Domestic sugar demand to grow at 1.5–2.0% CAGR over next 5 years: Deepak Ballani
ISMA’s study shows India’s per-capita sugar consumption has stabilised near 20 kg, with growth moderating to 1.5–2% CAGR. Post-COVID gains were cyclical, not structural. Demand is increasingly driven by institutional users (60–65%), while health awareness curbs intake mainly among higher-income urban consumers.
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has undertaken an interesting study to understand the sugar consumption pattern across India- the changing preferences across Tier I and II cities, cities that have traditional large families vis-à-vis nuclear families, and other dietary factors that play a crucial role in deciding the palette.
Citing the study, Deepak Ballani, DG, ISMA, told ChiniMandi that health awareness campaigns have suggested a noticeable change in the higher-income urban population towards less sugar-rich food, but the middle-income and lower-income population continue to enjoy sugar-rich food.
Q. Has India’s per-capita sugar consumption structurally slowed down?
A. India is the second-largest sugar producer and the largest consumer globally, though its per-capita sugar consumption remains below the global average due to its large population base.
According to a study conducted by ISMA on sugar consumption patterns in India, the country’s per-capita sugar consumption growth has moderated, with domestic sugar demand projected to grow at a stable 1.5–2.0% CAGR over the next five years.
Per-capita sugar consumption stood at about 20.1 kg in 2023–24, easing slightly to around 19.8 kg in the 2024–25 sugar season, while overall sugar demand remains steady and resilient.
Q. Are we able to hold onto the consumption gains that we saw post-COVID-19?
A. Post-COVID-19, India recorded an increase in overall sugar demand, supported by the revival of food services and higher consumption of packaged foods and beverages. Total sugar consumption rose from around 259 lakh tons in 2020-21 to about 290 lakh tons in 2023-24. However, this volume growth has not translated into a sustained increase in per-capita sugar consumption.
Sugar consumption in 2023–24 at 290 lakh tons was primarily driven by unrestricted cross-border exports and general elections in April – June. In the absence of any external drivers, 2024–25 sugar consumption is corrected to 281 lakh tons. However, 2025-26 sugar consumption is expected to increase moderately to around 285 lac tons.
Industry assessments suggest that institutional consumption— led by beverages, bakery, confectionery and dairy— continues to expand and now accounts for approximately 60–65% of total sugar demand, underpinning aggregate demand. In contrast, household sugar consumption has moderated.
As a result, per-capita sugar consumption has largely stabilised around 20 kg per annum. This trend indicates that the post-COVID consumption increase was more cyclical than structural, with future demand growth expected to remain modest and driven mainly by institutional consumption rather than household usage.
Q. How has health awareness altered sugar intake patterns?
A. As per the study conducted by ISMA on sugar consumption patterns in India, rising health awareness is influencing consumer behaviour, though the impact varies significantly across income groups and regions.
Consumer Segmentation Insights:
Among higher-income urban consumers, there is a shift toward moderating direct sugar intake, with increased preference for alternatives such as jaggery, khandsari, and low-sugar or no-added-sugar products.
Middle-income households continue to consume sugar-rich products, driven by affordability, taste preferences, and wider availability of packaged foods.
Lower-income and semi-urban/rural consumers remain largely price- and taste-driven, with no reduction in sugar consumption.
Institutional and Industrial Consumption:
The FMCG sector exhibits strong growth & continues to favour sugar as its core sweetener. Processed F&B categories are projected to grow 6-13% over the next 5-6 years, driving sustained high sugar demand.
Q. Are regional consumption trends diverging across North, West, East and South India?
A. ISMA’s findings indicate high dependence on sugar in certain regions, where traditional dietary habits and indulgent consumption continue.
Event-based and impulse consumption remains strong, particularly in Tier-2 and Tier-3 markets.
Regional differences are increasingly visible, primarily in pack-size preferences rather than overall consumption levels.
While bulk sales continue to dominate volumes, smaller consumer packs (1–5 kg) are witnessing a strong growth of 11–15% CAGR.
Metro cities show a clear preference for 0.5–1 kg packs, driven by nuclear families and young professionals, with quick commerce acting as a key enabler. In contrast, Tier-2 and
Tier-3 cities prefer 2–5 kg packs, reflecting larger household sizes and traditional usage.
States such as Gujarat and Rajasthan continue to prefer larger pack sizes due to joint family structures, while urban centres across regions are driving growth in smaller packs.
Q. Do we expect a consumption uptick in the current calendar year from a global perspective?
A. Based on the latest ISMA estimates and related industry forecasts:
Domestic sugar availability for the 2025–26 marketing year forecasts sugar production around 343.5 lakh tons, with domestic consumption estimated at around 285 lakh tons, up by 4 lakh tons from last year’s consumption.
This shows a slightly upward trend of sugar consumption, with closing stocks adequate for domestic use, ethanol production and exports.
Q. What initiatives should be taken at the mill and Government level to increase sugar consumption in India?
A. To boost consumption, coordinated action across industry and policy is recommended:
At the mill/industry level:
• Product diversification into value-added products to sustain the overall demand.
• Collaboration with FMCG and beverage sectors to innovate and market sugar blends that appeal to health-conscious consumers.
• Support for regional marketing campaigns to drive down substitution with informal or unregulated sweeteners.
At the Government level:
• Public health campaigns to balance health messaging with industry growth, and regional demand stimulation initiatives in lower consumption areas.
• Encourage moderate consumption of sugar
• To discourage a sedentary lifestyle
• Discourage artificial sweeteners, citing its negative impact on health.
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Source : Chinimandi
