PureCircle-S&W Seed deal aims to scale up domestic stevia supply

01-Aug-2010 - Last updated on 02-Aug-2010 at 07:23 GMT

PureCircle has said it is a step closer to providing US-grown stevia on a scale necessary to meet growing demand from American food and beverage companies, as it signed a five-year deal with S&W Seed Company on Thursday.

The financial details of the deal are confidential, but the companies said it provides for PureCircle to buy stevia from California-based S&W and its subsidiary Stevia California, and provides a “strong commercial incentive” for S&W to accelerate Californian stevia production. It expands on the companies’ existing agreement in which S&W is trialing PureCircle varietals in the state.

S&W said it anticipates supplying PureCircle with at least 1000 metric tons (2.2 million pounds) of stevia leaf within the first two years of the agreement.

Currently, PureCircle sources its stevia from fields in China, Thailand, Paraguay, Kenya and Indonesia. However, the company’s biggest market for stevia-derived sweeteners, particularly Reb A, is the United States. As manufacturers have started to introduce foods and beverages containing the sweetener over the past couple of years, the expectation is that US growth will continue.

CEO and Managing Director of PureCircle Magomet Malsagov said: "The signing of this agreement signals our commitment to keep stevia leaf production as close to our end markets as possible, reducing the energy footprint of the industry and supporting the sustainability of stevia growers. This complements our much more extensive efforts in Paraguay and Kenya."

The deal will also provide support for PureCircle’s R&D agreement with horticultural researchers at Michigan State University. That partnership, entered into in April, aims to produce new stevia plant varieties with higher concentrations of Reb A, while trying to gain a better understanding of all of stevia’s sweet components.

S&W said California’s Central Valley is an excellent “test bed” for perfecting cultivation of stevia in the United States.

“In addition, as techniques and superior varieties are confirmed, the large acreage available through S&W's grower base should make rapid expansion of stevia possible,” the company said.

US food and beverage manufacturers have been rushing to launch products that incorporate the natural, zero-calorie sweetener since the Food and Drug Administration (FDA) issued its first letters saying the stevia-derived sweetener rebaudioside A, or Reb A, was generally recognized as safe (GRAS) in December 2008. Reb A is thought to be the sweetest component of the stevia leaf, among its other sweet elements, called steviol glycosides.