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Report prepared by: Leatherhead Food International The United Kingdom
September 2004
LIKELY IMPACT OF A POSSIBLE REDUCTION IN THE PRICE OF EU SUGAR
Leatherhead Food International, Randalls Road, Surrey, T: +44(0)1372 376761, www.leatherheadfood.com
Likely impact of a possible reduction in the price of EU sugar
Corneel den Ridder, BSc, MSC
Report Prepared for The Department for Environment, Food and Rural Affairs (DEFRA)
The United Kingdom
Leatherhead, September 2004
N0 00365
Consumer & Sensory Science
Wellbeing, Nutrition & Functional Foods
Leatherhead Food International © 2004 00365
Contents
Text Background ......................................................................................................................... 2
Key objectives.................................................................................................................... 2 Abbreviations..................................................................................................................... 2
Executive summary............................................................................................................. 3 Methodology Overview ....................................................................................................... 4
Sample .............................................................................................................................. 4 Evaluation Method ............................................................................................................. 4 Questionnaire .................................................................................................................... 4
Results and Discussion ...................................................................................................... 5 Description of the Sample.................................................................................................. 5 Industry Findings ............................................................................................................... 7
Sweetener usage............................................................................................................................. 7 Effect of EU sugar reform.............................................................................................................. 11 Effect of greater availability of isoglucose/HFCS .......................................................................... 14 Reform scenarios .......................................................................................................................... 16
Additional Information .......................................................................................................18 Final Conclusions ..............................................................................................................19 About Leatherhead Food International.............................................................................20
Tables Table I: Description of the sample population in absolute numbers ....................................................... 5
Figures Figure 1: Company size in relation to category leader............................................................................ 6 Figure 2: Volume of sugar used per year (Tonnes per year) .................................................................. 8 Figure 3: Factors affecting level of sugar used split according to sugar volume usage ......................... 9 Figure 4: Reasons for looking at sugar reduction ................................................................................. 10 Figure 5: Effect of liberalisation of sugar price on products .................................................................. 11 Figure 6: Effects of fall in sugar prices split according to annual sugar usage ..................................... 12 Figure 7: Replacement of other ingredients with sugar......................................................................... 13 Figure 8: Effect of lifting isoglucose/HFCS quotas on products ............................................................ 14 Figure 9: Replacing other ingredients with isoglucose/HFCS............................................................... 15 Figure 10: Likely increase in sugar usage as a result of changes in the EU sugar regime .................. 16 Figure 11: Likely increase in isoglucose usage as a result of changes in the EU sugar regime .......... 17
Leatherhead Food International © 2004 00365 2
Background
EU Ministers are currently debating possible changes to the EU sugar and sweetener regime
which may lead to some degree of liberalisation of this regime, resulting in reduction in the
cost of sugar in the EU from 2006.
A decrease in sugar price may lead to an increase in sugar levels in processed foods. The
Department for Environment, Food and Rural Affairs (DEFRA) identified a lack of primary
research information concerning indicators of any major shifts in sugar usage as a result of
liberalisation. DEFRA therefore wished to gather data to gather primary research results on
the industry’s awareness of the EU sugar regime and to assess if there was any indication of
serious changes in sugar usage due to liberalisation of this regime.
To this end, DEFRA approached Leatherhead Food International to undertake a survey of
the UK food industry in order to get a better understanding of how the industry was likely to
respond to a fall in sugar prices and a greater availability of isoglucose.
Key objectives •To assess the UK food industry’s response to lower sugar prices
•To assess the UK food industry’s response to a greater availability of isoglucose
Abbreviations The following abbreviations are used;
BCCCA The Biscuit, Cake, Chocolate and Confectionery Association
BSDA British Soft Drinks Association
DEFRA Department for Environment, Food and Rural Affairs
EU European Union
LFI Leatherhead Food International
NPD New Product Development
UKISUG UK Industrial Sugar Users Group
Leatherhead Food International © 2004 00365 3
Executive summary
The food industry’s response to a possible reduction in the price of sugar and a greater
availability of isoglucose was investigated on the basis of responses to a survey
questionnaire. Approximately 882 companies were approached and a total of 67 companies
adequately completed and returned the questionnaire. The combined sugar usage of these
67 companies was approximately 700,000 tonnes per year which accounts for almost 44% of
all sugar used in UK processed foods. Based upon the sample description, it can be
assumed that the conclusions in this report are based upon a representative sample of the
UK food industry using sugar.
