Bakery Sweetener Market Report

Technological progress offers a major chance for the bakery sweetener industry by allowing the creation of more effective, healthier, and affordable options. With consumer tending towards healthier options, progress in food technology has led to the development of sweeteners that meet these new demands while still providing the desired taste and function in baked goods. The increased focus on lowering sugar consumption while maintaining taste has led to advancements in the bakery sweetener industry, enabling the availability of healthier options without compromising on quality. An important technological advancement is the refinement of enzymes in the production of sweeteners.

Advances in enzyme technology have improved the efficiency of producing high-fructose corn syrup, HFCS, and other sweeteners, leading to cost savings in production and allowing manufacturers to provide competitive prices. For instance, utilizing advanced enzyme processes enables the transformation of starch into glucose syrups with greater yields, ultimately boosting efficiency. Technology has opened up substantial opportunities in the creation of non-caloric and low-calorie sweeteners. Advancements in fermentation technology have resulted in the creation of sweeteners such as stevia and monk fruit, providing sweetness without the addition of calories. These sweeteners are easier to obtain and cheaper now, especially stevia-based ones are becoming more popular in bakeries for mimicking sugar taste but without the health risks of consuming high levels of sugar.

Businesses such as Pure Circle, which is now part of the Ingredion Group, have made significant progress in enhancing the flavour and affordability of stevia, turning it into a feasible choice for mass bakery manufacturing. Furthermore, developments in formulation technology have resulted in the production of sugar substitutes that imitate the functional characteristics of sugar, like texture, browning, and moisture preservation. Polyols such as sorbitol and xylitol are being more commonly utilized in sugar-free baked goods to preserve the desired texture and prolong shelf life, which is crucial for mass-produced bakery goods. These technological advances meet the need for healthier products and provide bakery manufacturers with chances to stand out.

Health concerns present a significant restraint to the growth of the bakery sweetener market as increasing awareness of the negative impacts of excessive sugar consumption continues to influence consumer behaviour and regulatory practices. Many individuals are seeking to reduce their intake of added sugars that can lead to various health issues such as heart diseases and obesity as consumers become more aware about their health. This growing concern is affecting the bakery sweetener market as traditional sugar products are often seen as contributing factor to these health problems. The World Health Organization has published a study that free sugars make up no more than 10% of total daily energy intake. The study spurred efforts to reformulate many food products including bakery items to contain less sugar.

According to a paper published by the American Medical Association in 2023, artificial sweeteners are the potential factors responsible for metabolic health issues. This has led to hesitation among consumers regarding the usage of these artificial sweeteners potentially limiting their adoption in bakery products.  Furthermore, consumer concerns about the clean label campaign where products are free from artificial ingredients and additives, have put pressure on bakery producers to find sweetener solutions that align with these demands. Clean label sweeteners, which often need to be derived from natural sources, tend to be more expensive and less efficient than traditional sugar, presenting a challenge for manufacturers aiming to balance cost-efficiency with consumer expectations.

For instance, stevia and agave syrups are still relatively expensive compared to sugar and other synthetic sweeteners which could deter bakeries from adopting them on a wide scale. In addition to these health concerns, the growing regulatory landscape surrounding sweeteners poses another challenge. Many nations are tightening regulations on the usage of sweeteners in food products, such as the use of certain artificial sweeteners has been subjected to stringent approval processes in the European Union. Health concerns, both from the perspective of consumers and regulatory bodies, serve as a restraint to the growth of the bakery sweetener market, presenting challenges related to consumer trust, product reformulation, and market access.

As bakery sweetener market becomes more and more saturated, many major players try to gain upper hand in the market through product launches. For instance, in March 2024, Incredo, Inc. (U.S.), a food tech company, declared the launch of Incredo Sugar G2, a concentrated version of its worldwide recognized sugar reduction solution, Incredo Sugar. It is a concentrated sugar-carrier complex with a clean-label and patent-pending, ideal for incorporating into baked goods, chocolates, spreads, and gummies. Furthermore, in May 2024, Wisdom Natural Brands, known for their sugar substitute products in the natural market, broadened their range with the introduction of SweetLeaf Xylitol reduced calorie sweetener, consisting of a single ingredient for the first time. Wisdom's sugar substitute has the same sweet taste as sugar but with only 10 calories per serving and none of the harmful impacts on blood sugar levels or dental health.

