Sweet Future

A key trend affecting the global market for sweeteners is the growing importance of products containing stevia, a shrub herb native to parts of South America whose awareness levels were boosted signifi cantly by its approval for use in food manufacturing in the United States during 2008. The EU followed suit at the end of 2011, although it should be highlighted that stevia had already received a two year regulatory clearance in France in 2009. In 2012, the global market for stevia surpassed $300 million in value for the fi rst time, standing at $304 million and with total volume at 4,100 tonnes. According to several industry sources, stevia extracts could potentially penetrate up to 25% of the world sugar market. Global sugar consumption experienced fl at growth from 2008 to 2011, with consumption volume at 160 million tonnes, due to extremely volatile world market prices as well as some lingering impacts of the 2008/09 global recession.

Global sugar demand growth prospects were also impacted by the rising rates in obesity and diabetes and a growing consumer aversion to sugar on health grounds. These factors should have boosted the worldwide development of stevia.

Nevertheless, the global market for stevia extracts witnessed a slight lull during 2011-2013.

In fact, the market grew rapidly between 2008 (US approval) and the beginning of 2011, when it saw a dip in its swift development due to several factors. Historic market leader PureCircle had to scale back its production, while reporting a 12% decline in value sales, which were attributed to delays in EU approval as well as the launch of major CSDs applications, combined with estimated inventory at large beverage accounts.

Canadian manufacturer GLG posted a disastrous performance, with value sales down 71% on 2010. Then third-ranked Sunwin also posted a drop in volumes and sales revenues as it invested in upgrading its facilities. Moreover, an ongoing supply excess has pushed stevia prices down since 2011, with inventories purchased in the past by major CSDs companies still to be completely depleted albeit, according to industry sources, this is expected to happen by mid-2014. Globally, more than 1,000 product launches containing stevia have occurred across a range of different food categories over the past year. In 2013, non-alcoholic beverages, snacks and table top sweeteners were the categories where the majority of product launches have happened, followed by dairy products, candy and gum, sauces, chocolate, dessert, and ice cream. This demonstrates that stevia is a very versatile ingredient which is successfully used as a source of sweetness in an array of food and beverages applications.

While stevia as a lone sweetener did not boom as some suppliers hoped, it has experienced growing success as a “co-star” with sugar and other natural sweeteners. A former senior executive at a major US-based stevia supplier highlighted that “blending all-natural stevia extracts with other forms of sugar, such as fructose or sucrose, helps to create excellent tasting products. Food and beverage manufacturers who target this mid-calorie segment have been successful… since consumers get an allnatural, great tasting and ‘good-for-you’ product that also has fewer calories”.

It remains to be seen whether initial projections on the growth of the demand for stevia-based sweeteners live up to reality. According to Zenith International proprietary information, the global market for stevia is forecasted to reach $490 million in value by 2016, with volume sales up to 6,250 tonnes.

In order to face the increasing demand, key players like PureCircle have secured successful stevia cultivation and sourcing operations in countries such as Paraguay, Kenya and the United States. Specifically, PureCircle’s Kenya subsidiary serves as a strategic hub to supply the EMEA region and has provided ideal growing conditions for proprietary varieties of stevia. According to Vice President for Global Marketing and Innovation Jason Hecker, with PureCircle’s next generation of stevia sweeteners and natural flavours brought together alone or in combinations under the Stevia 3.0 concept, “we are going to start to see more products launching in the 40% and 50% reduction camp. For some customers it’s about positioning, but for others it’s about applications. We found we needed to go beyond Rebaudioside A.