Sugar is regarded as an essential ingredient in the manufacture of food. Current sugar levels
are primarily determined by product recipe. The product recipe is to a very large extent
based on consumer preference. When consumer preference is satisfied, secondary factors
are more relevant in determining sugar levels used. The most important secondary
considerations were technical reasons and the price of sugar. Respondents were divided
over the importance of these two secondary factors. Small volume sugar users regarded
technical reasons as being more important, where as large volume sugar users regarded
price as being more important.
Respondents confirmed that the EU sugar reform will have a considerable impact on the
industry. However, due to the complex nature of the issue, it was difficult for respondents to
predict the exact nature of their response to the changes. Around 70% of respondents said
that the price of products would fall should sugar become cheaper. In terms of sugar usage,
however, only 17% of the respondents thought that the amount of sugar in their products
would increase if the price of sugar fell.
The effect of liberalisation of isoglucose/HFCS quotas is expected to have a smaller effect on
companies than the EU sugar reform. The changing quotas of isoglucose/HFCS was unlikely
to have a major impact on sweeteners used. Depending on the exact nature of the reform it
appeared more likely that sugar might replace isoglucose/HFCS, rather than the other way
around.
Leatherhead Food International © 2004 00365 4
Methodology Overview
Sample The target group consisted of food and drink companies that use sugar/isoglucose in their
products. Companies were targeted from the confectionery, soft drinks, and bakery sectors, in
particular. Recruitment was restricted to UK based companies only. Respondents were recruited
using the Leatherhead Food International contact data base.
Evaluation Method Recruiting was performed using electronic mail. A personalised e-mail was sent to a representative
of each of the selected companies. The e-mail briefly outlined the topic and requested respondents
to fill in the questionnaire attached to the e-mail or alternatively, by using the internet following the
provided link. When electronic mailing was not possible, a paper based questionnaire was sent out
(including a stamped return envelope) to the selected respondent.
All respondents were requested to reply within a two week period. One week after the initial mailing
a reminder letter or e-mail was sent to all selected companies. This reminder stressed the
importance of the survey and requested the respondents to fill in the questionnaire if they had not
already done so. An additional week was added to the response time. Together with the reminder
e-mail/letter, a number of follow-up phone calls were also made in order to increase the response
rate.
Questionnaire A questionnaire was designed in cooperation with DEFRA covering the following areas;
General data (industry sector, size), Sweeteners usage (types of sweeteners used, volume of
sugar used), Factors determining sugar level in products, Effect of sugar reform, Effect of greater
availability of isoglucose, Interaction effects between sugar reform and greater availability of
isoglucose (Reform scenarios).
Because participation was voluntary and unincentivised the length of the questionnaire was
restricted with a completion time of approximately 15 minutes.
Leatherhead Food International © 2004 00365 5
Results and Discussion
The results are split into two sections. The first section, titled Description of Sample provides
general details on the participating companies. The second section, titled Industry Findings
provides the results of the questionnaire survey.
Description of the Sample Approximately 882 companies were approached and a total of 67 companies adequately
completed and returned the questionnaire (See Table I) (8% response rate). A copy of the
questionnaire was also sent to the BCCCA (The Biscuit, Cake, Chocolate and Confectionery
Association) and the BSDA (British Soft Drinks Association).
Table I: Description of the sample population in absolute numbers
Companies approached2 Companies responded
e-Mail Post Phone Total Internet Post Fax Total %3
Total 405 337 140 882 31 30 6 67 8 Biscuits 15 16 3 34 5 6 1 12 35 Confectionery 108 67 59 234 11 4 0 15 6 Breakfast Foods 10 6 5 21 4 1 0 5 24 Fruit Juice 13 16 6 35 2 0 0 2 6 Desserts1 12 16 5 33 0 2 0 2 6 Canned Food 13 11 13 37 1 1 2 4 11 Bakery Ingredients 137 124 24 285 1 5 0 6 2 Spreads/fillings 7 9 5 21 0 0 0 0 0 Cakes 0 0 0 0 2 3 0 5 - Soft Drinks 90 72 20 182 4 5 2 11 6 Other 0 0 0 0 1 3 1 5 - 1 This category includes manufacturers of ice cream, desserts and yoghurt. 2 A number of companies have been contacted directly by the BCCA and the BSDA. 3 Response rate.
