All U.S. sugar deliveries for human use rose 2.6 percent in 2016/17, showing brisker gains than the 1.6 percent and 1.3 percent year-on-year (YOY) growth seen in 2015/16 and 2016/17, respectively. Most major industry categories used more sugar in 2016/17. There were a few exceptions: confectionery (down 0.9 percent), beverage (down 0.5 percent), retail (down 2.3 percent), and canned, bottled, and frozen food manufacturing (down 3.3 percent).

Major categories that showed significant growth included bakery and cereal, ice cream and dairy, and wholesalers. Two categories in particular showed remarkable YOY growth: use by hotels, restaurants and institutions was up 8 percent, while use in the multiple/other category was up 9.3 percent. At first glance, one might wonder if consumers are cutting their sugar intake in some high profile or more obvious areas only. The explanation is, of course, far more complicated, particularly as consumer preferences have shifted rapidly in the last five years.

Beet and cane sugar deliveries upended their recent trends. Cane deliveries, which had shown respectable growth in the last five years, fell by 6.1 percent in 2016/17. Beet deliveries had declined by 2.0 percent in each of the last two years and had seen anemic growth the year before that, but a price advantage and savvy moves by the beet industry allowed it to grow by a phenomenal 15.7 percent in 2016/17.

Organic may be the trend du jour, but industries and formulations do not shift so quickly. The earlier trend towards low-calorie sweeteners surprised many by proving short-lived, and companies may now be wary of spendy moves that yield disappointing sales gains. The lesson, then, is that while the customer may always be right, sometimes the price isn’t.

Annual growth in sugar deliveries

Posted by: Information Services
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