Ajinomoto fights to ‘stabilize profitability’ in aspartame after 2012 losses total billions of yen

The Japan-based multinational also revealed recently, within the context of a ‘Roadmap for Business Structure Improvement’, that it hopes to secure US regulatory approval for next-generation sweetener Monatin in 2015. Monatin comprises extracts from South African plant Sclerochiton ilicifolius , described by Cargill scientists in 2012 as “the most potently sweet naturally occurring substances known” , which suggests sales margins for a low or zero calorie high intensity (HI) product will be high. In Ajinomoto’s May 10 full year results announcement, Senior VP Takashi Nagamachi revealed the bad news, and outlined the future strategic direction for the Japan-headquartered multinational's sweeteners business. “Although our retail business section had performed well constantly, our aspartame industrial business plunged into billions of yen in losses due to deterioration in both internal and external environments,” he told investors. Deteriorating market situation Nagamachi admitted that the market situation was deteriorating - the biggest market for aspartame is the US - and said the industrial business structure itself, which was unduly dependent on bulk supply of aspartame, posed challenges. “Therefore, based on a basic policy of shifting from volume and size to value-added business – we will expand value-added business such as the retail business,” he said. “At present, value-added business accounts for about 45% and we plan to increase the ratio to about 60% by fiscal year (FY) 2016.” Nagamachi added: “Besides, we will stabilize the profitability of aspartame for our industrial business section – main actions for that include full contribution of the new technology introduced last year, further reduction in fixed costs at production sites.” Ajinomoto would also consider “streamlining” the scale of its industrial aspartame business, the executive said, by working to the new roadmap referenced above. “We will get profit back on the recovery track in this FY [2013-2014] and achieve positive profit at the earliest possible time under the next medium-term plan, and focus more on added-value business structure,” he added. ‘Sucralose and stevia not impacting aspartame profitability’ Brendan Naulty, senior VP, Nutrition & Health, Ajinomoto North America denied to BeverageDaily.com that other HI sweeteners, such as sucralose and stevia, had hit aspartame’s global profitability. “Sucralose and steviol glycosides are not impacting the profitability of aspartame,” Naulty insisted. “Those sweeteners have their own features and benefits and cost contribution for beverage formulations, which is always higher than using aspartame alone or in combination with other low-calorie sweeteners.” Naulty said that aspartame was “more profitable or less profitable” depending on currency exchange rate fluctuation, as well as supply and demand. “ There has been capacity added to the global market from Chinese producers which exceeds demand. Stabilizing profit of our operations is a responsible action to take as a global supplier,” he added. In his presentation, Nagamachi – alongside discussing plans to strengthen the cost competitiveness of two plants in Japan and Europe – said that Ajinomoto planned to introduce new technology in Japan (a move that had been slated for completion by summer 2012 but delayed) in a bid to reduce costs. “The new technology decreases the use of raw material inputs and that is always helpful to remain competitive and leave a smaller footprint on the planet,” Naulty said. He declined to comment on when Ajinomoto might launch a monatin-based product for use in the beverage space – simply referencing an “active program in this area” , but Nagamachi’s presentation reveals that the firm envisages securing regulatory approval in the US in 2005, and other countries in 2017. Monatin and Advantame: Ajinomoto’s sweet future? Cargill and Ajinomoto have both disclosed, principally via patent filings detailing with novel production methods, sweetener compositions using stereoisomers of monatin, a naturally occurring, HI sweetener for food and beverage use. In a 2004 European patent filing for monatin , Cargill claimed that, unlike some other HI sweeteners, monatin has no bitter metallic, acidic or astringent aftertaste, is more stable than aspartame, cleaner-tasting than saccharin, sweeter than sucralose and lacks the ‘liquorice’ aftertaste associated with stevia-based sweeteners. Moreover, Cargill’s monatin sweetener does not require a phenylalanine warning for patients with phenylketonuria, and is more stable than some existing HI sweeteners. Nagamachi also revealed on May 10 that Ajinomoto hopes to extend regulatory approvals for Advantame – derived from the same amino acids as Aspartame, but around x100 sweeter than its older stable mate ( Alternative Sweeteners, 2012,ed. Lyn O’Brien Nabors) – to Southeast Asia, China and South America in 2013, Japan in 2014 and Europe in 2015 FEMA GRAS-approved in dairy, frozen desserts, beverages and chewing gum, Advantame has general use approval in Australia/New Zealand and the EU, and is currently under review by the US Food & Drug Administration (FDA) for dry use applications . You can read today's other special edition stories on beverage sweetener innovation here: Mid-calorie soft drink success rests on tackling stevia aftertaste issues: Analyst Beverage launches driving stevia-sweetened product growth: PureCircle Monk fruit makes headway…but still faces aftertaste issues: Mintel Sucralose and stevia steal sweetening show for US beverage developer

Ajinomoto fights to ‘stabilize profitability’ in aspartame after 2012 losses total billions of yen

Ajinomoto’s industrial aspartame business lost billions of yen in 2012, but the company’s Senior VP for North America tells BeverageDaily.com it is working hard to ‘stabilize profitability’.

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Sucralose and stevia steal sweetening show for US beverage developer