Due to the small number of responses and low level of sugar usage in the ‘ice
cream/dessert/yoghurt’ category, responses from this category have been grouped together under
‘other’.
When predicting the industry’s response to changes in the EU sugar regime, responses from
category leaders are regarded as being more influential. The majority (81%) of the respondents
classified themselves as being smaller or much smaller than the category leader (See Figure 1A).
When looking at the different food and drink categories, responses were obtained from a category
leader for most products (See Figure 1B).
Leatherhead Food International © 2004 00365 6
Based upon the sample description, it can be assumed that the conclusions in this report are
based upon a representative sample of the UK sugar using industry. Although the sample size is
small, there is a broad spread representing different food industry sectors and company sizes.
Question: How does the size of your company compare to the category leader(s)? (4-point Scale)
A Representation of the company size for the whole group of respondents.
B Representation of company size split by industry sector.
Figure 1: Company size in relation to category leader
Num
ber o
f com
pani
es in
cat
egor
y
5
11
15
5
5
9
60%
27%
87%
20%
50%
33%
66%
20%
22%
20%
36%
13%
40%
33%
34%
60%
66%
9%
20%
20%
27%
40%
50%
34%
12%
0% 100%
Other
B isuits
Confectionery
Breakfast foods
Fruit juice
Canned foods
Bakery ingredients
Cakes
Soft drinks
Much smaller Smaller The same size We are the category leader
6
3
2
4 4 % 3 7 % 5 % 1 4 %
0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 %
M u c h s m a l le r S m a l le r T h e s a m e s iz e W e a r e t h e c a t e g o r y l e a d e r
81% 19%
Leatherhead Food International © 2004 00365 7
Industry Findings The questionnaire consisted of four different sections. The responses to the questionnaire will be
reported according to these four different sections;
1. Sweetener usage
2. Effect of sugar reform
3. Effect of greater availability of isoglucose/HFCS
4. Scenarios
Due to the low response rate in certain industry categories, results by industry category should be treated as a guide to possible trends only.
Sweetener usage
A total of 94% of the respondents stated that sweeteners were important to their product. The main
type of sweetener used by the respondents was sugar (93%). Companies that regard glucose
syrup and artificial sweeteners as their main sweeteners were generally representatives of the soft
drinks industry. Although 26% of the respondents indicated that they used isoglucose/HFCS, none
indicated that was it was the main type of sweetener used.
The annual sugar usage of companies included in this survey ranged from as little as 3 tonnes up
to large volumes such a 125,000 tonnes (See Figure 2A). Total annual usage of isoglucose/HFCS
was considerably lower than sugar (See Figure 2A). The majority of the isoglucose/HFCS users
were from the soft drinks sector. There was some indication that the biscuits and soft drinks
industry used the largest volumes of sugar per company. The combined sugar usage was
approximately 700,000 tonnes per year. This accounts for almost 44% of all sugar used in UK
processed foods.
In order to look at differences in responses between large volume sugar users and small volume
sugar users, respondents were grouped according to their annual usage. Large volume sugar
users were defined as companies using more than 901 tonnes of sugar per annum. Small volume
sugar users were defined as companies using less than 145 tonnes of sugar per annum. Both
groups had 18 respondents in them and made up 33% of the total sample population.
Product recipe was the single most important factor in determining the level of sugar in existing
products (See Figure 3). Product recipe was generally based upon consumer acceptability.
Extrapolating from this, we can say that the sugar level in products was generally claimed to be
determined by consumer acceptability. Technical reasons, the price of sugar, and health concerns
received a medium importance rating. Legislation and availability of sugar were generally seen as
less important in terms of determining level of sugar used in products.
Leatherhead Food International © 2004 00365 8
Question: How much sugar/isoglucose do you use on a yearly basis? (Tonnes per year) A Annual sugar usage.
B Representation of annual sugar usage split according to industry sector.
C Representation of annual sugar usage split according number of employees.
