to 5.05 g/100 ml in 2021, a 16% decrease. Approximately 2% of the sugars in Australians’ diets now come from these beverages, so it appears that the industry initiative is in fact a progressive step in sugar reduction. Hence, the current reformulation targets in Australia may achieve only a small reduction in the overall sugar intake of consumers in the region.

China

The world’s most populous nation, China, also has the highest percentage of obese people. As reported, the rate of overweight and obesity in Chinese children and adolescents increased rapidly from 6.6% in 2002 to 19.0% in 2020—an alarming growth. In order to combat these high obesity rates, the government wants to gradually reduce per-capita sugar consumption from 10.5 g/day per day in 2012 to 5 g/day by 2030, a reduction of 17%. This strategy started with initiatives to help citizens adopt healthy diets and regular exercise regimens. In 2016, government guidelines were published, advising people to consume no more than 50 g of added sugar per day and preferably no more than 25 g. The government also revealed strategies to encourage the use of natural sweeteners in the processed food sector and to encourage retailers to designate separate shelf space for products with low sugar, salt, and fat content.

Singapore

The International Diabetes Federation’s most recent statistics show that over one-third of Singaporeans have hypertension and that 14.2% of adult Singaporeans have diabetes. The Singaporean government has outlawed all media advertisements for sugary drinks in order to combat such lifestyle diseases. The front-of-pack Nutri-Grade labeling system, which is well-liked in Europe, was implemented in Singapore for non-alcoholic beverages in 2021. Sixty percent of packaged non-alcoholic beverages sold in Singapore after the labeling system is in place will be classified as Grade C or D under the Nutri-Grade system due to their high sugar content. The government hopes that such negative grading and the prevention of advertisements will bring down overall sugar consumption.

In a Nutshell

It is only a matter of time before low- or no-added sugar products become widely available among the food and beverage products available in APAC, given the multiple-pronged approaches taking place to reduce sugar intake in the region. Consumers in the region have consistently listed their health and wellbeing as one of their top five concerns; therefore, taxes and other regulations would be very supportive of this consumer trend toward healthier, non- or low-sugar alternatives. It will be fascinating to observe the cutting-edge natural sweeteners that will undoubtedly seize the market and alter the future of the food and beverage industry in APAC going forward.

About the Author

Sreedevi Kakkad (sreedevi.k@chembizr.com) is a project leader for the food and nutrition segment at ChemBizR. ChemBizR is a boutique business research and consulting partner of chemical companies globally, involved in addressing companies’ critical business challenges and strategic growth initiatives to help them transform their enterprise for sustainable growth in a highly competitive and rapidly evolving environment. For more information, e-mail connect@chembizr.com.