Consumption ata crossroads
September 2013
Rsarch
Institute
Thought leadership from Credit Suisse Researchand the world’s foremost experts
Sugar
 
Introduction
Th global obsity pidmic and rlatd nutritional issus ararguably this cntury’s primary social halth concrn. Withbrakthroughs in th fild of mdicin, hug laps in cancr rsarch and disass such as smallpox and polio largly rad-icatd, popl around th glob ar, on arag, liing muchlongr and halthir than thy wr dcads ago. Th focuson wll-bing has shiftd from disas to dit. Th whol con-cpt of halthy liing is a ky pillar of our Crdit Suiss Mga-trnds framwork – thms w considr crucial in th olu-tion of th instmnt world. In this rport, w spcificallyxplor th impact of “sugar and swtnrs” on our dits.
 Although mdical rsarch is yt to pro conclusily thatsugar is in fact th lading caus of obsity, diabts typ II or mtabolic syndrom, w compar and contrast arious studison its mtabolic ffcts and nutritional impact. Alongsid this, w qustion som of th accptd wisdom as to what is pr-cid as “good” and “bad” whn it coms to sugar consump-tion, namly as to whthr a calori consumd is th samrgardlss of whr it is drid from – sugar, fats, or protin –and whthr solid foods ar “nutritionally diffrnt” to liquids.
Naturally, rcnt focus hr – mdical, mdia and rgulatory– has intnsifid on crtain products, with soft drinks bing thcommon dnominator for all thr. Within th population, war alrady sing a gradual rduction in th consumption ofsugar and a switch to an altrnati “dit” or “low-fat” products,particularly among th most highly ducatd. Dmands for rgulation, or taxation to limit consumption, ar growing. Ytgornmnts and halth officials ha so far takn a mixdstanc on th mattr.
Th potntial for a surg in ngati public opinion and thlooming thrat of rgulation and taxation ar issus that thfood and brag industry clarly must addrss, though thxtnt to which thy can do so without hurting thir currntbusinss modls is up for qustion. A dirsification into nwhalthir products is gathring momntum. Chang will bringnw instmnt opportunitis with clar winnrs and losrs.What can w xpct in th futur? What should instorsfocus on? Although a major consumr shift away from sugar and high-fructos corn syrup may b som yars away, andoutright taxation and rgulation a dlicat procss, thr isnow a trnd dloping. From th xpansion of “high-intnsity”natural swtnrs to an incras in social rsponsibility ms-sags from th brag manufacturrs, w s grn shootsfor ditary changs and social halth adancmnt. Ultimatly, w xpct consumrs, doctors, manufacturrs and lgislatorsto all play a crucial rol in changing th status quo for sugar.
Giles Keating,
Had of Rsarch for Priat Banking andWalth Managmnt
Stefano Natella,
Co-Had of Global Scuritis Rsarch
 Contents
03 Introduction04 Composition, consumption andconsequences06 Medical research16 The world sweetener market
18 Sugar 20 High-fructos corn syrup (HFCS)21 High-intnsity/artificialswtnrs (HIS)
22 The consumers26 Public policy initiatives32 Corporates: Self-regulationand opportunities41 References43 Bibliography43 Imprint / DisclaimerFor more information, please contact:
Richard Krsly, Had of GlobalScuritis Products and Thms,Crdit Suiss Invstmnt Banking,richard.krsly@crdit-suiss.comMichal O’Sullivan, Had of PortfolioStratgy & Thmatic Rsarch,Crdit Suiss Privat Bankingmichal.o’sullivan@crdit-suiss.com
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SUGAR
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SUGAR
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Thr can b no doubt that th globalobsity pidmic has bn at th cn-tr of a major dbat inoling mdicalrsarch, halthcar profssionals,insuranc companis and socity atlarg. Mor rcntly, rsarch hasshown that a significant numbr ofchronic disass, including coronaryhart disass, mtabolic syndrom,and diabts typ II strongly corrlat with wight gain. Th futur costs ofdaling with all ths disass ar put-ting furthr prssur on th priat andpublic sctors’ financs alik.
