Nestle (NSRGY) has claimed it has found a way to naturally reduce the sugar content in chocolate bars as food and drinks makers grapple with increased pressure from governments to deal with a growing obesity epidemic.
The maker of Kit Kat, BabyRuth and Butterfinger said late Wednesday that its researchers had discovered a way to structure sugar differently using natural ingredients so that "even when much less is used in chocolate, your tongue perceives an almost identical sweetness to before," the world's largest food and drinks company said.
Nestle said the discovery will enable it to significantly decrease the total sugar in its confectionery products.
"This truly groundbreaking research is inspired by nature and has the potential to reduce total sugar by up to 40% in our confectionery," said Chief Technology Officer Stefan Catsicas in a statement.
The company is in the process of patenting the process and expects to start using the faster-dissolving sugar across a range of products from 2018.
Stock in the Vevey, Switzerland-based company were down 1.6% to Sfr67.23 at 11:05 CET in Zurich. The consumer staple stock has lost 9.26% since the start of the year.
To be sure, the cost of sugar has also skyrocketed in the past year, with the spot price of raw sugar up almost 30% since the beginning of 2016. Raw sugar for March delivery rose 0.8% to close at 19.81 cents a pound on the ICE Futures U.S. exchange Wednesday.
And the trend looks set to continue after Wednesday OPEC production cut deal sent oil prices surging. A rise in the price of oil will generally have a bullish effect on sugar as the commodity producers choose to cover more can to ethanol to take advantage of higher prices.
Food and drinks companies are also feeling pressure by governments to decrease the amount of sugar in their products as rates of obesity rise around the world.
More governments are implementing so-called sugar taxes on companies to combat the epidemic. In March, the U.K. announced from 2018 it will add an extra tax on drinks companies measured on the quantity of sugar-sweetened drinks they produce. This is leading many organizations to reconsider their offerings.