Italy’s sugar market is projected to grow at a CAGR of 3.16% to reach US$321.046 million by 2027, from US$258.274 million in 2020.
Sugar is used widely across different industry verticals such as food & beverage, and confectionary, among a few. Italy is well-known for its regional deserts such as Tiramisù (Veneto), Bônet (Piedmont), Torta Barozzi (Emilia-Romagna), Zuppa Inglese (Central Italy), and Babà (Naples). Sugar in Italy is produced from beet. It is a traditional and natural ingredient that contributes to the color, flavor, and texture of foods. Sugar provides the body with energy in the form of glucose, which is essential for the optimal functioning of the brain, muscles, and nervous system under normal conditions. The Italian industries which produce and use sugar are quite conscious of their role and responsibility in producing safe and healthy products. Italy is an importer of sugar according to UN Comtrade. In 2021, it imported US$1.18 billion in sugar and sugar confectionary altogether.
Market Restraints
Over the years, people have significantly changed their habits toward the healthier side. Sugar, which is a staple food across the globe, can lead to severe health diseases if taken in excess. People demanding low-sugar or sugar-free alternatives is a key market restraint. This strong demand is linked to increasing cases of diabetes and obesity. Moreover, the International Diabetes Federation (IDF) estimates that the global prevalence rate of diabetes over the previous ten years was 3% per year. According to the IDF, there will be 592 million individuals living with diabetes globally by 2035. The Italian government has also been taking initiatives to promote a healthier lifestyle.
For instance, in July 2022, the Italian government announced the imposition of a sugar tax. The sugar tax will be effective from January 2023. The sugar tax will be applied to a wide range of products, such as fruit juice (including grape must or coconut water), vegetal and legumes juices, mineral and aerated waters with sugar or other sweeteners or flavoring, and other non-alcoholic beverages if they meet the characteristics of being called a sweetener, which is intended as any substance, whether of natural or synthetic origin, that is capable of giving a sweet taste to beverages. The sugar tax will be due at €10 per hectoliter, for the finished products, and 0.25 € per kilogram, for products designed to be used after dilution. Italian manufacturers, an Italian party providing the packaging, a person, resident or nonresident in Italy, on whose behalf the sweetened drinks are obtained by the Italian manufacturer or by the packaging plant's operator, a purchaser who is a resident or nonresident in Italy, and has bought sweetened drinks that were shipped from the other EU Member States or any importer for sweetened drinks that shipped from non-EU countries, all the above mention parties are liable to the new tax. Penalties are also predefined; they range from €250 to €2,500.
COVID-19 Insights
The COVID-19 pandemic had drastically affected staple foods, as due to the lockdown production units were closed. It worsened the value chain. Along with that, sugar demand from hotels, retailers, bars, and other establishments was also stopped due to the nation wise lockdown. Apart from being used as a final good, it disrupted the industry where it is used as an intermediate good, such as food, and beverage. The sugar supplies to these industries were stopped, and therefore, even they had to put a halt in their operations.