Whil ths disass might rsultfrom th combind ffct of sralfactors, rcnt focus – mdical, mdiaand rgulatory – has conrgd on throl playd by sugar consumption, withsoft drinks bing th common dnomi-nator for all thr. Opinions on thffcts of sugar rang from thos whomaintain that it is toxic to thos whosay that it is a natural product and pr-fctly halthy at currnt lls of con-sumption. Whil th partis on bothsids of th dbat continu to dis-agr on a numbr of important issus,thr ar sral aras whr thr arfw doubts.
1.
Th consumption of addd sugar (sugar not containd in natural productslik fruit or milk) or high-fructos cornsyrup (HFCS) has incrasd dramati-cally ovr th last fw dcads. Adddsugar is now ubiquitous in procssdfoods, both as a flavor nhancr andprsrvativ. Th world daily avragconsumption of sugar and HFCSpr prson is now 70 grams (or 17taspoons) pr day, up 46% sinc30 yars ago (whn it was 48 gramspr day). This is th quivalnt of280 caloris pr day (four caloris for ach gram of sugar). Yt, consumptionvaris considrably from country tocountry. At th top, w find th USA,Brazil, Argntina, Australia and Mxico,all at mor than doubl th world avr-ag; ranging from 40 taspoons for thUSA to 35 for Mxico. At th othr nd, w find China with 7 taspoons.If you xclud childrn lss than four yars old, you can add anothr 5%–10% to th numbrs abov.
2.
Whil mdical rsarch is yt topro conclusily that sugar is thlading caus of obsity, diabts typII and mtabolic syndrom, th balancof rcnt mdical rsarch studis arcoalscing around this conclusion. Adancs in undrstanding th nga-ti ffcts of rfind carbohydrats onblood sugar rgulation and cholstrol,and th mtabolic impacts of fructos,ar undrmining th traditional iwthat all caloris ar th sam. 
3.
Gntic ariations in insulinrspons ar an important factor andallow som popl to tolrat morsugar than othrs. en so, a scintificstatmnt issud by th AmricanHart Association in 2009
1
rcom-mnds that womn tak no mor thansix taspoons of addd sugar a dayand mn no mor than nin. To put thisin contxt, a rgular can of soda hasight taspoons of sugar, as dos aon cup sring of low-fat granola.Basd on th figurs abo, currntintak of addd sugars is wll aboths “rcommndd” lls in sraldlopd and dloping countris.
4.
Liquid and solid “sugar caloris” arhandld diffrntly by th body. Thnrgy that is obtaind through br-
corrlation btwn obsity and sodaconsumption across many populationsis conincing and is a particular riskfactor for childhood obsity. Mxico,for xampl, ranks scond in th worldin adult obsity, first in diabts typ II– which is th lading caus of dathin th country – and fourth in infantilobsity.
2
 It also ranks scond globally inaddd sugar consumption pr prsonand scond in th amount of soft drinksconsumd pr prson, with 95% ofsoft drinks consumd (xcluding watr)bing full-calori.
7.
Rgulators, gornmnts and publicofficials ha don littl so far to coun-tract concrns, with ry fw notablxcptions. Yt, w stimat that thannual costs to th halthcar systmdu to th global obsity pidmic arin xcss of USD 600 billion. But ob-sity, as bad as it is, is not th most worrisom issu.Diabts typ II is now affctingclos to 370 million popl worldwid, with on in tn US adults affctd byit. Th costs to th global halthcarsystm ar a staggring USD 470 bil-lion according to th most rcnt sti-mats from th Intrnational DiabtsFdration, and rprsnt or 10% ofall halthcar costs. In th USA alon,th halthcar costs tid to diabtstyp II ar stimatd at USD 140 bil-lion, compard to USD 90 billion for tobacco-rlatd halthcar costs. enmor worrisom is that ths numbrsar growing at a rat of 4% a yar,much fastr than for obsity (1%–2%).By 2020, th annual cost to thhalthcar systm globally will rachUSD 700 billion and th poplaffctd will b clos to 500 million.Rcnt nts would indicat that localand national authoritis around thglob ar bginning to tak action, with arying dgrs of succss. Intr-ntions includ anti-soda adrtisingcampaigns, tax lis, rmoal ofnding machins in schools and rgu-lation of portion siz. Howr, asMayor Bloombrg discord in NwYork, whn his attmpt to limit cupsizs was dfatd in court, th com-bind lobby of th sugar industry – which is a hug mployr and thr-for has significant oting powr andthat of th food and brag manu-facturrs – maks things much mordifficult. Aftr balancing argumnts infaor and against, w bli that taxa-tion would b th bst approach and will proid th bst outcom: rducingconsumption whil hlping th publicsctor dal with th growing social andmdical costs.
