The development of global sweetener products is constantly upgraded around "functionality" and "cost performance". In the future, functional sugar substitutes with high added value will show a differentiated development trend: on the one hand, new sugar substitutes will gradually open the market due to their irreplaceable "functionality", and with the gradual opening of the domestic market will show the characteristics of "small base and fast growth"; On the other hand, mature products will benefit from the trend of sugar reduction, the advantage of "cost performance" is more prominent, the market penetration rate will continue to increase, and the market demand will remain high. The process of the new functional sugar substitute market from 0-1 is expected to bring investment opportunities in the industrial chain. We believe that after the approval of new products represented by aloxone in China and Europe, it will bring considerable potential demand growth. At the same time, due to the longer development time of mature products with sorbitol and maltitol as sugar substitutes, the market will maintain rapid growth under the trend of sugar reduction.

The added functionality of growth products is outstanding, and the improvement of permeability accelerates the market expansion. The products with high functional added value in the early stage of commercialization include sorbitol, maltitol, aloxone, etc. Crystal sorbitol is on the rise, the powder has unique tablet characteristics, and the market is expected to maintain a high growth rate expansion with the increase of downstream permeability. Crystalline maltitol has a thick taste and becomes the best solution for chocolate sugar reduction, and the rise of sugar-free black chocolate in the downstream has pulled the product volume. Alor ketose has developed rapidly in the United States market, Europe and China have been in the approval, although more capacity is under construction, but is expected to have formed a stable shipment of the head enterprise will rely on industrial experience, first enjoy the domestic market dividends, while the policy approval will also accelerate the establishment of domestic downstream brands. It is estimated that the demand for crystalline sorbitol, crystalline maltitol and aloxulose in 2026 will be 797,000 tons, 270,000tons and 66,000 tons, respectively, with a CAGR of 39.4%, 31.4% and 40.7% from 2021 to 2026, respectively.

The supply and demand of traditional mature products are gradually stable, and the cost reduction and efficiency increase and differentiated service have become the main direction. The functional sugar substitute products that have experienced rapid development in China and are relatively mature in the market mainly include erythritol and xylitol. Among them, xylitol has experienced years of competition and elimination, has changed from a high value-added industry to a traditional industry, and the head enterprise has stabilized the market share at low cost to bind the downstream large customers to increase the increment. Erythritol is experiencing a fierce competition stage of oversupply, but the downstream has formed a variety of stable brands, and the penetration rate is still growing, it is expected that after the end of the industry clearance, the market growth rate and pattern will gradually stabilize, the head enterprise will increase the market share through cost advantages, strengthen the binding of large customers through differentiated services. It is expected that the demand for erythritol and crystalline xylitol in 2026 will be 393,000 tons and 167,000 tons, respectively, with a CAGR of 22.9% and 6.3% from 2021 to 2026, respectively.

Commercial high potential products focus on safety and health, or will become the mainstream of the next generation of functional sugar substitutes with good commercial prospects, including sugarcane polyphenols, soma sweet protein, honey polyphenols, Edwansweet. Sugarcane polyphenols and honey polyphenols come from natural extracts, which are natural and safe and have a variety of health effects. Soma sweet protein is a protein that is absorbed and decomposed into amino acids by the human body, and will not cause blood sugar fluctuations. With the breakthrough of the raw material limit, the profit space will gradually expand, or it will become the next sugar replacement star. Edwansweet is a new generation of artificial sugar substitute, outstanding performance and safety advantages, or will become the next high sugar mainstream.