COVID-19: World sugar consumption to drop first time in 40 years, says Study

* Consumers are eating less sugar at home ─ Czarnikow Group

*Pandemic crisis wipes out most of projected consumption growth in 2020 ─International Sugar Organisation

Isola Moses | ConsumerConnect

As billions of consumers of the staple item are stuck at home for several months as a result of the resulting from the outbreak of the devastating novel Coronavirus (COVID-19) pandemic, sugar demand growth has reduced recently.

Hitherto, besides health concerns in several economies across the world for ages, governments, doctors and celebrity chefs have tried but failed to get the world to consume less sugar.

However, the outbreak of the virus is said to have changed all that, according to Czarnikow Group

The global closure of restaurants, sports arenas and cinemas means sugar demand will drop this season for the first time in four decades, reports Bloomberg.

It was learnt that drink and confectionery sales giants such as Coca-Cola Company and Nestlé SA have fallen, and as numerous economies start to reopen, it is unclear how quickly demand will recover as incomes and employment fall, stated the report.

Ben Seed, an analyst at Czarnikow in London, said: “Consumption out of home is normally more than what you would now substitute and have at home.

“If you go to the cinema you would probably quite happily have a liter or maybe more of soda while you watch the film, whereas we just don’t think people would drink a whole liter of soda while watching Netflix.”

On reduction in sugar consumption, the group stated that the sugar industry was already under siege before the Coronavirus hit.

Demand growth, which is said to be largely driven by developing countries, slowed in recent years as lawmakers from South Africa to Thailand taxed sugary drinks and health groups urged people to cut back on carbs amid obesity concerns.

Companies responded by selling slimmed-down treats and sugar-free sodas, it said.

However, none of that had as much impact as the lockdowns that slashed out-of-home spending following the outbreak of COVID-19. And now the emerging global recession is hurting the demand outlook going forward.

According to the report, in the first three weeks of April 2020 alone, Coca-Cola’s volumes slid about 25%, and the company said the pandemic’s effect on the second quarter would be significant.

PepsiCo Inc. expects second-quarter revenue to fall and in Germany, a key sugar-consuming nation, a group of confectioners said sales at half of members surveyed fell in the four months through April.

Sugar consumption will slip 1.2% to 169.9 million tonnes this season, according to supply chain services company Czarnikow.

Analysts at the United States (US) Government and Citigroup Inc. also see demand falling this season.

The International Sugar Organisation said the Coronavirus crisis had wiped out most of 2020’s projected consumption growth, and bigger losses might follow.

John Stansfield, an analyst at trader Group Sopex, stated that dwindling demand would mean bigger-than-expected sugar surpluses this season and next.

While New York futures recovered since late April amid concerns that supplies out of Brazil may start tightening, they’re still almost 50% below a 2016 peak.

Even though people may turn to comfort foods like ice cream, that won’t offset lost consumption, said the report.

For example, London-based ice-cream maker Oddono’s Gelati Italiani Limited’s sales have been affected by reduced staff and physical distancing.

Christian Oddono, Co-founder of Gelati Italiani Limited, said: “If we were able to have five members of staff behind the counter serving as many people as possible at the fastest time, we would probably make 30%-40% more than we make now.

“Would people queue for an extra half an hour until it’s their turn? Some would do, some would probably turn around.”

There are still some positives. Lockdown measures are easing around the world and the U.S. Department of Agriculture expects global sugar consumption to rebound 3.6% to a record next season.

Demand growth on continents such as Africa and Asia is said to have outpaced the developed world in recent decades as rising populations and burgeoning middle classes spend more on treats.

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