Cutting 80% sugar with a multi-ingredient formula: ‘Unlike current sugar substitutes, there is no compromise on taste’

By Flora Southey

- Last updated on GMT

The Israeli start-up is developing a 'natural' sugar replacement with 'no compromise' for the food and beverage industry. GettyImages/cagkansayin
The Israeli start-up is developing a 'natural' sugar replacement with 'no compromise' for the food and beverage industry. GettyImages/cagkansayin

Related tags sugar reduction reformulation Sugar start-up israel

Meet Sweet Balance: the Israeli start-up developing customisable ‘building block’ sugar substitutes for the food and beverage industry.

Excessive sugar consumption is recognised as a major risk factor by public health authorities. Less than 5% of daily energy intake should come from added sugars, according to the World Health Organization (WHO).

Increasingly, policymakers are encouraging food manufacturers to limit sugar content in food formulation. In the UK for example, new HFSS legislation – targeting foods high in fat, sugar and/or salt – came into force this month.

Elsewhere, across Europe and South America, the implementation of nutrition labelling schemes is also inciting food reformulators to cut sugar content, amongst other problem nutrients.

Yet reducing sugar in food and beverage presents a ‘big business risk’, according to entrepreneur Yoav Dagan. Replacing conventional sugar with artificial sweeteners  may concern consumers – as they do some researchers​ – and Dagan is not convinced current sugar alternatives are up to scratch.

“Current alternatives, both in the field of natural sweeteners and artificial sweeteners, compromise on taste,” ​he told FoodNavigator. “We know that consumers say health is very important to them. But in reality, they are not willing to give up indulgence and taste for the benefit for their health.”

After more than 16 years working at Cocoa-Cola Israel, including more than 11 years as vice-president, business development and strategy, Dagan said he ‘understands the pain’ from an industry perspective.

“The pain is that there is a lack of no-compromise, natural sugar replacement products on the market that can fit the most challenging food and beverage applications.”

Dagan is now at the helm of Sweet Balance, an Israeli start-up developing just that: a B2B ‘natural’ sugar alternative for the food and beverage industry.

‘All natural’ ingredients, no high-intensity sweeteners

Sweet Balance’s alternative sugar offering is the result of IP-protected research conducted by founder and CTO Dr Danny Dizer, whose wife is diabetic. Discovering that good-tasting, sweet foods with a low glycaemic index was hard to find, he set about developing his own. 

The formula is dependent on ‘several building blocks’, as opposed to one single ingredient. Being a customised offering, the same ‘building blocks’ are used in every application. These ingredients, explained co-founder and CEO Dagan, provide the ‘body’ and ‘sweetness’ of the formula.

“They make sure there is no aftertaste and offer properties that are sometimes lacking in sugar replacements.”

Additional ingredients are then added according to the need, explained Dagan. “Our approach is a little different to what is common in the industry. Usually, you will have a sugar replacement – a natural or unnatural sweetener – with a ‘one-size-fits-all’ approach.”

Sweet Balance does not agree with this strategy. “We make custom-made sugar replacement products. That means that according to the application, our customers’ brief and product characteristics, we will build the formula that gives the best performance.”

less sugar mediaphotos
Swapping out sugar for Sweet Balance’s formulation won’t add an excessive number of ingredients to the product’s label back-of-pack, suggested CEO Yoav Dagan. GettyImages/mediaphotos

The CEO was hesitant to reveal exactly which products Sweet Balance is including in its sugar substitute, but did stress they are ‘all natural’, and all ‘low intensity’ in sweetness profile. “We don’t use any high intensity sweeteners.”

All ingredients are ‘well known’ within the industry, he continued, and have a low glycaemic index. The invention, and the reason for Sweet Balance’s IP protection, lies in how it combines these ingredients and understands their benefit to food and beverage formulation.

“We have a clean label, meaning there are no E-numbers,” ​continued the CEO.

Dagan also suggested that swapping out sugar for Sweet Balance’s formulation won’t add an excessive number of ingredients to the product’s label back-of-pack. Often, companies will be using these ingredients already, so just one or two extra ingredients may be added. Occasionally more, but ‘that’s not common’.

Achieving up to 80% sugar reduction

Sweet Balance claims its ‘building block’ formula – available in either liquid or powder formats – can achieve up to 80% sugar reduction.

“We can work with liquids or solids. We work in hot products, we can work in cold products, such as ice cream. Room temperature is no problem, so we can work in the bakery category. We work in a wide area of applications,” ​explained the CEO.

To achieve an 80% sugar reduction, Sweet Balance will co-develop an offering containing 20% sugar. But sometimes food and beverage manufacturers are not looking to reduce their sugar content to such a dramatic extent. If a customer wants to reduce by 50-60%, then the final formulation will contain some percentage of sucrose too.

“But if we remove all sucrose, the final product will have achieved an 80% reduction,” ​Dagan told this publication.

sugar ShaunWilkinson
Sweet Balance claims its ‘building block’ formula – available in either liquid or powder formats – can achieve up to 80% sugar reduction. GettyImages/ShaunWilkinson

Conventional sugar adds more than just sweetness to a finished product, however. Sugar imparts sensory properties as well, including weight, mouthfeel, and body. It also acts as a binder and bulking agent.

Sweet Balance’s sugar substitute hits the mark on all aspects, we were told. Mouthfeel, in particular, is something that can be lost when dramatically cutting sugar from food formulation, suggested Dagan.

“Our solution is even beneficial to plant-based dairy products. Typically, when you reduce 80% of the sugar, it’s missing the mouthfeel you get with sugar. Adding mouthfeel is a very strong feature of our formulation.”

Paying a premium for health

A major advantage of using conventional sugar in food and beverage formulation is its price tag: sugar is cheap because of the two, low-cost plants that contain a lot of it – sugar cane and sugar beet.

Sweet Balance understands that to disrupt the sugar alternatives market, both product and commercial feasibility are required. But Dagan acknowledges Sweet Balance’s offerings will ‘never be as cheap as sugar’.

Nor does he believe it should be. From an industry perspective, any sugar taxes or levies placed on sugar-sweetened beverages would be higher than the ‘incremental’ cost of swapping out sugar for Sweet Balance, he argues.

At the same time, businesses will be able to charge a premium for sugar reduced, tasty products, suggested the CEO. The incremental cost is ‘very small’ compared to the potential premium on price, meaning businesses can even increase their profitability.

And finally, research suggests there are ‘many’ categories for which consumers are willing to pay a premium. Sugar-reduced children’s cereal is one such category, said Dagan.

breakfast cereal Hybrid Images
Research suggests there are ‘many’ categories for which consumers are willing to pay a premium, such as children's breakfast cereals, we were told. GettyImages/Hybrid Images

Sweet Balance has almost completed its first year of the Fresh-Start food incubator programme in northern Israel, operated by food major Tnuva, beverage company Tempo, agro-food VC Finistere Ventures and funding platform OurCrowd.

Within the next few months, the start-up plans to be manufacturing at commercial scale, and expects to launch first products on to the Israeli market by 2023, before expanding globally in 2024.


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