Bio-sugar growth market not an option for the Netherlands

Organic sugar is an emerging market, but production will not get off the ground in the Netherlands for the time being. Not because we haven't tried. How that works, is explained in this analysis.

Nordzucker announced mid December to get into organic sugar. However, the second largest sugar producer in Europe is not the first European sugar processor to see opportunities in organic. For example, Südzucker offers organic products for baby food, organic baked goods and 500 gram packaging for consumers, and the Austrian company Agrana sells organic sugar products to food producers, the processing industry and the end user.

The German and Austrian markets have been experiencing a growing consumer flow of organic foods for years, partly prompted by the powerful PR machines. The growing demand for organic sugar is the reason for Nordzucker to respond to this. Currently, a large part of the organic sugar still comes from the import of cane sugar from Latin America, including Brazil and Paraguay. But the market is growing fast and the demand is only increasing. It is therefore not very surprising that Nordzucker is stepping in. Keeping the processes separate between mainstream and organic at the start of the campaign is going to be a challenge, but the premiums are apparently interesting enough to justify it.

Yet Suiker Unie was earlier. The Dutch sugar company already made an attempt 10 to 15 years ago with organic beet sugar. A few years later, however, the producer gave up again. As a large sugar factory it was difficult to keep up with the production of a small biological volume in combination with the many requirements. Moreover, the demand was meager at the time. The Dutch consumer was apparently not ready for it at the time. In 2017, the trend has now reversed. Looking at consumer trends in food, bio-sugar is now interesting, various specialists also acknowledge.

However, it is not expected that Suiker Unie will pick up organic production again soon. The reason why it was discontinued at the time has not gone away. In fact; the factories have only grown in capacity. In view of the package of requirements, incorporating an extremely small biological flow into the total campaign and production process is quite a challenge. Especially if it has to be economically feasible. The factory scale is a problem that Germany, with several smaller factories, has no or less of a problem with. Another argument why bio-sugar is not yet an option in the Netherlands is that conventional sugar is a commodity that is traded worldwide. However, there is no futures market for organic products, which makes it difficult to keep an eye on the price.

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