Figure 2: Volume of sugar used per year (Tonnes per year)
34%
14%
50%
75%
20%
22%
22%
14%
50%
22%
22%
22%
14%
40%
11%
11%
30%
25%
22%
30%
40%
33%
22%
45%
50%
50%
12%
0% 100%
Other
B isuits
C onfectionery
Breakfast foods
C anned foods
Bakery ingredients
C akes
Soft drinks
<26 27-150 151-550 551-900 901-3000 3000+
Num
ber o
f com
pani
es in
cat
egor
y8
10
14
2
5
9
4
2
8
10
14
2
5
9
4
2
35%
14%
41%
5%
11%
18%
19%
22%
6%
14%
44%
38%
11%
9%
11%
100%
0% 100%
1 to 50
51 to 200
201 to 1000
>1000
<26 27-150 151-550 551-900 901-3000 3000+
18
21
6
9
Num
ber o
f com
pani
es in
cat
egor
y
18
21
6
9
Num
ber o
f com
pani
es in
cat
egor
y
0 %1 %2 %3 %4 %5 %6 %7 %8 %9 %
1 0 %
< 1 5
1 6 -26
2 7 -60
6 1 -13 0
1 3 1 -20 0
2 0 1 -40 0
4 0 1 -67 0
6 7 1 -85 0
8 5 1 -12 0 0
1 2 0 1 -18 0 0
1 8 0 1 -10 5 0 0
1 0 5 0 1 -22 5 0 0
2 2 5 0 1 +
T o n n e s p e r y e a r
S u g a r
Is o g lu c o s e
Perc
enta
ge o
f com
pani
es
0 %1 %2 %3 %4 %5 %6 %7 %8 %9 %
1 0 %
< 1 5
1 6 -26
2 7 -60
6 1 -13 0
1 3 1 -20 0
2 0 1 -40 0
4 0 1 -67 0
6 7 1 -85 0
8 5 1 -12 0 0
1 2 0 1 -18 0 0
1 8 0 1 -10 5 0 0
1 0 5 0 1 -22 5 0 0
2 2 5 0 1 +
T o n n e s p e r y e a r
S u g a r
Is o g lu c o s e
Perc
enta
ge o
f com
pani
es
Leatherhead Food International © 2004 00365 9
Question: The level of sugar in our products is determined by…
901> = Using more than 901 tonnes of sugar per year (N=18)
<145 = Using less than 145 tonnes of sugar per year (N=18)
Figure 3: Factors affecting level of sugar used split according to sugar volume usage
7%
37%
22%
18%
16%
2%
12%
22%
10%
10%
13%
20%
13%
13%
21%
10%
2%
8%
5%
22%
25%
13%
11%
8%
5%
12%
15%
26%
79%
15%
17%
22%
12%
21%
38%
0% 100%
Product recipe
Availability of sugar
Legislation
Price of sugar
Health concerns
Technical reasons
1 2 3 4 5 6
Mean
5.47
2.85
2.67
3.57
3.43
3.84
5.47
2.85
2.67
3.57
3.43
3.84
Not important Very important
B The availability of sugar
11% 6%
6%
11%
94%
72%
0% 100%
A The product recipe
901>
<145
35%
28%
6%
22%
24%
22%
12%
6%
12%
11%
12%
11%
0% 100%
B The availability of sugar
11% 6%
6%
11%
94%
72%
0% 100%
A The product recipe
901>
<145
35%
28%
6%
22%
24%
22%
12%
6%
12%
11%
12%
11%
0% 100%
D Technical reasons
6%
11%
6%
11%
29%
17%
41%
28%
12%
17%
6%
17%
0% 100%
C Health concerns
901>
<145
6%
11% 33%
12%
6%
24%
11%
29%
33%
29%
6%
0% 100%
D Technical reasons
6%
11%
6%
11%
29%
17%
41%
28%
12%
17%
6%
17%
0% 100%
C Health concerns
901>
<145
6%
11% 33%
12%
6%
24%
11%
29%
33%
29%
6%
0% 100%
F The price of sugarE Legislation
47%
28%
24%
28%
12%
11%
6% 6%
6%
6%
28%
0% 100%
901>
<145 18%
11%
18%
11%
6%
6%
29%
22%
18%
11%
12%
39%
0% 100%
F The price of sugarE Legislation
47%
28%
24%
28%
12%
11%
6% 6%
6%
6%
28%
0% 100%
901>
<145 18%
11%
18%
11%
6%
6%
29%
22%
18%
11%
12%
39%
0% 100%
Mean 5.77 Mean 2.83
Mean 2.99 Mean 5.94
Mean 3.40
Mean 4.57
Mean 3.84
Mean 3.50 Mean 2.21
Mean 3.15
Mean 3.83
Mean 3.65
Leatherhead Food International © 2004 00365 10
When comparing large volume sugar users (more than 901 tonnes per year), with small volume
sugar users (less than 145 tonnes per year), it can be observed that small volume sugar users
were more influenced by the product recipe (See Figure 3A), and technical reasons (See Figure 3D) than large volume sugar users. Large volume sugar users were more influenced by legislation
(See Figure 3E), and the price of sugar (See Figure 3F) than small volume sugar users.
