Switzerland Sugar Market - Forecasts from 2022 to 2027

The Switzerland sugar market was valued at US$400.441 million in 2020 and is expected to grow at a CAGR of 3.19% over the forecast period to reach a market size of US$498.785 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, etc. 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.

According to SWI swissinfo.ch each year, from October to December over 1.5 million tonnes of sugar beets grown in Switzerland are harvested in order to be supplied to the country’s sugar industry, which is being kept alive by massive government subsidies, with Aarberg, being home to the country’s largest sugar factory. The Aarberg site is one of the two sites, the other one being Frauenfeld, in northeastern Switzerland, which is owned by Sucre Suisse. Together, these two account for all of Switzerland’s sugar production capacity, which caps out at about 270,000 tonnes annually according to the same reports. Further, over 66% of the sugar produced by Sucre Suisse is consumed by the food industry of Switzerland, with consumers including major players of the food & beverage industry like Red Bull and Rivella drinks, along with multinational food and drinks conglomerate Nestlé, and chocolate maker Lindt.

Government subsidies to hold the market in good stead

The Swiss sugar beet industry has been struggling, with the area under cultivation continuing to decline. Factors like diseases, stringent regulations on pesticides, and low sugar prices have attributed to the reduced attractiveness of such crops in recent years. Thus, in March 2021, the Swiss parliament decided to support domestic sugar production with subsidies since, in Switzerland, approximately 4,000 farms rely on sugar beet in their crop rotation.

Further, in September 2021, the parliament of Switzerland extended the government subsidies introduced from 2018 until 2023. The subsidies were introduced in 2018 in an effort to tackle the industry’s decline in the country, the Swiss government increased subsidies for beet growers by CHF300/ha to a new figure of CHF2,100/ha. Adding to that, it also put a premium on organic production and introduced customs protection of at least CHF70 per tonne of sugar. Thus, efforts like these by the Swiss government are expected to propel the growth in the sugar industry of the region.

Online channels to grow substantially

According to the ITA (International Trade Association), Switzerland is one of the top five European countries in the proportion of online purchases. In 2020, the online share of retail sales in the country was 13% and in 2021, the sales in Switzerland of Swiss online retailers continued to grow more rapidly than those of their foreign counterparts. Further, according to the ITA, in total, Swiss residents spent about CHF 13 billion in local online shops in 2021, and around CHF 2.1 billion ($2.16 billion) in foreign online shops. Thus, this penetration of online retail is expected to boost the online channels of distribution in. the coming years.

Further, according to DataReportal, there were about 8.57 million internet users in Switzerland in January 2022, showing an increase of 1.7% between 2021 and 2022. Further, according to the data, internet penetration in the country stood at 98% in January 2022, with the number of mobile connections at a staggering 119% 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

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