Sugar reduction in sweets & snacks
- Big brands are cutting sugar in popular products
- Start-ups are launching low- and no-sugar treats
- Drivers of sugar reduction include health, regulation, and rising costs
- Reformulation aligns with evolving market demand
Sweets and snacks manufacturers across the industry are hard at work to cut sugar levels in their products.
But while all of this is taking place, the question of why sugar is being increasingly slashed from products, and whether this is something consumers actually want, remains.
Industry cutting sugar at speed
Mars, Incorporated has launched a low-sugar Mars bar, Mondelēz International released a reduced-sugar Cadbury Dairy Milk, and The Hershey’s Company unveiled an entire range of zero-sugar alternatives to its fan favourites.
Meanwhile, Nestlé has introduced new cross-category sugar reduction technology. Using an enzymatic process, the new tech reduces intrinsic sugar in ingredients like malt, milk, and fruit juices by up to 30%. The sugar-reduced ingredients are then used in recipes for various products.
“Sugar reduction across our portfolio remains a priority,” says Stefan Palzer, chief technology officer for Nestlé. “This new technology is a true breakthrough, as we can reduce sugar without adding sweeteners, while preserving a great taste, all at a minimal cost increase.”
And while giants of the industry are reformulating to reduce or eliminate sugar, start-ups have entered the space, focusing on reduced sugar or sugar-free from the start.
Newcomer NeatSweets’ tagline is ‘sugar’s out candy’s in’. Savvy Sweets has no added sugar and a whole range of functional benefits, saying they’re ‘naturally better sweets that love you back’. And over in the chocolate aisle, Fatso is emphasising the importance of natural, high-quality ingredients, resulting in a product that just happens to have a low-sugar content.
What’s behind the low-sugar trend?
There’s a wide range of reasons behind the drive to cut sugar across the food and beverage industry, but particularly in sweets and snacks.
- Regulatory: With obesity and diabetes rates on the rise globally, governments are now regulating to elevate healthier food and beverage products. The World Health Organization (WHO), in particular, is increasingly targeting sugar reduction
- Commodity costs: Climate change has placed essential commodities, including sugar, under threat. This has led to a huge spike in prices. Reducing sugar, by default, helps to lower ingredients costs, while also avoiding sugar taxes
- Ingredient innovation: Ingredient companies like Tate & Lyle are focusing their efforts beyond traditional sugar refining. Their portfolio includes sweeteners like allulose and fibre additives from seaweed and corn, reflecting a shift towards more health-focused ingredients
- Technological advances: As mentioned above, companies like Nestlé, are using innovative techniques to reduce intrinsic sugar in their ingredients, enabling reformulations without needing volume-compensating sweeteners
- Consumer segmentation: Brands are increasingly diversifying, to appeal to a wider audience and futureproof themselves. Multinational powerhouse Cargill is currently investing heavily in stevia-based product innovation, while Coca-Cola plans to offer multiple sweetening options, including cane sugar versions, reflecting evolving consumer tastes
“Overall, reformulation allows manufacturers to address health trends, environmental considerations, regulatory pressures, and consumer desires for both taste and better ingredients,” says Nandini Roy Choudhury, principal consultant on food and beverage at Future Market Insights.
But what do consumers want?
Do consumers want less sugar in their treats?
Governments and manufacturers are making big changes to food and beverage products, with a strong focus on reducing sugar. But has anyone asked consumers if they want their favourite treats reformulated into something new. And, if yes, what did they say?
Well, the good news for manufacturers already on the sugar-reduction journey, is that the answer is in most cases yes.
“The shift towards reformulating sweet treats to reduce sugar is firmly rooted in consumer demand,” says Future Market Insights’ Choudhury.
And the data supports this view, with research from Euromonitor showing a clear shift in consumer food and dieting priorities.
“Consumers who would previously have focused on fat content or diet are now increasingly looking into sugar reduction,” says Maria Mascaraque, senior global insight manager for food and dairy at Euromonitor.
“Eat less sugar” was cited by 53% of respondents to Euromonitor’s Voice of the Consumer: Health and Nutrition Survey. Furthermore, when asked about reasons to avoid sugar, 58% said it’s “better for me to avoid it”, followed by 57% saying it “makes me feel healthier”.
Similarly, the International Food Information Council in the United States found that three‑quarters of US consumers are actively trying to limit or avoid sugar. And sales reflect this, with stevia-based product retail sales growing at a CAGR of 18%, and nearly 10,000 new products introduced in 2024 alone.
“The nutrition industry, including major ingredient suppliers like Ingredion, reports rising global demand for reduced- or sugar-free products as consumers increasingly seek healthier options,” adds Future Market Insights’ Choudhury.
However, preferences within the category vary.
Research by Future Market Insights revealed that although low- and no-calorie sweeteners are on the rise, consumers still often prefer caloric sweeteners, with honey found to be a favourite among sugar substitutes.
“Consumers are torn,” says Choudhury. “Many want to reduce sugar intake, yet still expect indulgent sweetness in their treats.”
Moreover, 44% of consumers say they seek ‘natural’ sweeteners, compared to only 21% preferring those labelled artificial.
Why consumers prefer natural sweeteners
- Health consciousness: Many aim to cut sugar for weight, diabetes, or general wellness concerns
- Clean-label appeal: Natural-sounding alternatives like stevia, monk fruit, or newer options like allulose are gaining traction
- Industry innovation: Manufacturers are responding to the rising consumer demand for reduced-sugar products, so the choice and opportunity to purchase new and exciting options is growing
“Consumer interest in sweeteners, especially those deemed natural or clean-label, is strong, propelled by health trends and product innovation, though not yet universally replacing caloric sweeteners,” concludes Choudhury.
The future of sweet treats
The sweet spot between indulgence and health is shifting, and fast.
As brands reformulate and innovate to meet regulatory demands and rising costs, consumer preferences are proving pivotal. While not all shoppers are ready to give up sugar entirely, the appetite for cleaner, healthier treats is growing.
For manufacturers, the challenge is clear – deliver products that satisfy both the sweet tooth and the demand for wellness. Those who strike the right balance will be best positioned to lead the next chapter in confectionery and snack innovation.