Fifty five percent (55%) of all companies surveyed said they were not looking at sugar reduction in
their product ranges (See Figure 4). The companies that were looking at sugar reduction (45%),
were doing so for reasons of consumer preference, health concerns and the price of sugar.
Question: Why are you looking at reducing sugar levels? (main reason only)
Figure 4: Reasons for looking at sugar reduction
Sweetener usage Summary Sugar was by far the most important sweetener used across all the industry sectors. Other
sweeteners, such as glucose syrup and artificial sweeteners were mainly used by the soft drinks
industry. Based upon the sugar usage levels reported in this survey, the largest volume of sugar
was used by the biscuits and soft drinks industry.
The amount of sugar in products was almost entirely determined by the product recipe. The price
of sugar had some effect on the level of sugar used, with large volume sugar users seemingly
more affected by this than smaller volume sugar users. The large volume users were also more
likely to be looking at sugar reduction. This was being fuelled by consumer demand for low sugar
products, health issues and price.
5 5%
17 %
1 4%
20 %
2%
N ot looking at sugar reduction
H ealth concer ns
P rice of sugar
C onsumer p r eference
A vailab ility o f sugar
Leatherhead Food International © 2004 00365 11
Effect of EU sugar reform
A small majority (54%) of respondents rated their awareness of the EU sugar regime as fair-very
good. The respondents that had a very good knowledge of the EU sugar regime were generally
respondents belonging to large companies and had the specific responsibility of procurement.
Forty six percent (46%) of the respondents rated their knowledge of the EU sugar regime as poor
or very poor.
After being made aware of the EU sugar regime, a large majority of the respondents suspected
that they would be affected by a liberalisation of the EU sugar prices (See Figure 5). Although
most companies readily agreed that they would be affected by a price cut, they were less willing to
disclose the details of the likely impact on their business.
Question: To what extent will this liberalisation affect your product? (4-Point Scale)
Figure 5: Effect of liberalisation of sugar price on products
Overall, companies seemed to disagree with the fact that the total amount of sugar in their product
would increase when the price of sugar falls (83%) (See Figure 6). A large number of companies
(69%) agreed with the statement that their products might become cheaper. The industry seemed
to disagree (69%) with the fact that they will replace existing ingredients with sugar when the price
of sugar drops. The industry seemed to be divided regarding the influence of proposed changes on
their future product development efforts.
If the price of sugar fell, small volume sugar users were more clear in stating that the overall
amount of sugar used would not increase and that their products would become cheaper (See
Figure 6A & 6B). Large volume sugar users were more likely to change future product
development efforts (See Figure 6D).
7 % 2 7 % 3 1 % 3 6 %
0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 %
N o t a t a l l M o d e r a t e l y V e r y m u c h E x t r e m e ly
Leatherhead Food International © 2004 00365 12
Question: If the price of sugar falls…
Figure 6: Effects of fall in sugar prices split according to annual sugar usage
The majority of respondents (63%) did not plan to replace any of the existing ingredients with sugar
(See Figure 7). If ingredients were to be replaced, it would most likely be with other sweeteners
e.g. artificial sweeteners. Nine percent (9%) of the respondents said that they would replace
isoglucose with sugar, if sugar prices fell.
