Israel Sugar Market - Forecasts from 2022 to 2027

The Israel sugar market was valued at US$85.683 million in 2020 and is expected to grow at a CAGR of 2.69% over the forecast period to reach a market size of US$103.196 million in 2027.

Sugar is obtained from either extracting the sugar beet or sugar cane plant, after that it can be made into different forms. Many industries these days are increasingly using sugar for different purposes such as bakery, confectionery, canned food, frozen foods, pharmaceuticals, and so on. Due to the increasing consumption of sugar by different industries and people, the demand and production of sugar have increased which will help boost the market growth. Additionally, increasing investment and product innovation by major players coupled with new product launches may further bolster the growth of the market.

Innovative solutions by market players to boost growth

Health organizations and the government of the country have been seeking effective sugar-reduction solutions in food and beverage products, specifically reduced-sugar juices. Consequently, Blue Tree came up with an innovative technology that selectively removes sugars from sucrose without touching the other sugars or introducing additives. The process maintains the original composition of the drink, except for the sugar. Further, Better Juice’s solution uses natural enzymes for the conversion of sugars in the juice to non-digestible compounds, such as dietary fibres. It removes sugar from all sorts of fruit juice. Since it is replaced with other sweet molecules, the process keeps all of the natural and healthy elements, without altering the sweet taste of the juice. This way, the beverage industry would be able to use sugar in their products without having to worry about the health disadvantages that it causes, which is expected to attract customers and thus, drive growth in the market.

Government policies to act as a restraint

Israel’s budget for the year 2022 proposed new taxes on high-sugar drinks and disposable plasticware intended in order to reduce their consumption. This was done so that the new taxes would make these products more expensive for consumers to incentivize shoppers to choose healthier and more environmentally friendly options. According to the plan outlined in the Economic Arrangements Law accompanying the budget, drinks with high sugar levels will be taxed at NIS 1.30 per litre. Diet soft drinks and those with less added sugar, such as flavoured waters, would be taxed 70 agorot per litre. The Finance Ministry projected that this implementation would reduce the usage of such items by about 41%. This policy is thus expected to restrain the growth of the sugar market in the country due to reduced consumption.

Online channels to grow substantially

Israel presents an excellent opportunity for online sellers in the country. Being a tech-driven market, Israel has a growing number of companies and start-ups that specialize in e-commerce activity and infrastructure; from secured payments to shipping logistics. The increase of eCommerce-focused companies, along with the growth in the volume of online shopping, advances the development and improvement of the eCommerce supply chain. According to the ITA (International Trade Association), the market volume of the top 100 Israeli online stores increased by 78% from 2018 to 2022, which is expected to cause an increase in eCommerce activity in the country. According to further information by the ITA, an international comparison of online shares showed that there is the potential for high online penetration in all eCommerce categories in the country. This development t of e-commerce in the country is thus expected to boost the growth of the market.

Further, according to DataReportal, there were about 7.97 million internet users in Israel in January 2022, showing an increase of 3.8% between 2021 and 2022. Further, according to the data, internet penetration in the country stood at 90% in January 2022, with the number of mobile connections at a staggering 117.3% of the total population. Thus, this growing internet population in the country is further projected to drive the online channel of distribution in the projection period.

COVID-19 Insights

The outbreak of the COVID-19 pandemic affected the market negatively. The pandemic resulted in the implementation of nationwide lockdowns and social distancing measures in the country, which affected the production, as well as the distribution of the crops to obtain sugar. Further, the lockdowns also mandated the shutdown of offline retail stores in the country, which are still a major source of distribution, thus making the market dip even further.

Market Segmentation:

• By Form
• Granulated
• Powdered
• Syrup
• By Source
• Cane Sugar
• Beet Sugar
• By Use
• Food and Beverage
• Pharmaceuticals
• By Distribution Channel
• Online
• Offline