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The European market potential for coconut sugar

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There is an increasing demand for coconut sugar on the European food market. The nutritional benefits that coconut sugar offers are stimulating demand. Since it is considered a healthier alternative to sugar, European food and beverage companies are using it in their product formulations.

1. Product Description

Coconut sugar is a sweetener cultivated from the sap of the flower bud stem of the coconut palm. The Philippines, Indonesia, and Thailand are major producers and have accounted for about 80 percent of the global production over the past few decades. This is because they have favourable cultivation conditions.

Coconut sugar cultivation begins with ‘tapping’ the flower bud stem of a coconut tree, with farmers making a cut on its spadix. The sap inside then flows into containers placed below to collect it. The collected sap is then transferred into large woks which are placed over moderate heat to evaporate excess water, thickening it into a thick syrup. It is now coconut sugar.

100g of coconut sugar consists of 100g of carbohydrates, 75g of which are sugars. In terms of trace elements, 100g contains 625 milligrams (mg) of potassium and 125 mg of sodium. Research from the Philippines government's Food and Nutrition Research Institute found that compared to granulated sugar and high-fructose corn syrup, coconut sugar has higher levels of iron, zinc, and calcium.

Coconut sugar is typically used as a sweetener in the food industry. It is mostly used in confectionery and bakery products, as well as beverages. Unlike other sweeteners, coconut sugar is not calorie-free. However, because coconut sugar contains fewer calories than traditional sugar, it has many applications in the food industry. Coconut sugar is used in the cosmetics industry as well, usually in skin and hair care products. However, this study focuses on coconut sugar used as a food additive.

Coconut sugar is traded under HS Code HS Code 1702900000, which refers to other sugars, including invert sugar and other sugar, as well as sugar syrup blends containing 50 percent by weight of fructose in their dry state. This report examines the application of coconut sugar in the European food and beverage industry.

2. What makes Europe an interesting market for coconut sugar?

The demand for coconut sugar in the European food market is growing. Increasing consumer demand for natural and high-quality food products in Europe creates an opportunity for coconut sugar suppliers in developing countries. Coconut sugar has unique properties and its increasing availability makes it a favourable choice for food manufacturers in Europe.

Figure 1: Imports of sugars with an HS Code 17029095 to Europe, 2014-2018
Imports of sugars with an HS Code

Source: Eurostat

Figure 1 shows imports of sugars with an HS code 17029095 under which coconut sugar is sometimes traded. It is shown that the level of exports from outside of the EU is growing in both volume and value. This shows there is increasing demand for alternative sweeteners such as coconut sugar in the European market. The majority of imports in this category comes from Intra-EU trade. 

In 2017, the European food and drink sector generated EUR 1,192 billion in revenue. It is the largest manufacturing sector in the EU. There are about 294,000 companies present in the sector. European households spent on average about 13.8 percent of their total expenditure on food and drink products.

European consumers are seeking healthier and natural products. Natural sweeteners are increasingly used in place of sugar in food and beverage products. According to a 2016 survey of 2,500 European consumers, about 60 percent of adults monitor how much sugar they consume.

Organic coconut sugar is also gaining popularity in the European market. The European organic food and drink is the second largest in the world. The market has grown from EUR 20.9 billion in 2012 to EUR 34.3 billion in 2017.

Consumer demand for organic coconut sugar is driven by the growing interest in a healthy lifestyle. This trend is expected to continue in the future. New product development and innovation are generating demand for organic coconut sugar.

It is estimated that the European sweeteners market was worth USD 11.5 billion in 2017. The market is forecast to grow by a compound annual growth rate of 1.7 percent to reach USD 13 billion in 2023. The market is growing in value partly because of growing demand for natural sweeteners.

European consumption of sugar is expected to decrease over the forecast period. Figure 1 illustrates estimated sugar consumption in the EU 28 until 2027. This trend is also supported by legislation, because some countries, such as the UK and Ireland, have introduced a “Sugar Tax”. According to the Safefood survey in the Republic of Ireland, the average sugar content per serving of energy drinks has fallen by approximately two level teaspoons of sugar; a drop of 31g in 2015 to 23g in 2019 since the announcement of the sugar tax.

