With rising health and wellness demand among Chinese consumers seeking sugar-free beverages, while at the same time not compromising on taste, the sweetener industry is entering a new phase of growth and transformation. Once dominated by erythritol, the market is now eyeing allulose as the next potential blockbuster product.
Meanwhile, the government under The Healthy China Initiative (2019–2030) has set clear dietary goals. By 2030, the average daily intake of added sugar per person should not exceed 25g. With consumers paying closer attention to sugar intake, demand for sugar alternatives has surged. Research showed that 75% of Chinese beverage consumers now choose sugar-free products for health reasons.
The sugar-free beverage market in China has crossed Rmb 40 billion (US$5.62 billion) in 2023 and is expected to reach Rmb 60 billion ($8.43 billion) by 2025. China already dominates global supply of sweeteners, accounting for 75% of the world’s production.
Erythritol has been at the center of the sugar-free wave. Known for its safety, zero calories, and stability in food applications, the sweetener gained massive popularity in 2021, thanks to the success of Genki Forest’s sugar-free sparkling water.
The rush in demand led to a rapid capacity build-out. By May 2023, China’s annual erythritol production capacity soared to 380,000 tons, well beyond global demand. This oversupply triggered a fierce price war, with prices plunging from Rmb 40,000 (US$5,620) per ton to under Rmb 10,000 (US$1,405). Producers go through a painful period witnessing massive downturns in their revenues. By 2024, however, the market started to stabilize as weaker players cut capacity or shifted to other businesses.
Currently, the industry is settling into a more sustainable phase with prices more or less stabilised around Rmb 10,000-13,000 per ton. Producers are now more focusing on efficiency, purity, and downstream applications. Thanks to its diversified applications—in food, beverages, supplements, oral care, and even cosmetics—erythritol is expected to remain a staple in the sugar-free industry. Partnerships with global names including Coca-Cola, Nestle, Unilever, and BASF further cement its role.
While this industry stabilizes, market players are betting big on allulose, a rare natural sugar that tastes almost like sucrose but with just 10% of the calories. It also does not raise blood sugar levels, making it particularly attractive for diabetics and consumers managing their weight.
On 2 July 2025, China’s National Health Commission formally approved allulose as a food ingredient, a green light that analysts believe could unleash a new wave of demand.
Major producers are pumping new investments in allulose. Baolingbao boosted its annual allulose capacity to 5,000 tons in 2024 and announced a 20,000-ton expansion earlier this year. Sanyuan Biotech is doubling its production to 20,000 tons, while Dongxiao Biotech expects to launch its first allulose products before end-2025.
The global market for allulose is still small at US$173 million in 2023, however it is growing rapidly at 33% CAGR since 2019. By 2030, this industry is expected to cross US$545 million, fueled by broader
regulatory approvals and rising consumer acceptance.
In the past, allulose was prohibitively expensive due to low production efficiency. However, with improving technology, costs are falling although it is still more costly to produce than erythritol. To reduce costs further will be one of the next challenges that Chinese producers need to take in order to make allulose broadly accepted.
