By Sarah El Safty
DUBAI, Feb 5 (Reuters) - Sugar consumption is declining in the United States and Western Europe and is stagnating globally as higher taxes on soft drinks and the widening use of weight-loss drugs dampen demand, analysts and industry executives said.
The weakening of demand has already led to sugar factory closures in both the U.S. and Europe and helped to drive sugar prices down to around five-year lows, trends that could accelerate as lower prices of weight-loss drugs heighten their
popularity across the globe.
Sugar consumption in Western Europe has fallen by a total of 6.7% in the last two years and in the United States by 4.4%, according to International Sugar Organization data.
Global sugar consumption is forecast to grow 0.5% in the 2026/27 season, a historically low number but one that is becoming the "new normal," Eder Vieito, chief executive of analysts Green Pool, told Reuters on the sidelines of the annual Dubai Sugar Conference.
The slowdown follows many years of sustained growth which has seen consumption grow at about 2% a year and roughly double in the last 50 years.
"There are a number of factors there, not just the weight drugs, but that's certainly a factor," Vieito said, also mentioning sugar taxes and stricter food labelling laws.
The class of weight-loss drugs, known as GLP-1, reduces calorie intake by 16% to 39% with a decreased preference for sweet, high-fat foods, Annie Denny, Director General of the World Sugar Research Organisation (WSRO), told the conference.
Roughly one in eight U.S. adults have taken GLP-1 drugs such as Novo Nordisk's Wegovy and Eli Lilly's Zepbound although global usage is currently less than 1%, she said.
The drug usage is poised to grow particularly in G-20 countries with some patents expiring this year, allowing cheaper copycat alternatives into many markets.
Potential growth markets include Brazil, China, India and Turkey which together account for a quarter of the world's obese adults, Denny said.
The price of branded drugs such as Wegovy and Zepbound is also falling, helping to increase demand.
Taxes on sugary soft drinks have also played a role in a decline in sugar consumption in Europe over the last decade, Stephen Geldart, head of analysis at Czarnikow, said.
The taxes on soft drinks, introduced in many countries including Britain, Mexico and South Africa as an anti-obesity policy, are linked to the amount of sugar they contain and have prompted manufacturers to lower its use in their products.
"Over the last decade global demand growth has slowed as consumers and governments are demanding changes in sugar use. The slowdown in the growth of soft drinks that contain sugar is one driver of this," John Adams, Director of Sugar Research at GlobalData, said.
The decline in the West is for now being offset by increased demand for sugar in Asia and Africa linked to population growth, according to analysts, but the sustained rise over many decades appears to have stalled.
(Reporting by Sarah El Safty, Writing by Nigel Hunt;Editing by Elaine Hardcastle)