Coconut sugar is gaining popularity in the European market. According to Technavio, the global coconut sugar market is set to grow by USD 253 million between 2019 and 2023. According to industry sources, the coconut sugar market in Europe is around 2,000 tonnes which accounts for about 0.01 percent of total sugar consumption in Europe. At the same time, the organic coconut sugar market is expected to grow at a compound annual growth rate of 5.9% between 2019 and 2024 to reach USD 397 million by 2024. Coconut sugar is considered a healthier alternative to traditional sugar because of its nutritional properties. Coconut sugar contains Vitamin C, iron, zinc, potassium and phosphorus and phytonutrients. The main driver is growing consumer demand for healthier and natural products.

Coconut sugar is also considered a vegan alternative to cane sugar. Regular sugar is sometimes processed with the bone char from animals in order to produce its white color. Coconut sugar is an unprocessed and vegan alternative to regular sugar. On its website, the animal rights organisation People for the Ethical Treatment of Animals (PETA) urges consumers to switch to coconut sugar as a vegan alternative to regular sugar.

With a growing vegan population in Europe, the demand for coconut sugar is expected to continue growing. It is estimated that there are about 75 million vegans and vegetarians in Europe. Figure 2 shows the UK and Germany have the highest share of vegan product launches in Europe in 2018.

Demand for coconut sugar is expected to continue growing in the future. Growth is driven by rising consumer demand for healthier and natural products. The growing popularity of the vegan lifestyle is also stimulating demand. Major restraints to growth include low awareness of coconut sugar and competing sweetener alternatives. The cost of coconut sugar is higher than sugar cane, agave and beet sugar. The production process of coconut sugar is also labour intensive and time-consuming.

Suppliers of coconut sugar in developing countries should target the European market. Europe has a robust food and drink industry. European consumers are increasingly looking for healthier alternatives to regular sugar. They are seeking more natural and environmentally-friendly products. The rising incidence of obesity is making governments introduce measures to curtail the use of sugar in food and drink products. This trend is expected to continue over the forecast period.

Tips:

3. Which European countries offer most opportunities for coconut sugar?

The European countries that offer the best prospect for coconut sugar are Germany, France, the Netherlands, The UK, Italy and Spain. These countries have the most advanced food manufacturing sectors. They also have the largest consumer markets in terms of food & drink products.

Table 1 Leading country markets for coconut sugar in Europe

Country

Food and Drink Market

bnEUR

% Growth

Organic Food and Drink Market

bnEUR

% Growth

Germany

203.9

+19

10

+5.9

France

228.1

+26.8

7.9

+17.6

The Netherlands

76.7

+4.2

1.2

+2.9

The UK

118.7

+3.8

2.3

+5.3

Italy

138.6

+4.1

3.1

+18.6

Spain

118.8

+16.4

1.9

+12.9

Source: Various

Germany

Table 2 Imports of sugars with an HS Code 17029095 to Germany, 2014-2018

2018

000 Tonnes

% Change Volume (2014-2018)

m EUR

% Change Value (2014-2018)

Exporters

Important Market Players

 HSC: 17029095

60.1

7%

37.6

25%

Netherlands (29.9%), France (28.4%), Belgium (26%)

Delphi Organic, Good Mood, Rapunzel Naturkost 

Source: Eurostat

The country has the second largest food and drink sector in Europe. Important sectors include meat and meat processing, dairy, confectionery, baked goods and alcoholic beverages. The food sector is one of the most important in the country. Germany is the third largest exporter of food products in the world.

The German organic food market is the largest in Europe. German consumers have a high awareness and willingness to pay for high-quality products. In Germany, organic foods are widely accessible to consumers with around 60 percent sold via mainstream retailers. 

