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Is Sugar Turning the Economy Sour?

22.10.2013

Sugar may be sweet, but excess consumption leaves a bitter aftertaste. Millions of people worldwide are affected by type II diabetes or obesity, costing the global healthcare system billions of dollars every year. The Credit Suisse Research Institute's 2013 study "Sugar: Consumption at a crossroads" found that close to 90 percent of general practitioners surveyed in the US, Europe and Asia believe excess sugar consumption is linked to the sharp growth in these health problems.

Is Sugar Turning the Economy Sour?

Close to 400 million people worldwide are affected by type II diabetes – a number that is quickly rising. Not only damaging for the health of individuals, the associated costs for the global healthcare system are estimated at a staggering 470 billion US dollars every year, representing over 10 percent of all healthcare costs. If things don't change, the number of people affected could be close to 500 million by 2020, and costs could rise to a whopping 700 billon US dollars.

The Credit Suisse Research Institute's 2013 study "Sugar: Consumption at a crossroads" found that close to 90 percent of general practitioners in the US, Europe and Asia believe that the sharp growth in type II diabetes and the current obesity epidemic are strongly linked to excess sugar consumption. "Although causality is difficult to prove in this area, with such a high percentage of doctors in our proprietary survey confident of this strong link, we cannot ignore the significance and the implications for society and our economy any longer," Stefano Natella, Head of Global Equity Research at Credit Suisse and an author of the study, says.

The Truth About Sugar

How did we end up here? Things began to change in the 1960s. Following two world wars, rationing and measured consumption became a problem of the past. As concerns arose around the increase in heart diseases and other chronic problems in the 1970s, with limited scientific proof, the blame was put down to fat. To keep food tasting good, fat calories were replaced with sugar or high fructose corn syrup (HFCS) – a cheap commodity back then. Today, added sugar can be found in almost everything edible: we feed it to children, it laces our breakfast cereals and it is a key ingredient of our soft drinks. As consumption has risen over the years, so has the prevalence of type II diabetes and obesity. Nowadays, 4.8 million people die of type II diabetes every year and close to 20 percent of the global population is obese.

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What Recommended Daily Intake?

Today, the world daily average consumption of added sugar per person is 17 teaspoons, up 45 percent compared to 30 years ago. Although genetic variations allow some people to tolerate more sugar than others, and may explain the difference in the prevalence of type II diabetes across countries and races, a scientific statement issued by the American Heart Association recommends that women eat no more than six teaspoons of added sugar a day and men no more than nine. "Although consumption varies considerably from country to country, current intake of added sugars is well above these recommended levels in several developed and developing countries," Natella says.

US #1 in Caloric Sweeteners Consumption (Sugar and HFCS)

The Credit Suisse study found that the US is currently the world's biggest consumer of sugar and caloric sweeteners, consuming an average of 40 teaspoons per person, per day. It's not surprising that the country has the world's highest rate of adult obesity (34 percent of the adult population), is ranked second in childhood obesity (35 percent) and has a relatively high prevalence of type II diabetes (10 percent). Brazil, Argentina, Australia and Mexico follow closely behind in sugar intake, consuming between 35 and 38 teaspoons on average per person, per day. At seven teaspoons per day, China consumes the least among the world's largest countries.

Soft Drinks: the Real Villains ?

The bad news for soft drink-lovers is that recent studies, including the Credit Suisse Research Institute's analysis, show that type II diabetes and obesity are highly correlated with full-calorie soft drinks. Credit Suisse estimates that 43 percent of added sugars in our diets come from sweetened beverages – easy to comprehend given that one can of soft drink averages eight teaspoons of sugar. "Recent research shows that as the sugar is in a solution, it is easily and completely ingested, giving a large injection of calories without the consequential feeling of being full," Natella explains.

Consumers Get Smart

The facts are worrisome, but the good news is that public perception is beginning to shift, thanks to rising media attention and a growing body of medical research. "Within certain segments of the population, we are already seeing a reduction in consumption. However, this varies significantly with geography, income and particularly education," Natella says. Intervention might be the only solution to generate substantial change. "To help fund the growing health costs associated with excess sugar consumption while reducing daily sugar intake, we believe taxation is an option that may soon be tested in some countries."

The potential for a surge in negative public opinion and the looming threat of regulation and taxation are issues that the food and beverage industry needs to tackle. Already, diversification into healthier products has been unfolding. For example, beverage companies have recognized the need to diversify into healthier products, including fruit juices, sports drinks, bottled water of all flavors and diet soda. But as Credit Suisse's study showed, people that favor diet soft drinks over the full-calorie versions are often those with higher incomes and educations. In addition, many of these alternative products are coming under scrutiny; either as sugar in a healthier guise (fruit juices) or for the inferred detriments of artificial sweeteners.

What Does the Future Hold?

Although a major consumer shift away from added sugar may be some years away, and outright taxation and regulation a delicate process, a trend is now developing. "From the expansion of 'high intensity' natural sweeteners to an increase in social responsibility messages from beverage manufacturers, we see green shoots for dietary changes and social health advancement," Natella says. Ultimately, consumers, doctors, manufacturers and legislators will all likely play a crucial role in changing the status quo for sugar – only then will the tide turn. "Considering all these factors, we expect growth in sugar consumption – which has paralleled that of the growth in the world population at around two percent a year – to come under pressure, even though it make take a few years."

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