Ascending consumer awareness about the consumption of naturally derived food ingredients is expected to continue underpinning the demand for naturally derived sweeteners over the upcoming years. Being perceived as a potential replacement to conventional sugars, naturally derived sweeteners are likely to demonstrate promising consumption through the next decade. High traction for plant-based sweeteners or those sweetening agents that contain only naturally sourced ingredients is expected to create several opportunities in the consolidated marketplace of naturally derived sweeteners. Furthermore, several governments are extending financial support to encourage natural ingredient cultivation, creating a favorable scenario for farmers especially in developing countries.

By the end of 2028, the global market for naturally derived sweeteners is anticipated to reach the value of over US$ 37 Bn, according to a recent intelligence outlook released by Future Market Insights. With an estimated CAGR of 5.1% over 2018-2028, the global naturally derived sweeteners market is poised to observe a promising growth outlook. Low production cost and higher adoption in multiple end use sectors are supposed to enable APEJ to remain the dominant and most attractive market for manufacturers of naturally derived sweeteners.

Expensive pricing and unfamiliar aftertaste is currently restricting consumer acceptance of natural sweeteners. However, a growing population base is gradually developing the taste for unconventional natural sweeteners, which is foreseen to benefit the growth of naturally derived sweeteners market. While low-calorie F&B products are gathering visible momentum over the past few years, the industry has also been witnessing a paradigm shift in the consumer attitude towards zero-calorie/no calorie foods, more recently. Likewise, the demand for low-calorie sugar replacement products, i.e. sweeteners is anticipated to be triggered in the near future.

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Currently, molasses, honey, and coconut sugar are enjoying higher sales in the market for naturally derived sweeteners. FMI predicts that in the next few years, palm sugar, stevia, and a few other types of naturally derived sweeteners will possibly showcase rapid growth. Based on end use sectorial analysis, the demand for naturally derived sweeteners will remain on a higher side in food and beverages, and pharmaceutical industries. Organic sweeteners will continue to lead by nature, with more than half of the total market revenue throughout the forecast period. FMI forecasts positive growth prospects for organic certified products, fueling the growth of naturally derived sweeteners market in the near future. Moreover, escalating consumer demand for non-GMO, chemical-free, organically cultivated, and fresh and natural products will continue to push the growth of naturally derived sweeteners market globally.

“Naturally derived sweeteners industry is still in its early phase of development as most of the products are yet to be approved or have been recently approved by the authoritative regulatory organizations for usage in various food products. Market penetration into new geographies through strategic partnerships with regional distributors will be observed to emerge as a prominent move of leading stakeholders in the naturally derived sweeteners market. Here, diverse manufacturers are likely to prefer B2B channels for long-term partnerships, with F&B manufacturers.”

Senior Research Analyst, Food & Beverages, Future Market Insights While the leading players – accounting for over 80% revenue share - enable the naturally derived sweeteners market to represent a highly consolidated competitive landscape, management of the supply chain will remain a major concern in the long run. Manufacturers are striving to enhance brand awareness among consumers by increasing the availability of their products on retail shelves. Packaging and labeling are also considered crucial to influence purchasing motives of consumers.

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With zooming focus on improved product quality and profitability, the market for naturally derived sweeteners is likely to witness the backward integration from manufacturers to raw material suppliers, which is believed to offer the competitive advantage to each stakeholder. Manufacturers of flavoring agents, flavored products, and diet beverages/sports drinks are expected to be responsible for the elevating demand for naturally derived sweeteners.

However, high price point will continue to act as a barrier to widespread adoption of natural sweeteners by soft drinks manufacturers. Besides expensive cost, strict regulatory norms regarding the inclusion of naturally derived sweeteners as an ingredient in food products may also remain a major factor expected to restrict adoption in the near future, especially in end use sectors such as bakery and confectionery.

Key players in the region are targeting value-added segments or fortification of their offerings by incorporating key ingredients such as vitamins and micro-nutrients into their products to stand out in the competitive landscape. However, this differentiating strategy has been adopted by very few companies that hold strong potential to penetrate the healthy eating consumer base. FMI projects this strategy to help businesses expand their revenue in the naturally derived sweeteners market. Moreover, as competitive pricing will attract a newer consumer base faster and encourage the sales of naturally derived sweeteners over artificial sweeteners, manufacturers are emphasizing supply chain integration with an objective to achieve the control over final retail price.

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