6%
17% 17%
17%
17%
11%
11%
67%
39%
0% 100%
B Our product will become cheaper
83%
39%
11%
28% 28% 6%
6%
0% 100%
A The overall amount of sugar in our product will increase
>901
<145
6%
17% 17%
17%
17%
11%
11%
67%
39%
0% 100%
B Our product will become cheaper
83%
39%
11%
28% 28% 6%
6%
0% 100%
A The overall amount of sugar in our product will increase
>901
<145
44%
28%
28%
22%
11%
11%
6%
28%
11%
11%
0% 100%
D Future product development efforts will be affected
67%
39%
22%
22% 28%
6%
6%
6%
6%
0% 100%
C We will look into replacing ingredients with sugar
>901
<145
44%
28%
28%
22%
11%
11%
6%
28%
11%
11%
0% 100%
D Future product development efforts will be affected
67%
39%
22%
22% 28%
6%
6%
6%
6%
0% 100%
C We will look into replacing ingredients with sugar
>901
<145
Mean 2.03
Mean 1.35
Mean 2.21
Mean 1.65
Mean 2.72
Mean 2.12
Mean 3.41
Mean 4.36
59%
7%
31%
24%
10%
20%
22%
10%
15%
17%
14%
2%
17%
10%
22%
5%
52%
3%
12%
49%
0% 100%
The overall amount of sugar inour products will increase
Our products will becomecheaper
W e will look into replacingother ingredients with sugar
Our future product developmentefforts will be affec ted
Disagree (1) Inclined to disagree (2) Unsure (3)Inclined to agree (4) Agree (5)
Leatherhead Food International © 2004 00365 13
Question: If you were to replace any ingredient with sugar, what ingredient will you try to replace? A All respondents
•
I* includes other natural sweeteners
B Respondents interested in replacing ingredients with sugar
Figure 7: Replacement of other ingredients with sugar
Effect of EU sugar reform Summary Around half of respondents had a fair-good knowledge of the EU sugar regime. After being made
aware of the EU plans for reform to the sugar regime, almost all surveyed said their company
would be affected by any changes to the price of sugar. Specifically they thought their products
would become cheaper should the price of sucrose fall. The majority of respondents disagreed that
their usage of sugar would increase with falls in sugar price. In the eventuality that sugar prices did
come down, about 40% of those surveyed said that they may use sugar to replace other
ingredients in some of their formulations. In these cases, it was most likely to replace another
sweetness source (artificial sweeteners, isoglucose or bulk sweeteners).
6 3%9 %
7 %
1 5%
3 % 3 %
N ot replacing anything
Isoglucose
B ulk sw eeteners
Art ificial sw eeteners
Fat
O ther*
22%
6%
11%
6%
17%
38%
BiscuitsConfectioneryCanned foodsBakery ingredientsCakesSoft drinks
8%
15%
23%
23%
31% <1 0010 0 to 55055 0 to 120012 01 to 180022 500+
22%
6%
11%
6%
17%
38%
BiscuitsConfectioneryCanned foodsBakery ingredientsCakesSoft drinks
8%
15%
23%
23%
31% <1 0010 0 to 55055 0 to 120012 01 to 180022 500+
Industry sector (N=18) Volume of sugar used on yearly basis (tonnes) (N=13)
Leatherhead Food International © 2004 00365 14
Effect of greater availability of isoglucose/HFCS
The following section deals with questions relating to the effect of a possible lifting of the
isoglucose/HFCS quotas
A large percentage (73%) of the respondents rated their knowledge of the EU isoglucose/HFCS
quotas as being poor or very poor. None of the respondents rated their knowledge of the EU
isoglucose/HFCS as being very good.
Respondents’ knowledge concerning isoglucose/HFCS quotas was much lower compared to
respondents’ knowledge concerning the EU sugar regime. This may be due to the fact that the
majority of these respondents did not currently use isoglucose/HFCS in their production (74%).
The majority of companies that did use isoglucose/HFCS in their production were operational in the
soft drinks industry and still rated their knowledge of isoglucose quotas as poor, or very poor
(63%).
Most of the seventeen companies that used isoglucose in their production said that they would be
moderately-extremely affected by changes in the isoglucose quotas (85%). There was a very large
group (69%) of respondents indicating that they would be moderately affected. This might be an
indication that they were not sure how the changes were going to affect their company.