According to Mintel, 36 percent of Germans cite naturalness as an important factor when buying sugar and sweeteners. Coconut sugar is becoming more popular in the German market because of its high nutrient content and lower glycaemic index compared to regular sugar.

Leading importers of coconut sugar include Delphi Organic. Davert, one of the largest organic food suppliers in Europe carries coconut sugar. Rapunzel also has many products that contain coconut sugar, including Rapunzel Bio Schokolade. The organic food supermarket Alnatura sells coconut sugar under its private labels.

Since demand for coconut sugars is expected to continue growing, exporters of coconut sugar in developing countries should target German buyers. Suppliers of coconut sugar should consider certification, as there is a growing demand for organic sweeteners in Germany. Organic certification is also seen as a sign of quality. German consumers are also environmentally aware and are more likely to purchase products that contain coconut sugar.

France

Table 3 Imports of sugars with an HS Code 17029095 to France, 2014-2018

2018

000 Tonnes

% Change Volume (2014-2018)

m EUR

% Change Value (2014-2018)

Exporters

Important Market Players

 HSC: 17029095

43.2

-12%

41.5

0.1%

Belgium (48.8%), Netherlands (19.3%), Germany (10.9%) 

Keramis Biorgania 

Source: Eurostat

France has the biggest food and drink market in terms of turnover. The country is the sixth largest food exporter in the world. The most important sectors are meats, dairy products, beverages and confectionary.

The French organic food market is the second largest in Europe. Demand for organic food in France is expected to continue. Organic food and drink manufacturers tend to use sugar alternatives such as coconut sugar because it is a healthier alternative to regular sugar and it offers better nutritional content.

French importers of coconut sugar include Keramis and Biorgania. Organic coconut sugar is also becoming popular. Companies like Daddy offer organic coconut sugar at mainstream retailers, such as Carrefour. Comptoirs et Compagnies is one company that offers coconut sugar in its product portfolio.

It is expected that demand for coconut sugar on the French market will continue to rise in the near future. Rising consumer demand for high quality natural products is expected to generate demand for coconut sugar in France. Suppliers of coconut sugar should consider organic certification when targeting the French market.

The Netherlands

Table 4 Imports of sugars with an HS Code 17029095 to the Netherlands, 2014-2018

2018

000 Tonnes

% Change Volume (2014-2018)

m EUR

% Change Value (2014-2018)

Exporters

Important Market Players

 HSC: 17029095

34.5

84%

32.2

52%

Germany (28.1%), France (27.1%), Belgium (21.3%) 

Tradin Organic, Z-Company

Source: Eurostat

The Netherlands offers an opportunity for coconut sugar exporters in developing countries as it is an entry point for ingredients into Europe. Dutch traders that import coconut sugar include Z-Company and Tradin Organic. Tradin Organic is one of the largest traders of organic ingredients in the world. Other companies, such as NutriBoost sell coconut sugar in bulk.

Exporters of coconut sugar in developing countries should consider the Netherlands. Suppliers should be prepared to supply larger volumes when dealing with Dutch traders.  Demand for coconut sugar in the Netherlands is expected to continue rising, as it is a major entry point for ingredients into Europe.

The UK

Table 5 Imports of sugars with an HS Code 17029095 to the UK, 2014-2018

2018

000 Tonnes

% Change Volume (2014-2018)

m EUR

% Change Value (2014-2018)

Exporters

Important Market Players

 HSC: 17029095

9.0

-34%

15.9

46%

 Belgium (51.7%), Netherlands (20.5%), France (9.1%)

 The Coconut Company, Coconutty, Raw Chocolate Co, Om Bar

Source: Eurostat

The UK food and beverage sector is one of the leading industries in Europe. The market for organic food and drink is also growing in the UK; the UK’s organic food market is the sixth largest in Europe. Rising consumer awareness for natural and healthier food and drink products is stimulating demand.

In order to combat childhood obesity, the UK government introduced its so called “Sugar Tax” on soft drinks in 2018. Around 50 percent of soft drinks manufacturers reduced their sugar content before its implementation. The sugar tax is stimulating demand for alternative sweeteners, such as coconut sugar.

