The global organic sugar market is highly competitive, with key industry players adopting various strategies such as product launches, partnerships, and expansions to strengthen their market positions. Most companies in the market are focused on expanding operations across the globe, augmenting their capabilities, and building strong partner relationships.
The growth of market players is dependent on market conditions, government support, and industry development. Thus, vendors should focus on expanding geographically and improving product quality. Tereos SA, Südzucker AG, Pronatec AG, Jalles Machado S/A, Cosan Ltd., Nordzucker AG, LOC Industries, Inc., Bunge Limited, La Felsina, Lexem India Pvt. Ltd. & Azucarera La Felsina S.a. are the major companies in this market, who compete based on market presence, quality, and price.
Key players are taking steps toward business expansions and entering into untapped markets, thereby increasing their customer bases. The regional and global players may strengthen their presence globally through acquisitions during the review period. It has also been forecast that improvements in the global economic scenario and the growing organic sugar industry in emerging nations would fuel market growth, thereby making it an ideal time for players to launch new products and increase their global market shares.
Threat of New Entrants
The global organic sugar market is highly lucrative due to the widening application scope in various industries. Rising consumer inclination toward organic products over conventional counterparts is expected to fuel the demand for organic sugar globally. Organic sugar is processed from organically grown sugarcane and beet sugar, which is considered safe to consume due to the avoidance of synthetic additives and GMOs during plantation. However, the initial investments and working capital required to efficiently operate an organic sugar facility are moderate since it involves the option of manual extraction and processing, along with the use of machinery. Furthermore, small-scale organic farming in developed countries has led sugar processors to import organic sugar crops from other countries, such as Brazil, Paraguay, Argentina, Colombia, India, and Thailand, thereby increasing transportation costs and the purchase value of sugar crops.
Hence, the threat of new entrants in the global organic sugar market is expected to be moderate.
Bargaining Power of Suppliers
The production of organic sugar is spread across the globe with Germany, the UK, and the US as the major consumers. However, organic farming is considerably high in Asia-Pacific as compared to Europe, thereby increasing the imports of organic sugar crops in Europe and dependency on other markets for raw materials. This has led to a wide gap between demand and supply. Furthermore, suppliers of organic crops and plants offer their products to different end-use industries such as personal care and food processing, which increases their bargaining power.
Hence, the bargaining power of suppliers in the global organic sugar market is expected to be high.
Bargaining Power of Buyers
The buyers in the organic sugar market are vast and include end-use industries such as food and beverages and personal care. The demand for organic sugar is increasing due to the rising concerns of consumers regarding the impact of agricultural activities on the environment. This trend has benefited the market for products with organic certifications, which, in turn, has led to an increasing number of manufacturers offering organic products. The reduction of prices of organic sugar due to intense competition and the presence of a large number of market players operating further lowers the switching costs for buyers.
Hence, the bargaining power of buyers in the global organic sugar market is expected to be moderate.
Threat of Substitutes
The threat of substitutes in this market is high due to the availability of an immediate alternative in the form of conventional sugar. Though the popularity of organic sugar is high owing to consumer preference, the benefits of low cost and easy availability of conventional sugar make it an immediate substitute. Additionally, the cost of organic sugar is approximately 18%–20% higher than conventional sugar. Furthermore, the lack of awareness of organic products in developing and underdeveloped countries is encouraging the consumption of conventional sugar over organic counterparts.
Hence, the threat of substitutes in the global organic sugar market is expected to be high.
Intensity of Rivalry
The global organic sugar market is marked by a high intensity of rivalry. The established players in the market are targeting competitors in terms of quality and price, thus making the industry competitive and reducing profit potential for the existing firms. The key players invest in R&D to bring about innovation in their product lines and make product development a priority to meet changing consumer preferences.
Hence, the intensity of rivalry in the global organic sugar market is expected to be high.
