The Huge Problem With Swapping Out Your Cake's Cane Sugar For A Different Sweetener - Tasting Table
Briefly

Cane sugar plays a vital role in cake baking by providing moisture, promoting browning, and enhancing tenderness. It binds ingredients together, preventing dryness, and aids leavening by aerating butter during the creaming process. Artificial sweeteners typically lack these properties, resulting in poorly textured cakes that may not rise properly. For healthier alternatives, coconut sugar can be substituted for cane sugar, though it alters the cake's flavor profile. Success with substitutes requires understanding their functional differences compared to cane sugar.
"Sugar helps with moisture, browning, and tenderness of our baked goods. It binds ingredients together, without drying them out."
"Some [artificial sweeteners] don't caramelize or retain moisture, so your cake might turn out dry or not rise properly."
Read at Tasting Table
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