SUBSCRIBE

Breaking News on Food & Beverage Development - North AmericaEU edition | Asian edition

News > Suppliers

Read more breaking news

 

 

PureCircle could be winner in Pepsi v Coca-Cola stevia wars

By Sarah Hills , 06-Aug-2008

As both PepsiCo and Coca-Cola gear up to launch beverages sweetened with stevia, it could be that their common supplier, PureCircle, is the real winner in the race to be first to market.

PureCircle, a Malaysian company has just signed long-term contracts to supply PepsiCo and its partner the Whole Earth Sweetener Company with its all-natural, zero-calorie sweetener, Reb-A, under the PureVia brand. In addition, it has been granted an exclusive license to market Reb-A as PureVia as long as there is no conflict of interest, according to Peter Milsted, sales and marketing director at PureCircle.

This is on top of PureCircle’s contract to supply Cargill, which teamed up with Coca-Cola to develop their own stevia-derived product called Truvia in response to strong consumer demand for low-calorie products.

The beverage giants are preparing to launch drinks sweetened with stevia, which is permitted for sale in the US as a dietary supplement on the basis of its low glycemic index, but is yet to be generally recognized as safe (GRAS) by the US Food and Drug Administration (FDA) for use in beverages.

However, Milsted told FoodNavigator-USA.com: “We are absolutely assuming that this product will be free to use in the USA from here on in.

“We supply high purity Reb-A both to Cargill and to PepsiCo. We started off with an exclusive contact with Cargill. That ended a few weeks ago. We have extended the contract for a further length of time on a non-exclusive basis.

He explained that it had been the company’s strategy initial to be a “market maker as oppose to being part of somebody’s supply chain”.

Milsted said that Cargill was happy to accept the change in contract as long as it was assured of continued supply, which reflected PureCircle’s ability to “supply consistently and at serious volumes”.

Likewise, he claimed that PepsiCo was happy for PureVia to be exploited as widely as it can, as long as it wasn’t used in areas of competition, such as similar drinks.

And he predicts that other companies will follow their lead and use Reb-A as a sweetener.

Milsted said: “We aim to carry on and make the investments that we have made already in our supply chain and are continuing to make, and that they lead to large contracts with large suppliers.

“We are talking pretty much with every food and beverage manufacturer that anybody has every heard of and the interest is strong and genuine.”

Supply volumes

In November PureCircle said it would float on London's AIM in a bid to raise $50m to expand Reb-A (Rebaudioside-A) sweetener production and secure an advantage in anticipation of an explosion in demand.

The company said at the time that global annual consumption of sugar and all other sweeteners was an estimated 150m tonnes. PureCircle's Reb-A accounted for just 0.2 per cent of this volume (0.3m tonnes).

The company owned a 55 per cent stake in a subsidiary called Ganzhou Julong, which is involved in large-scale stevia plantation and production of crude extracts. PureCircle believed its capacity for crude stevia extraction was the largest in the world at 1000 tonnes of crude extract are produced per annum.

By the end of this year it predicted that it would increase this to 3000 tonnes per annum.

Stevia market

Reb-A is the sweetest, purest part of the leaf from the South American stevia plant, which is approximately 200 times as sweet as sugar.

The US market for stevia is estimated to be worth about $60m, a figure analysts say could triple if FDA GRAS is granted. Currently the biggest markets for stevia are Japan and Korea.

Whole Earth, a subsidiary of Merisant Company, has submitted a notification and supporting scientific data to the US Food and Drug Administration (FDA) that PureVia is generally recognized as safe (GRAS) for use in beverages, foods and tabletop sweeteners.

The US's largest supplier of stevia, Wisdom Natural Brands, announced in June that it is launching the natural sweetener beyond the dietary supplements aisle for the first time, after having self-affirmed its version of stevia - Sweet Leaf - as GRAS. It said at the time that the ingredient will be available in a soda or food products by the year’s end.

Coca-Cola and Cargill also recently published science backing their ingredient, Truvia.

Last week PepsiCo told FoodNavigator-USA.com that it would prefer to wait for FDA approval before bringing PureVia to consumers in the United States. But it will debut in a new nutritionally enhanced PepsiCo beverage called SoBe Life, to be launched in Latin America, starting with Peru next month. It will then be rolled out globally.

Key Industry Events

 

Access all events listing

Our events, Events from partners...