8.
 Against growing ngati publicopinion and th thrat of rgulation or taxation, th food and brag indus-try is bginning to tak stps toward“slf-rgulation” and pro-acti mdiacampaigns. Th brag industry hasalso for som tim rcognizd thnd to dirsify into halthir prod-ucts, including fruit juics, sportsdrinks, bottld watr and dit soda.Howr, many of ths products aralso coming undr scrutiny; ithr assugar in a halthir guis (fruit juics)or for th infrrd disadantags ofartificial swtnrs – particularly Aspartam, whos application wasrjctd six tims by th Food andDrug Administration (FDA).
9.
In th procss of slf-rgulatingand ducating th public to takadantag of halthir choics, thbrag manufacturing industry hason adantag: in most cass, italrady proids a halthir altrnatiof th fully caloric rsion (which is notth cas for th tobacco and alcoholindustry. W bli th nxt stp in“slf-rgulation” will b to launch foodand brags that us natural swt-nrs with zro or minimal caloric con-tnt. Th xprimnt of Coca-ColaLif in Argntina (swtnd with halfStia and half sugar lading to a50% rduction in caloris) is an xam-pl of what w xpct to s or thnxt fw yars.
10.
Bringing all this togthr, wbli that th “nois” on sugar andits ffcts on our halth will incrasrathr than dcras. en wllrgardd and indpndnt bodis likth World Halth Organization (WHO)ha to catch up. In all its rports ondiabts, th WHO barly mntionssugar as ithr a caus or as part ofth tratmnt (i.. rducing sugar intak). So th most likly outcomor th nxt 5–10 yars will b a sig-nificant rduction in sugar consumptionand a markd incras in th rolplayd by high-intnsity natural swt-nrs in food and brags. Softdrink consumption might suffr som- what in th short trm, as it will taksom tim for companis to succss-fully stablish a nw lin of “halthir”altrnatis.
Composition, consumptionand consequences
1
Circulation, Journal of th Amrican Hart Associa-tion (August 2009) – http://circ.ahajournals.org/contnt/120/11/1011.full.pdf
2
 
Data ar basd on masurmnts rathr thanslf-rportd hight and wight. OeCD HalthData 2011 – http://www.ocd.org/ls/halth-systms/49105858.pdf
ags is intrprtd and procssd dif-frntly by our body from nrgy that isobtaind through solid foods, n ifth orall quantity of caloris con-sumd is th sam. Sugar by itslf is apoor sourc of caloris as it proidslittl nutritional alu. Not surprisingly,th public dbat has cntrd on softdrinks and th rol thy ha playd inthis issu.
5.
Th mdical profssion has manytims pointd to th link btwn sugar and th disass w mntiond abo,but dfiniti causality has bn difficultto pro, as xprimnts inol a largnumbr of indiiduals undr dirction tofollow a controlld dit for sralmonths or yars. Yt, our propritarysury of gnral practitionrs in thUSA, europ and Asia shows thatclos to 90% of participants supportths conclusions. In addition, thr isnot a singl study showing that adddsugar is good for you, which would bxpctd if th impact of sugar or HFCS was truly nutral.
6.
Consumrs ar incrasingly awarof this dbat. Within th population, w ar alrady sing signs of rduc-tion in th consumption of sugar, par-ticularly among th most highly du-catd. Public opinion asking for somrgulation or taxation to limit consump-tion is growing.
Sugar-swtnd brags, whichar concntratd sourcs of sugar, arbcoming a main focus of consumrs.In th USA, 31% of sugar supply isabsorbd by th brag industry. As th sugar is in a solution, it is asilyand compltly ingstd, giing a larginjction of caloris without th cons-quntial satiation of apptit. Th
SUGAR
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SUGAR
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