Question: If quotas on isoglucose/HFCS were to be liberalised…
Figure 8: Effect of lifting isoglucose/HFCS quotas on products
46%
8%
17%
8%
33%
25%
23%
46%
8%
25%
23%
23%
25%
25%
23%
8%
33%
0% 100%
The overall amount ofisoglucose/HFCS in ourproduc ts will inc rease
Our produc ts will becomecheaper
W e will look into replac ingother ingredients with
isoglucose/HFCS
Our future product developmentefforts will be affected
Disagree (1) Inclined to disagree (2) Unsure (3)Inclined to agree (4) Agree (5)
Leatherhead Food International © 2004 00365 15
If isoglucose quotas are liberalised, products might become cheaper but most companies were not
sure about this and gave it middle ratings (See Figure 8). This survey suggested that isoglucose
was probably not going to be widely used to replace other ingredients and the overall amount of
isoglucose used was probably not going to increase significantly.
Question: If you were to replace any ingredient by isoglucose/HFCS, what ingredient will you try to replace?
Figure 9: Replacing other ingredients with isoglucose/HFCS
Isoglucose was most likely not going to be used to replace any ingredients but if it was used to
replace other sweeteners it would most likely be sugar and bulk sweeteners (See Figure 9).
Greater availability of Isoglucose/HFCS Summary Roughly a third of the isoglucose/HFCS users said they had a fair-good knowledge of the EU
isoglucose/HFCS quotas. A large majority of those surveyed said their company would be
moderately affected by any changes to the quotas. This might indicate that they are not sure how it
was going to affect their operation.
In the eventuality that isoglucose/HFCS quotas were lifted, about 36% of those surveyed said they
may use isoglucose/HFCS to replace other ingredients in some of their formulations, in these case
it was most likely to replace another sweetness source (sugar or bulk sweeteners).
6 4%
1 8%
1 2%
6 %
N ot replacing anything
Sugar
B ulk sw eeteners
Fat
Leatherhead Food International © 2004 00365 16
Reform scenarios
Respondents were presented with 5 possible outcomes of forthcoming negotiations concerning EU
sugar reform and changes to the isoglucose/HFCS quotas and for each outcome, asked to
estimate likely increases in sugar usage.
Regardless of the various reforms illustrated in the 5 scenarios, around 80% of those surveyed in
industry claimed this would have no effect on the amount of sugar used in their company (See
Figure 10). Not until there was a reduction in sucrose price of 50% and an abolishment of
isoglucose quotas, did there appear to be any trend to indicate an increase in industry sugar
usage. Relaxing of isoglucose quotas was unlikely to effect usage as much as reduction in sugar
costs was likely to affect sugar usage.
Figure 10: Likely increase in sugar usage as a result of changes in the EU sugar regime
When looking at the companies that indicated a likely increase in sugar usage as a result of
changes in the EU sugar regime, a trend was observed, indicating that smaller companies were
more sensitive to price changes in sugar. Although sugar price was more important to large volume
sugar users they were less inclined to respond to small changes in sugar price. Changing
established production methods and recipes required a considerable reduction in sugar price for it
to become profitable for larger companies. Smaller companies were more flexible and therefore
more likely to respond to smaller falls in sugar price.
Based on a sample size of n=17 responses, (too few to make any robust estimates), a trend could
be seen indicating that the abolishment of isoglucose quotas would possibly lead to an increase in
the usage of this ingredient, regardless of price reduction of sucrose (See Figure 11).
2 %
3 %
12%
2%
6%
5 %
5 %
5%
3%
2%
3%
2%
8%
8 %
9%
9 %
8%
88%
86%
82 %
80%
74 %
2 %
0% 100%
1 0 U nc hang ed
1 0 A b ol is h ed
3 0 U nc hang ed
3 0 A b ol is h ed
5 0 A b ol is h ed
>1 0 % 5 to 1 0 % 2 to 5% 0 to 2 % Unchange d /le ss s ug a r use d
Fall in sugar price
Isoglucose quotas
Leatherhead Food International © 2004 00365 17
Figure 11: Likely increase in isoglucose usage as a result of changes in the EU sugar regime
6%
6%
6% 6 %
6 %
0%
6%
18 %
6%
1 2%
6%
9 4%
77 %
9 4%
77 %
82 %
0%
0% 100%
1 0 U nc hang ed
1 0 A b ol is h ed
3 0 U nc hang ed
3 0 A b ol is h ed
5 0 A b ol is h ed
>1 0 % 5 to 1 0 % 2 to 5% 0 to 2 % Unchange d /le ss s ug a r use d
Fall in sugar price
Isoglucose quotas
Leatherhead Food International © 2004 00365 18
Additional Information
A number of companies (N=4) wished to remain anonymous in their reply to this questionnaire.
