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Is stevia’s market potential limited by cost?

By Caroline Scott-Thomas , 22-Apr-2009
Last updated the 23-Apr-2009 at 15:58 GMT

Stevia’s expense compared to other sweeteners is a major market limitation, according to a new paper on the stevia market, although industry players say they are working to bring its price down.

There has been much excitement about the promise of stevia as a natural alternative to artificial zero-calorie sweeteners, particularly since the FDA issued its non-objection in December that the stevia-derived sweetener Reb A is generally recognized as safe (GRAS) as a food additive. That decision led to a spate of Reb A-sweetened product releases, including ones from beverage titans PepsiCo and Coca-Cola.

The paper, from business research organization KnowGenix, said: “There are several limitations to the growth of stevia markets. The key ones relate to economics as stevia products are currently more expensive than other high-intensity sweetener products.”

This is a view supported by California-based sucralose distributor ISI. The company’s director of sales and marketing Bassam Faress told FoodNavigator-USA.com: “Of course stevia is a challenge. But there’s such a difference in price that we’re not really worried.”

However, he added that prices for both stevia-derived sweeteners and sucralose vary so widely between manufacturers that it is difficult to pinpoint exactly how big the price difference is.

Head of international marketing at PureCircle Angus Flood would not disclose the price of the company’s PureVia-brand Reb A but said: “The PureCircle view is that we aim to optimize value in use, which isn’t just about cost reduction…We are committed to providing this as a mainstream ingredient.”

He added that part of bringing it into the mainstream does involve trying to lower its price in relation to other sweeteners.

“The main thing is scale,” he said. “It’s that common business principle: The more you sell, the cheaper it becomes to manufacturers. It’s all about building scale and availability…We understand that if we can respond to – and drive – market demand, that will bring the price down.”

Other challenges

The KnowGenix paper added that there are also challenges for stevia in terms of finished product consistency and its reported “distinct aftertaste”, although there has been concerted effort from various companies to eliminate these effects.

Several major flavor companies, for instance, including Givaudan, Comax and Symrise, have developed ranges of bitter blockers, flavor maskers and sweetness enhancers specifically for use with stevia.

The paper, entitled Stevia as an Alternative Sweetener – Promise and Challenges, was prepared by KnowGenix in collaboration with the Center for Management Technology ahead of CMT’s Stevia World Conference, due to take place on May 14 and 15 in Shanghai, China.

The paper covers the entire stevia sweeteners market, not only high-purity Reb A.

The researchers have said they are seeking industry feedback on the paper, which is available via www.cmtevents.com .

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