Healthy drinks made from plant protein have become fantastically popular among Chinese customers at a time when rapid economic development and fast-improving living standards have been influencing consumer tastes.
As China’s per-capita disposable income rises, more wealthy and health-conscious consumers are seeking beverages that stress their “natural”, “nutritional” and “healthy” credentials.
The strength of healthy plant-protein drinks has reached the point whereby over 5.8bn litres were sold last year, worth US$10.1bn—up 28% on the year—according to market analyst CCM.
This category largely comprises milky beverages made from the likes of soybean, peanut, almond, walnut and coconut. They are usually a source of rich nutrition, featuring high-quality protein, unsaturated fatty acids, essential amino acids, vitamins and minerals.
Accordingly, for beverages marketed as healthy, their charge has had a knock-on effect in industry demand for natural and functional sweeteners, especially at a time when consumers are becoming more hostile towards sugar.
Indeed, brands that use functional sweeteners have been seeing particular success, with functional oligosaccharide, erythritol, sorbitol, malt sugars and xylitol in significant consumer demand.
Such sweetening ingredients are now popular among manufacturers and accepted by the market as sugar substitutes. Some sugar alcohols—which contrary to their name are not intoxicating—have no effect on insulin levels, so are helpful for diabetes patients. Others are notable for their various health characteristics, such as stevia.
This all adds up to a tandem win for plant protein drinks manufacturers and functional sugar suppliers, which have been racing into the market—helped by a continual drop in technology costs and raw material prices, CCM says.
A case in point, erythritol was first developed for industrial production in China in 2004. At that time, the price was relatively high due to nascent technology and basic production facilities, but in recent years it has fallen thanks to the development of fermentation technology.
In 2011, the average price of the functional sugar was US$4,900 per tonne—a figure that has dropped to US$3,700 today.
The fall in erythritol prices is also partly due to a reduction in the price of glucose monohydrate, the main raw material in its production. So far this year, the average price of glucose monohydrate is down by more than 35% compared to 2015, at US$450 per tonne.
China’s three key erythritol producers— Zibo Zhongshi Gerui, Binzhou Sanyuan and Baolingbao—together produce over 20,000 tonnes a year. Moreover, Sibo has plans to produce an additional 5,000 tonnes later this year, CCM believes.
With growing market demand, better technology and a decline of raw material prices, analysts do not foresee an end to China’s erythritol boom. Likewise, other functional sugars, including xylitol, sorbitol and maltitol, are expected to gain more market recognition over the coming years.
With indications that the plant-protein drinks industry will grow at a rate of around 20% over the next three years, and sales eclipsing the US$22bn mark in 2020, functional sugars manufacturers still have plenty of scope for growth on the back of this symbiotic segment.