UK companies that offer coconut sugar are The Coconut Company and Coconutty. Other companies, such as the Om Bar and the Raw Chocolate Co make chocolate with coconut sugar instead of regular sugar.

It is expected that the UK will remain an important market for coconut sugar in the foreseeable future. However, Brexit may disrupt international supply chains. Especially in the case of a no-deal scenario, it may take some time to re-negotiate trade deals with developing countries.

Italy

Table 6 Imports of sugars with an HS Code 17029095 to Italy, 2014-2018

2018

000 Tonnes

% Change Volume (2014-2018)

m EUR

% Change Value (2014-2018)

Exporters

Important Market Players

 HSC: 17029095

15.9

517%

22.8

466%

 Spain (58.6%), Germany (22.1%), Belgium (9.2%)

 Moralco, Cacapuro, Optima Naturals, Mascao

Source: Eurostat

Italy has one of the largest consumer markets in Europe. The Italian food processing sector is dependent on imports of food ingredients. The most important food sectors are bakery products, dairy products, processed meats, and seafood.

The Italian organic food market is the third largest in Europe. The main driver is increasing consumer demand for high-quality, premium products.

Italian traders of coconut sugar include Moralco and Cacapuro. Optima Naturals is marketing an aloe vera drink with coconut sugar under its Provida brand. The Italian chocolate brand Mascao has products with coconut sugar. Eridinia is another market player.

The Italian market offers good prospects for coconut sugar exporters in developing countries. Furthermore, organic certified coconut sugar also has potential on the Italian market.

Spain

Table 7 Imports of sugars with an HS Code 17029095 to Spain, 2014-2018

2018

000 Tonnes

% Change Volume (2014-2018)

m EUR

% Change Value (2014-2018)

Exporters

Important Market Players

 HSC: 17029095

3.9

-21%

8.0

-15%

Belgium (31.8%), Netherlands (24.8%), France (23.2%) 

 Mercio stevia, Myconatur

Source: Eurostat

Spain has the fifth largest food and drink market in Europe. The organic food and drink market is also increasing and the potential for further growth is high.

Importers with coconut sugar include Mercio stevia and Myconatur. Brands such as Naturgreen, El Granero Integral and Energy Feelings have products using coconut sugar as a sweetener.

The Spanish market offers good prospects for coconut sugar exporters in developing countries. The demand for high quality and organic products is expected to increase further in the coming years. Suppliers of coconut sugar should target Spanish buyers, especially those that focus on organic and natural products.

Tips:

  • Target buyers in Western European countries when exporting coconut sugar. Consumer awareness in these countries is the highest.
  • Look at getting organic certification for your coconut sugar. Organic coconut sugar is becoming popular with organic food companies looking to replace sugar in their products. Germany, France, Italy, and the UK have the largest organic food markets in Europe.
  • Consider marketing coconut sugar on vegan attributes. The vegan lifestyle is also becoming popular in Western European countries. The UK and Germany have the highest share of vegan product launches in Europe.

Exporters of coconut sugar can capitalise on key trends on the food market in Europe, such as growing demand for organic and vegan products. These trends generate demand for coconut sugar in the European market.

Growing consumer awareness towards health is changing food habits

There is increasing demand for organic food and drink products in the European market. The main driver is consumers wishing to avoid products with synthetic pesticides and related chemicals. Many organic food and drink companies are increasingly using natural sweeteners to replace sugar; coconut sugar is used because of its nutritional properties and ecological credentials.

Organic certification is also seen as a quality standard, and increases the credibility of coconut sugar in the European market. Exporters of coconut sugar from developing countries should tap into this trend and consider certification. Since coconut sugar is more expensive than regular sugar and other alternatives, exporters should target the organic sector where the premium can be justified. It is expected that the demand for organic products in Europe will continue to increase in the near future.

