Analysis of the South African Food Sweetener Market
Of the companies that produce raw sugar in South Africa, Illovo Sugar Limited, TSB Sugar RSA Limited, and Tongaat-Hulett Sugar Limited have a combined market share of %.
Three key drivers for sugar consumption include: a relatively high per capita consumption of sugar, the dependence of segment growth on population growth, and stronger industrial sugar consumption growth compared to direct sales.
Three key restraints include: Health concerns on sugar consumption and potential government intervention, flat demand and reduced profitability for locally-produced sugar due to cheap imports, and adverse cost structures on sugar production.
As a result, sugar consumption is expected to grow at a CAGR of % to reach tonnes by 2019. The forecast is, however, subject to weather conditions, additional cane planting, and increased local sugar production.
The majority of polyols consumed in South Africa are imported, however, Tongaat Hulett Starch does manufacture sorbitol at its Chloorkop facility in the Gauteng province.
Three key drivers for polyol consumption include: Its role as a sugar substitute and ability to use a ‘sugar-free’ claim, the variety of health-related benefits (reduced calories, better blood glucose and insulin stability, and non-cariogenic properties), and array of functional benefits.
About this report
This market insight provides an overview of the South African sweetener market and provides forecasts for sugar consumption, polyol consumption, and non-nutritive sweetener consumption in volumes, until 2019. The drivers and restraints for each segment are outlined, in addition to a discussion on the potential impact of the proposed regulations published by the South African Department of Health (29 May 2014) on the sweetener market. Lastly, the study highlights international sweetener trends that may become pertinent to South Africa in the next 5 to 10 years. Conclusions and strategic recommendations are provided.
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