Stevia’s sweet spot to get bigger

Posted by Daniel Palmer on 10th September 2009

A natural sweetener made from the stevia plant could have a major impact in the food and beverage market. The plant-based sugar substitute is increasingly being used by food and beverage companies – including the likes of Coca-Cola and PepsiCo, and should continue to gain market share, according to a Rabobank report: Stevia and the U.S. Market.

For hundreds of years, the stevia plant has been used as a sweetener in Paraguay, South America. The stevia plant extract which tastes the most like sugar is called Reb A (steviol glycoside rebaudioside A). In December 2008, the Food and Drug Administration approved Reb A as a food additive in the United States leading to the introduction of drinks from The Coca-Cola Company and PepsiCo.

Stevia

All-natural sweetener
Since its U.S. approval, interest in the sweetener has surged, and is being used in products such as fruit juices, enhanced waters and carbonated soft drinks. Reb A would allow food and beverage companies to develop natural, low-calorie products made without artificial sweeteners.

“Because stevia-based sweeteners are plant derived and naturally occurring, they can be incorporated into products with all-natural claims. To date, no other commercially available high intensity sweetener can fill this gap,” Rabobank analyst Stephen Rannekleiv explained.

Advantages and challenges
Reb A is increasingly being used in food and beverage applications, and can be expected to continue to gain market share, the report contended. Reb A is heat, light and pH stable and can be used in applications where other sweeteners cannot. Reb A’s ability to be used in products claiming all-natural is a key point with consumers.

“Consumer concerns regarding obesity and the growing demand for all-natural products bode well for Reb A to quickly gain market share,” Rannekleiv suggested. “While success seems imminent, and we expect annual U.S. sales of Reb A to reach approximately $700 million within 5 years, numerous hurdles must still be overcome.”

It is still unclear how broadly consumers will embrace the product, given some of the challenges related to price and flavour. Reb A alone does not provide enough sweetness for some soft drinks. And, Reb A cannot be combined with other non-caloric sweeteners to reach full sweetness while maintaining the all-natural claim.

Stevia also received approval of FSANZ in Australia last year and France has recently become the first EU state to approve the sweetener.

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