Tips:

  • Consider supplying organic ingredients. Look at organic farming criteria and organic certification requirements. For more information on scientific and technical research on organic farming visit Fibl.
  • Visit IFOAM for more information on the organic food and drink market.
  • Do research on what additives are allowed by organic standards. For example, look at the EU organic regulations. By using this information, you can target buyers who deal with organic food and beverage manufacturers.

Growing demand for vegan products in Europe

There is a growing demand for vegan food and drink products across Europe. A report from Allied Market Research valued the global vegan industry at USD 14.2 billion in 2018; it is estimated to reach USD 31.4 billion by 2026. The Allied Market Research reported that Europe accounted for more than one-third of the global vegan product market, with Europe predicted to dominate in the coming years.

One factor driving demand for vegan food and drink product in Europe is growing consumer awareness of health benefits associated with a vegan diet. Health benefits include potential protection against certain cancers, as well as reduced blood sugar and cholesterol levels. A second factor driving demand for vegan food and drinks products is growing consumer awareness about the high environmental impact of meat and dairy products. Ethical issues concerning animal welfare and slaughter are also encouraging some consumers to become vegan and avoid animal-based products.

In recent years, there have been many new launches of organic vegan food and drink products. This trend is set to continue as companies develop new vegan products. Moreover, Europe leads the way in terms of organic food innovations, with almost 20 percent of all food and drink products launched in Europe having an organic claim.

The number of applications for coconut sugar in the food and drinks industry is also growing. As coconut sugar is considered as a vegan alternative to regular sugar, the demand for coconut sugar is expected to increase further. This is because, unlike traditional sugars, coconut sugar is processed without animal bone char, making it popular with vegans. The Vegan brand Veganz has coconut sugar in its product range.

Suppliers of coconut sugar in developing countries should target the European market. The vegan trend highlights an opportunity for coconut sugar products in the European market as it can be marketed as a sweetener for vegans.

Tips:

  • Stay up to date with vegan trends on websites and associations such as the Vegan Society and the Vegetarian Society.
  • Educate yourself on how sugar production involves bone chars. This will help you market coconut sugar on vegan attributes.
  • See CBI Trends report on what trends offer opportunities on the European market in the food sector. You can find more information on what trends are present in the European food market and how to take advantage of them.

Increasing prevalence of obesity and diabetes in Europe

According to the World Health Organisation, there are increasing rates of diabetes among all age groups in Europe. It is estimated that the rate of obesity has tripled since the 1980’s, reaching about 60 million people. This accounts for around 10.3 percent of men and 9.6 percent of women aged 25 years and over. The increase has been attributed to rising incidence of obesity due to unhealthy diets and sedentary lifestyles. Healthy diets and exercise are two ways to prevent type 2 diabetes.

Coconut sugar has a glycemic index (GI) approximately half that of regular table sugar (GI 35). This makes coconut sugar a better sweetener for people with diabetes; its disaccharide and sucrose breaks down into the monosaccharides glucose and fructose at a slower rate. The increasing incidence of diabetes is expected to raise demand for coconut sugar in the coming years. Foods with high glycemic index cause blood sugar levels to spike suddenly, which has an effect on insulin levels. Coconut sugar also contains a fibre that is known to slow down the glucose absorption.

However, some leading diabetes organisations such as Diabetes UK are of the view that although coconut sugar is marketed as a healthier alternative to sugar it is still a form of sugar that presents risks to consumer health. Thus, groups such as Diabetes UK suggest consumers reduce all forms of sugar consumption, and provide advice on how to cut down on sugar. Consumers reducing their levels of sugar consumption would have a negative impact on coconut sugar demand.

It is forecast that increasing obesity and diabetes levels will generate demand for coconut sugar as a healthier alternative to refined sugar. This trend is expected to increase in the future.

Tip:

  • Make sure you communicate health benefits of coconut sugar when approaching European buyers. You can look up scientific data that proves the lower glycemic index of coconut sugar.

This study has been carried out on behalf of CBI by Ecovia Intelligence.

Please review our market information disclaimer.

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