Organic Sugar Market

The global organic sugar market has witnessed significant growth over the last few years and is projected to register a CAGR of 16.10% during the forecast period. The prime drivers for the growth of the organic sugar market include rising demand for organic products and government initiatives for the promotion of organic products. However, the high price of organic sugar along with stringent regulations for organic products are set to curb the growth of the organic sugar industry globally. Nevertheless, the increasing adoption of organic farming practices in emerging economies and growing demand for organic brown sugar promises the creation of lucrative opportunities in the global organic sugar market

The organic segment of the food industry is growing at a phenomenal rate across the globe. Consumers around the world are becoming more aware of the adverse impact of chemicals on health. This increasing awareness has made them health conscious, because of which they prefer products with minimal or no chemicals. Rising health consciousness and consumer inclination toward healthy and nutritional food products are driving the demand for organic food. Consumers are also concerned about the impact of chemicals on the environment and health, leading to a shift to organically cultivated and processed products. Consumers are willing to pay a premium for healthy food products, propelling the adoption of organic sugar in the food industry. As per the FiBL, the Research Institute of Organic Agriculture, organic food sales in Europe were worth EUR 30.7 billion (USD 34.2 billion) in 2016, which reflected a market growth of 11.4% from 2015. Also, according to the MRFR analysis, the global organic food and beverages market in 2018 surpassed USD 100 billion, which reflected a growth of 6% from 2017. This shift in consumption patterns has influenced food manufacturers to adopt natural and organic ingredients. There has been a significant increase in the number of organic food processors. According to FiBL, the number of organic food processors increased from 66,000 in 2016 to 68,164 in 2017. Moreover, the vast global confectionery market drives the growth of the organic sugar market, as sugar is a key ingredient in confectionery products.

The increasing demand for organic products has led small-scale farmers in emerging economies to adopt organic farming practices. Growth is particularly high in emerging economies such as Asia-Pacific, the Middle East, and Africa owing to rising awareness among farmers about the hazards of chemical fertilizers. Significant investments are being made in organic production in these countries to shift away from conventional farming practices. Government support for the promotion of organic farming also plays a significant role. According to FiBL, in Asia-Pacific, the largest in-conversion areas in 2017 were in Australia, India, and China. Also, these countries have passed laws for organic claims in 2018 which will create significant opportunities for the suppliers of organic sugar in these countries. Thus, a shift to organic farming practices in emerging economies offers lucrative growth opportunities to market players.

The organic label applies to food or other agricultural products that have been produced using approved methods. The European Union (EU) and the US Department of Agriculture (USDA) sets out a number of rules and regulations governing the production, distribution, and marketing of organic products in the region. The regulations for organic production and labeling of organic products ensure that the same high-quality standards are respected all over Europe and the US. In Europe, Each EU member appoints control bodies or authorities to inspect operators in the organics food chain. In the US, food products that are normally under FDA's authority and labeled with organic claims must comply with both USDA National Organic Program (NOP) regulations for the organic claim and FDA regulations for food labeling and safety. Producers, distributors, and marketers of organic products must register with their local control body before they are allowed to market their food as organic. Any manufacturer must have the organic logo on the product to claim it as organic. The logo can only be used on products that have been certified as organic by an authorized control agency or body. Moreover, for organic farming, there are stringent rules which restrict the implementation of the practice. For instance, in the EU the production of organic crops on conventional farmland requires the land to be free of chemicals for five years. To provide an effective legal framework for organic farming, the EU has passed new legislation that will come into force on 1 January 2021. Thus, these stringent regulations associated with organic products restrict the growth of the global organic sugar market.

The certification for organic products is a complex process. The organic food manufacturers must guarantee that all ingredients are sourced from certified organic growers and suppliers and that these ingredients have not encountered conventional ingredients. In addition to this, there is immense paperwork required to track each original organic ingredient through production and into the finished product. This process is time-consuming, which results in significant costs. Thus, the complexity and long processing time for the certification process is a major challenge faced by players in the global organic sugar market.