Allulose Value Chain

Goals

To provide information around the value chain of allulose, a sugar replacement product, including an overview of the manufacturing process and key players in the value chain (specifically, manufacturers, importers, and food/beverage companies). Insights will be used to help identify products benefiting from a consumer trend toward less use of processed sugar.

Early Findings

Allulose Market Overview

  • Allulose is a relatively new sugar substitute, available since 2015. The product is a "simple sugar" found naturally in products such as "wheat, jackfruit, figs, raisins, brown sugar, maple syrup, and caramel sauce."
  • The ingredient is not metabolized by the body, making it low in calories (1/10 the calories of regular sugar). According to allulose.org, additional benefits include taste, its use in baked and frozen goods, and being diabetes-friendly.
  • In April 2019, the US Food and Drug Administration (FDA) ruled that allulose could be treated as a carbohydrate, not a sugar, allowing manufacturers discretion to report a lower calorie count for the sweetener. According to Susan May, Ph.D., director of FDA's Center for Food Safety and Applied Nutrition, "The latest data suggests that allulose is different from other sugars in that it is not metabolized by the human body in the same way as table sugar. It has fewer calories, produces only negligible increases in blood glucose or insulin levels, and does not promote dental decay."
  • The global allulose market is projected to reach $210 million by the end of 2020, reaching $430 million by 2030 (8% CAGR).
  • North America and Asia account for the majority of the allulose market. Allulose is "approved and available in the United States, Mexico, Columbia, Chile, Costa Rica, and Singapore." The sweetener is not currently available in Europe and Canada.
  • End users are dominated by food companies (55%) and beverage companies (37%). Top end-user category segments include "therapeutic food", bakery, dairy, and confectionery. Allulose.org provides a more detailed list of product categories using allulose, such as yogurt, chewing gum, and salad dressings.
  • Key allulose manufacturing companies include Tate & Lyle, Matsutani Chemical Industry, CJ Cheil Jedang, Bonumese LLC, Cargill, Ingredion, Samyang, and Anderson Global. The recent FDA legislation has also given rise to companies such as Blue California, which applied to scale up to allulose commercialization in 2019.

Allulose Manufacturing Process

  • The process for manufacturing allulose at Tate and Lyle (with their branded allulose product, Dolcia Prima) starts with corn, which it "breaks down into starch and fructose and then converts the fructose to allulose via an enzymatic conversion process, using enzymes from a genetically engineered microbe." The company comments that the enzymes are "processing aids", not found in the final product.
  • Further commentary on the manufacturing process for Tate and Lyle's products can be found in the company's 2020 annual report: "Our ingredients come largely from agricultural crops, principally corn. We produce them mainly at large-volume corn wet mills shared by both divisions, and also at smaller blending facilities. Wherever we are in the process, from field to customer, our priorities are safety, quality and consideration for the environment."
  • Blue California provides a high-level explanation of their manufacturing process: " Blue California’s allulose is unique because it is created from natural substrates using a proprietary bioconversion technology to produce a natural and non-GMO sweetener."
  • Ingredion, a US-based manufacturer and supplier of allulose (brand name: ASTRAEA® Allulose, originally developed by Matsutani), describes their ingredient manufacturing process (applicable to allulose and its other ingredients) in detail: "Our manufacturing process is based on a capital-intensive, two-step process that involves the wet-milling and processing of starch-based materials, primarily corn. During the front-end process, the starch-based materials are steeped in a water-based solution and separated into starch and co-products such as animal feed and corn oil. The starch is then either dried for sale or further processed to make starches, sweeteners and other ingredients that serve the particular needs of various industries."

Allulose Value Chain: Manufacturers and Distributors

  • Manufacturers form the core of the allulose value chain, with key players "focusing on acquisition, mergers, and joint ventures to increase business footprints globally as well as to strengthen the distribution channel."
  • Some manufacturers consider themselves "end-to-end" partners with end-users, such as Tate and Lyle, which notes that "we partner and sell" and says, "We are moving from being an ingredient supplier to a growth partner for our customers", with food and beverage companies noted as one of their key customer segments.
  • Distributors support end-users by helping them make decisions about the best ingredients for their products and how best to use them. One such allulose supplier is Icon Foods, which specializes in "supplying the health food industry with natural alternatives to sugar" and highlights allulose as "one of the most exciting low-calorie natural sweeteners to hit the market in the past century."
  • Univar Solutions is "the U.S. distributor for ASTRAEA® Allulose, a brand-new sweetener from Ingredion," noting the end-benefits to their clients: "With a relentless focus on continuous improvement, we go beyond logistics to deliver the type of value-added solutions designed to help you achieve success."
  • Apura Ingredients partners with ingredient manufacturers in North America to deliver "high-quality alternative sweeteners to the food and beverage industry." The company notes that allulose is "all the rage right now," providing a summary of the ingredient: "With low net carbohydrates, allulose is keto- and paleo-friendly, as well as grain- and gluten-free. It is often blended with other natural sweeteners such as stevia, monk fruit, and erythritol."

Allulose Value Chain: End Users

  • As discussed above, food and beverage companies are the top users of allulose.
  • Quest Nutrition was a "high-profile, early adopter of allulose."
  • Foodboro.com highlights some additional brands using allulose in their products, including Good Dee's Baking Products, High Key Cereal, and Real Good Foods Ice Cream.
  • Cereal startup, Magic Spoon, uses allulose in their products.
  • Nutrishus Brands is working to broaden the distribution of its allulose-based, RxSugar product, currently available in some mainstream channels such as Publix and Vitamin Shoppe. Founder Steve Hanley highlights pricing as a current barrier in the industry, but that "the food and beverage companies’ increasing adoption of Allulose will ultimately lead to a price decrease." He also notes expects that "consumer demand for RxSugar to increase in a post-pandemic world as sugar elimination will be the norm."

Summary of Early Findings

  • In this early research, we were able to identify leading manufacturers of allulose, provide some perspective on the manufacturing process (mainly based on individual manufacturer descriptions), and summarize some additional players in the value chain, namely related to distribution and end-users (mainly food and beverage manufacturers).
  • While we were able to uncover major manufacturers of allulose, there was less information about other portions of the value chain, which is likely due to the emerging nature of the ingredient (launched in 2015 and going through a regulatory process in many countries). Beyond Quest bars, the ingredient is much more common in niche brands. However, based on consumer trend insights, recent regulatory legislation, and the expansion of manufacturer facilities into other countries, it appears that greater adoption of allulose among CPG companies may be on the horizon.
  • Finally, we did not find information specific to importers. This may be due to manufacturers being more likely to distribute allulose in local markets or a strategy of entering into local partnerships to distribute the product in other markets.
  • Recommendations for additional research are based on information-availability as determined by early research.


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