Sugar price soar in Europe18 May 2023
Given the rising cost-of-living, global consumers are replacing eating out with affordable, indulgent treats at home and on the move. However, a surge in the price of sugar is causing concern amongst consumers.
The cost-of-living crisis is fuelling demand for affordable indulgence
Despite efforts to curb food spending, consumers are increasingly on the lookout for affordable indulgences to enjoy at home or on the go. To offset a reduction in spending in the foodservice sector, almost half (46%) of consumers are seeking premium products and treats at retailers, FMCG Gurus data shows. A further 41% have upped their spending on bakery items such as cake and pastries in recent months.
The surge in demand for indulgent treats presents an opportunity for food brands to offer products that deliver affordable pleasure while satisfying the premium retail market. Seeking pleasure and escapism from food, global shoppers are prioritising small and frequent luxuries, with close to three quarters (73%) reportedly opting for indulgent treats at least once per week, according to FMCG Gurus.
Rising sugar prices could offset consumer demand for sugary treats
The rising cost of sugar, however, could present a challenge to food manufacturers hoping to boost their production or sales of sweet snacks in the coming months.
Since August 2021, the price of sugar has soared, up 61% in February and March 2023 in the EU. Czechia (98%), Estonia (97%), and Poland (82%) are amongst the countries the worst affected by the sugar price spikes in the European Union (EU), data from the EU commission shows. The same was observed globally as the sugar price index hit 127 in March, the highest since October 2016, according to a report by the FAO.
Some brands are responding to the steep rise in the price of sugar by boosting the cost of various products including ice cream, confectionery, and beverages across the world. In South Korea, the price of a 350 millilitre can of the popular soda Coca-Cola rose by 5%, and Lotte Wellfood's Pepero cookie sticks and World Cone ice cream rose by 13.3% and 20% respectively.
Last February, Coca-Cola announced plans to raise the price of its sodas at a moderate pace across the world in 2023. Last year, the brand’s average selling price rose by 11%, compared to competitor PepsiCo, whose prices increased by 14%, according to Reuters. Following a fall in demand in Europe during the last quarter, unit case volumes for the soft drink reportedly fell by 1%.
Consumers look to curb their spending on food and drink products
As inflation rates continue to fluctuate globally, many consumers are adopting recessionary style behaviours to combat the rising cost of living. This has led to reduced spending on non-essential food costs, such as dining out at restaurants and cafes. According to a recent survey conducted by market researcher FMCG Gurus, close to eight in ten (77%) global consumers have reduced their spending at restaurants and cafes over the last six months in response to rising food prices.
Last month, the Food and Agriculture Organization’s (FAO) price index, which monitors the price of global food commodities, rose for the first time in a year from 126.5 to 127.2 points. Despite the recent falling cost of certain foodstuffs including dairy, cereals, and vegetable oils, consumers are currently facing hikes in the price of sugar, meat, and rice.
This is causing concern amongst consumers, with 59% of global consumers displaying uncertainty in their financial savings, according to FMCG Gurus. Research by Barclays bank found that the vast majority (88%) of UK consumers were concerned about rising food prices, with 62% looking for ways to reduce their spending on groceries, which climbed by over 7% in March.
Should brands make healthy products more affordable?
17 May 2023
Do health and wellness products need to be affordable or are consumers willing to pay a premium for a health benefit despite the cost-of-living crisis? We asked two leading market experts – and received different answers.Read more
Michelle Obama launches healthy food and drink brand for kids
16 May 2023
Former US First Lady Michelle Obama is entering the consumer packaged goods space with Plezi Nutrition, a new healthy food and beverage brand for children.Read more
High price of healthy eating in Thailand impacts young people
4 May 2023
Consumers in Thailand say they want to eat healthier but that fresh, nutritious food is too expensive and inaccessible for the average person, according to Mintel.Read more
Health innovation takes centre stage at Vitafoods Europe
26 Apr 2023
In just two weeks, Vitafoods Europe will showcase the biggest nutraceutical innovations, trends, and startups thanks to its conference programme with expert speakers, Future of Nutrition Summit, and Startup Innovation Challenge.Read more
California toxic panel approves ban on five chemical food additives
24 Apr 2023
The California Assembly’s toxic panel has approved a ban on five food additives – brominated vegetable oil, potassium bromate, propyl paraben, Red Dye No. 3, and titanium dioxide – in food and drink products, with supporters hoping brands will reformu...Read more
Italy looks to ban cell-based meat to preserve food heritage
11 Apr 2023
Italy has moved to ban the use of cell-based food, citing quality issues and the preservation of the country’s gastronomic heritage – but the government faces criticism from food industry groups.Read more
Frugal food shoppers economise and make trade-offs to tackle inflation, says Deloitte
15 Mar 2023
Rising prices are making consumers around the world increasingly frugal, with some only buying essentials and others purchasing lower-cost meat and ingredients to manage spiraling food inflation, according to a new report by Deloitte.Read more
FrieslandCampina Ingredients expands into animal-free dairy sector
19 Jan 2023
A partnership between FrieslandCampina Ingredients and Triplebar Bio will bring animal-free dairy protein to market, a sustainable alternative to traditional dairy protein produced via precision fermentation.Read more
Kerry to sell sweet ingredients portfolio for €500m to IRCA
18 Jan 2023
Irish ingredient supplier Kerry will sell its sweet ingredients business to Italian food ingredients maker IRCA for €500 million as it looks to focus on areas where it can create the most value, its CEO said.Read more
Danone sued by environmental groups over its global plastic pollution
16 Jan 2023
A group of environmental groups, led by ClientEarth, is suing Danone for failing to adhere to France’s duty of vigilance law through its use of single-use plastic and pollution.Read more