The UKISUG volunteered to collate and blind the responses of these companies. The replies of
these four companies had already been summarized by the UKISUG and were therefore
impossible to incorporate in the main analysis. The summary provided by the UKISUG is presented
below.
The four companies that replied were either the category leader or number two in their field, with
each employing over a 1,000 employees. Between them, they used more than 300,000 tonnes of
sugar each year and 40,000 tonnes of isoglucose. The product areas concerned included almost
the entire range of products containing sugar. The UKISUG stated that their reply may be taken as
an authoritative representation of the ‘sugar-using’ industry.
All of the companies considered sugar to be one of their main ingredients, and amount used was
largely determined by consumer taste. All were looking at reducing the amount of sugar used for
reasons of health, consumer preference and its high price. If the price of sugar were to fall, then
the use of sugar might increase a little, but this would be in place of isoglucose or glucose syrup.
The overall calorie content of products was likely to remain unchanged.
The UKISUG further reports that these findings correspond with observations in the market place.
Their summary states that over the last 20 years, the real cost of food and drinks containing sugar
has fallen, and it has fallen even faster as a share of disposable income. Furthermore, during those
20 years, per capita confectionery consumption has risen only slightly and per capita consumption
of soft drinks containing sugar has actually been constant or even reduced.
Based on these observations, the UKISUG concludes that the limiting factor on consumption of
food and drink containing sugar is not cost but consumer taste. The UKISUG concludes that there
is no evidence that a fall in sugar price arising from reform of the EU sugar regime would lead to in
increase in its consumption.
Leatherhead Food International © 2004 00365 19
Final Conclusions
Sugar is regarded as an essential ingredient to the manufacture of food. Current sugar levels are
primarily determined by product recipe. The product recipe is to a very large extent based on
consumer preference.
When consumer preference is satisfied, secondary factors are more relevant in determining sugar
levels used. The most important secondary considerations are technical reasons and the price of
sugar. Respondents were divided over these two secondary factors. Small volume sugar users
regarded technical reasons as being more important, where as large volume sugar users regarded
price as being more important.
Respondents confirmed that the EU sugar reform will have a considerable impact on the industry.
However, due to the complex nature of the issue, it was difficult for respondents to predict the
exact nature of their response to the changes. Any adverse effects were likely to come as a result
of sugar containing products becoming cheaper. Around 70% of respondents said that the price of
products would fall should sugar become cheaper. In terms of sugar usage, however, only 17% of
the respondents thought that the amount of sugar in their products would increase, if the price fell.
Small volume sugar users were agreed upon the fact that their products will become cheaper and
that they will not increase in sugar content as a result of the reform. Large volume sugar users also
expressed the opinion that their product might become cheaper and they will not increase sugar
content, but they were less explicit. They were also more inclined to agree that future product
development efforts would be affected. Smaller companies were more likely to respond to small
falls in sugar prices; large companies were likely to respond to significant falls in sugar prices only.
The affect of liberalisation of isoglucose/HFCS quotas is expected to be smaller than the EU sugar
reform. The changing quotas of isoglucose/HFCS were unlikely to have a major impact on
sweeteners used. It appeared more likely that sugar might replace isoglucose/HFCS, rather than
the other way around.
Leatherhead Food International © 2004 00365 20
About Leatherhead Food International
Leatherhead Food International is a global and independent provider of food information, market
intelligence and technical and food research services. We deliver consultancy services varying
from large scale Government research, through individually tailored client information projects, to
nutritional, sensory and consumer studies. We have over 1,000 members internationally, who we
support daily with the whole range of our food expertise, and with our regular training.
Please feel free to browse our website for more information www.leatherheadfood.com
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