Additionally, in November 2022, Tate & Lyle PLC announced an addition to its sweetener product portfolio, ERYTESSE Erythritol. Through a strategic collaboration distribution contract with a leading supplier of erythritol, this addition enlarges their ability to help deliver on consumer demand for healthier, sugar and calorie-reduced sweeteners. Similarly, in March 2024, Scotty's Every day, a trusted name in gluten-free, 0-1g net carb, 0g sugar, no-nut-flour baking mixes, announced the launch of their Allulose & Monk Fruit Zero Calorie Sugar Replacement, the sweetener blend.

Moreover, in June 2024, Fooditive Group, a plant-based sweetener manufacturer in the Netherlands, launched its, Keto-Fructose, 5-keto-D-fructose, in the United States. The sugar substitute, undergoing FDA GRAS valuation, is set to create a new standard for sugar alternatives with its taste, functionality, and sustainability. Furthermore, in December 2020, DuPont Nutrition & Biosciences announced the launch of POWERFresh special and POWERSoft cake 8010 in Japan. This range of DuPont Danisco enzymes reportedly offers improver houses and industrial bakeries an outstanding anti-stalling solution that provides a unique texture, premium softness and a longer-lasting freshness to sweet rolls, cakes, breads, and buns while maintaining their shape.

North America is a key region for the bakery sweetener market driven by strong consumer demand for bakery products and the increasing shift towards healthier alternatives. According to the American Bakers' Association, the baking business gives employment to over 0.8 million skilled workers, generates over US$ 42 billion in direct wages, and has an overall economic impact of about US$ 186 billion in the United States. This extensive demand for bakery goods fuels the need for a variety of sweeteners from traditional sugar to more innovative alternatives such as stevia and high-fructose corn syrup. One notable trend in North America is the rising demand for options that are low in sugar as well as calorie, spurred by health enthusiasts seeking to reduce their sugar intake.

This shift is reflected in the increasing adoption of sweeteners that are additive free such as stevia and monk fruit that are commonly used bakery products that are free of sugar or very low in sugar. For instance, stevia-based sweeteners have seen growing use in the formulation of products such as cookies and cakes with brands such as Truvia gaining popularity among consumers. The growing clean label campaign is another significant factor in North America’s bakery sweetener market. Customers are tending towards sweeteners with lesser artificial ingredients encouraging bakery product manufacturers to turn to natural products. Nevertheless, concerns over the potential health risks associated with certain artificial sweeteners have led to increased regulatory scrutiny in North America. This has created opportunities for the market as manufacturers navigate the demand for healthier and natural sweeteners.

Europe represents a significant market for bakery sweeteners driven by strong preference for baked goods and the rising trend of healthy food consumption. The shift towards healthier lifestyles is particularly prominent in various countries of the region where consumers are increasingly avoiding excess sugar and opting for alternatives such as stevia in bakery products. The clean label program is especially strong in Europe where consumers demand transparency and natural ingredients. In addition, plant-based sweeteners are gaining attention with stevia becoming a popular choice for health enthusiasts who want to reduce their sugar intake without compromising on taste.

The European Union has stringent regulations regarding food ingredients including sweeteners which influences market dynamics. The European Food Safety Authority, EFSA, regularly evaluates sweeteners for safety, and their findings can significantly impact market adoption. For instance, concerns over artificial sweeteners such as aspartame have led to scrutiny, prompting manufacturers to explore more natural and acceptable alternatives. Moreover, growing preference for functional foods in Europe, including those with added health benefits such as lower glycaemic indexes, continues to shape the bakery sweetener market, driving demand for low-calorie, low-sugar products that cater to the region's wellness-focused consumers.