Acesulfame-K

Acesulfame-K Global Market Outlook:

• The global HIS market is expected to grow at an average rate of 5.3 percent between 2023 and 2026, driven by increasing consumer awareness, cost-effective substitution, and continuous availability. The Ace-K market is estimated to be valued at about $0.025 billion with a CAGR of about 5.3 percent between 2023 and 2029

• Growth in demand is expected to be high in the Asia Pacific. China, India, and Australia will drive the demand for HIS, especially in the beverage industry

Acesulfame-K Cost Structure Analysis

• Consolidated buying of HIS from two to three suppliers can benefit the buyers in the long run, owing to indirect cost and high consumables cost.

• Raw material is the major cost driver, amounting to 43 percent of the total cost of production. Sucrose contributes about 14 percent to the total cost of production of sucralose

• Raw material cost contributes to 77 percent to the total cost of production of aspartame. Fluctuation in the prices of raw materials by ±10 percent has an impact on the production cost of aspartame by ±9 percent

• The production cost of acesulfame potassium is driven by the raw material and consumable costs. They contribute about 48 percent and 44 percent to the production cost, respectively

Global Acesulfame-K Production and Market Size

• The Acesulfame potassium sweetener market is estimated to be valued at about $0.025 Billion in 2023 and is projected to grow at a CAGR of 5.3 percent between 2023 and 2029. China accounts for about 70 percent of the global Ace-K production. Niutang, Celanese, Anhui Jinghe, Stadt Holdings Corporation, HYET Sweet, Suzhou Hope are the leading producers. The sweeteners’ effective blending property in soft drinks and heat stability are expected to drive its market.

• China and the US are the major producers of Acesulfame Potassium, a HIS, which is mostly used in the beverages industry in combination with aspartame or sucralose

• China is the major producer in the world, producing ~70 percent of the total global acesulfame-K, and is also a leading exporter

Porter's Analysis on Acesulfame-K

Supplier Power

• Few large manufacturers of sweeteners are vertically integrated for raw material supply

• In contrast, sucralose manufacturers source their raw material (sugar) externally

• Sugar supplied for sucralose production is almost negligible compared to revenue of suppliers coming from other direct end-uses for sugar

Barriers to New Entrants

• Small manufacturers can enter the artificial sweeteners market in China, however, with a small capacity

• Initial investments in setting up and R&D are high, however, the break-even can be achieved in a short period, considering the strong demand for these sweeteners

• It will be challenging for small entrants to sell to large buyers, as large buyers prefer well-established suppliers

Intensity of Rivalry

• Large suppliers are facing a significant threat from smaller suppliers selling at low cost

• Innovations and investments on R&D among large suppliers are high

• At the moment, the sweeteners market is facing an over-supply situation with new suppliers entering the market in China

• Government regulation on environmental policies is a major threat to producers in the country

Threat of Substitutes

• Different artificial sweeteners are substitutes for each other

• Sugar is always one of the best substitutes to artificial sweeteners

• At present, natural sweetener, stevia, is possessing a strong substitute threat, as consumers are becoming more health conscious and shifting toward natural products

Buyer Power

• Artificial sweeteners are procured by large buyers predominantly from the beverage industry. Coca-Cola and PepsiCo occupy a major share in this
  industry

• Different artificial sweeteners are substitutes for each other, however, complexities involved in switching are high

• Large buyers prefer large suppliers to ensure best quality. China dominates the sweeteners supply with a large fragmented supplier base