Why are natural sweeteners so expensive?

This is a really good question but what if we reframe this question to ask, why is sugar so cheap?

After a bit of reading across the web, here are a couple of factors behind why sugar is so cheap: 

Prevalence of production

In part because sugar can come from cane or beet as the source and therefore grown almost anywhere, so many countries produce it and many like Brazil, India, Thailand, China, and the United States produce it en mass. It was technology invented in the early 20th century that made it cheaper to process sugar and the boom was on!!

Here is a scary chart from an interesting website (Sugar and Sweetener Guide):

An easy start

This is an awkward one and related to the first point on how sugar became so prevalent, but if we look back to the 19th century there was free (slave) labour and free (expropriated) land available to colonial and American plantation owners. Sugar production grew massively through the 19th and 20th centuries as a result of this increasingly cheap production. Once upon a time sugar was a luxury for the rich and elite, but wider consumption sky rocketed as technology made production easier, and with this commoditisation, prices plummeted. 

Government Intervention

The global sugar industry is a USD 38 billion dollar business in 2022, which is expected to keep growing despite developed countries becoming more aware of the negatives. A commodity industry of this scale has many vested interests driving it forward.

Most countries provide some form of subsidy to industries of importance and the sugar industry is no different. For example, the US government provides support to maintain price stability under what is called the US Sugar Program. Other countries do the same because a stable, cheap price means that all the products produced with sugar as an ingredient - from beverages to desserts or even bread - can also maintain reasonable price stability. 

Battling Upwards

Natural sweeteners are the competition to the status quo. Production volumes remain fairly small as the world is awash in cheap sugar. In contrast to the USD 38 billion sugar industry, the market size of one of the more prevalent natural sweeteners, Stevia, is still just USD 770 million dollars in size. The Xylitol market is also less than a billion USD and even though it is growing rapidly, the Erythritol market is less than half of that.

It may take some time for prices to come down, but if Coca Cola (or any other major sugar user) decides to go big on any natural sweetener then production will need to increase. I would assume that after an initial spike in prices due to the sudden scarcity, prices will come down as that production comes on line for everyone other than Coca Cola (or whoever it may be that reduced supply). 

In reality I assume a Coca Cola (or other) will stick to sugar as their cash cow because it is so addictive, and continue to offer synthetic/artificial sweeteners because they are also cheap to produce. This model is tried and proven as hugely profitable, and it may require government intervention toward healthy outcomes before anything changes.

Making Change

Despite the shocking increase in Diabetes Mellitus (Type-2) around the western world, including New Zealand, not many governments seem motivated to do that. There are all kinds of arguments as to why that is so - from the tax revenues coming off the healthcare sector, to lobbyists having all the power - and until people speak up to their politicians, all of this will be hard to change. 

What we can say is that for those of us who need a little sweetness in our lives, without the health risks, we need to pay a bit extra to have it. The faster this sector grows, the more production expands and the quicker prices should fall. 

Stay healthy people!!