Sugar Free, Zydus Wellness’ artificial sweetener brand, witnessed double-digit growth last year in the wake of the Covid-19 pandemic, as consumers opted for a healthier lifestyle.
According to Tarun Arora, CEO, Zydus Wellness, after witnessing low single-digit – 3-4 percent – growth from 2014-2016 and then 9-10 percent growth from 2016-2019, sales of the product jumped by double digits in 2020.
“The growth this year is not at the same level but we are building on the high base of last year,” said Arora.
After witnessing this spurt, the company is planning to push the product further and is ramping up distribution as well and launching marketing campaigns. Zydus Wellness plans to target the ‘health-conscious consumer for Sugar Free, going beyond its core customer group: diabetic individuals.
Sugar substitutes as a category, said Arora, have also witnessed higher penetration of late as more households opted for the product amid the growing incidence of diabetes among consumers and the shift towards a healthier lifestyle. “There is a triple-digit increase in households that are now using the product,” he added.
The product, which was hitherto mostly an urban phenomenon, also saw more takers in rural areas. The share of rural sales, said Arora, now stands at 17 percent as compared to 12 percent in the pre-Covid period.
To tap this demand for the product in rural areas, Zydus Wellness will be introducing it to more stores. Currently, the product is available in 4-5 lakh outlets but in the next two years the company plans to expand its presence to 6 lakh outlets.
“Besides increasing our presence across outlets, we also plan to introduce more variants in the current stores,” said Arora.
The company had introduced a stevia-based product, Sugar Free Green, a few years back. However, it did not find many takers in the Indian market. The market for stevia products, said Arora, only stood at 0.5 percent of the entire sugar substitutes category back then.
“Under our leadership, it gained a 3 percent share of the market but then due to the high prices, we witnessed an unwillingness among people to shift,” he added.
The company relaunched the product last year after witnessing heightened consumer traction in recent years and is positioning it to target urban consumers. “We have reduced the price by 15-20 percent, while also formulating it to become sweeter than the earlier version.”
According to industry estimates, the artificial sweeteners market in India today is worth Rs 150 crore and is growing in double digits. The segment, experts say, is fuelled by the rising prevalence of diabetes, obesity, and cardiac diseases due to the high consumption of sugar-based products.
Driven by this trend, apart from sugar substitutes, the market for jaggery and honey has also witnessed a jump. While the sale of sugar substitutes has grown three times since the onset of the pandemic, honey grew over four times and jaggery by over three times, according to data from Bizom.
“There’s a definite surge in consumption of sugar substitutes in India post the pandemic. However, we’re seeing significantly higher growth in consumption of honey and jaggery-based products compared to other sugar-substitute products. We expect this trend to keep growing further as we see the emergence of more health-conscious consumers looking for sugar substitutes,” said Akshay D’Souza, chief of growth and insights at Mobisy Technologies, which owns Bizom.
But the industry will need to wean off consumers from sugar to tap the market.
“India is the second-largest producer and largest consumer of sugar in the world. The greatest challenge that the sweetener market in India faces while trying to expand the user base is people’s resistance to change from what has essentially been their way of life for centuries,” said Rajat Wahi, partner, Deloitte India.