‘It’s a dumpster fire…’ Firms report ‘unprecedented shortage and increased costs and lead times’ for erythritol, allulose

By Elaine Watson contact

- Last updated on GMT

"Rapid demand growth coupled with highly disrupted supply chains post-COVID has led to a very tight market" for erythritol, says Cargill. Picture credit: GettyImages-adrian825
"Rapid demand growth coupled with highly disrupted supply chains post-COVID has led to a very tight market" for erythritol, says Cargill. Picture credit: GettyImages-adrian825

Related tags: erythritol, allulose, Sweeteners, Hershey, Ingredion, Cargill, Pyure Brands, Corn syrup, Corn

A combination of supply chain disruptions and surging demand for sugar alternatives has created a very tight market for selected specialty sweeteners - notably erythritol and crystalline allulose – with some firms reporting shortages, longer lead times, and higher prices, although key producers say they are working hard to increase capacity and shore up supplies.

Rare sugar allulose - which is found naturally in a variety of plants, but is produced commercially via a multi-step process typically starting with corn starch - has gained significant traction over the past year, with some high-profile brands from Chobani to Kellogg’s using the low-cal sweetener in new launches.​ 

However, there are only a handful of producers, including Tate & Lyle​​​;  Ingredion/Matsutani​​​; Korean firms CJ CheilJedang​​​ and Samyang Corp​​​; and Chinese firms (where products coming into the US are subject to a hefty tariff) including Shandong Bailong Chuangyuan Bio-Tech Co., Ltd​​​ and Shandong Baolingbao Biotechnology Co., ltd​​​ with supplies of crystalline allulose in particularly short supply.

One industry source told us this week: “We have plenty of allulose syrup, but as far as crystalline goes, that market has totally dried up… It has been a dumpster fire and looks like it will continue to be for the next 4-6 months.”

Tate & Lyle: ‘We aim to produce more, as quickly as we can’

Tate & Lyle, which manufactures liquid and crystalline allulose from its site in Loudon, Tennessee, told us this week that, “Due to the huge current demand, we are only making firm commitments to customers when we can commit to reliable supply – this timing differs for liquid and crystalline.”

Abigail Storms, global head of sweeteners, said: “We have increased our production of allulose syrup and are working actively with numerous customers to formulate with our ingredient. Our syrup in particular provides a very clean taste profile and is being used in beverages, dairy, confectionery, and nutrition bars as well as many other successful launches.

“Right now we are working hard to meet the continued current huge demand for our DOLCIA PRIMA​ ​crystalline allulose and aim to produce more, as quickly as we can. We will let our customers know as soon as we have determined the next production window.”

She added: "We are evaluating our existing network as well as future options as the market demand grows.”

Allulose applications

Found naturally in plants such as figs and raisins, allulose is produced on a commercial scale via a complex, multi-step process typically starting with corn starch, and is in high demand because it has 70% of the sweetness of sucrose but only 0.4 calories per gram (compared with 4 calories per gram for sucrose).

While allulose still counts as ‘carbs’ on food labels, it is metabolized differently than table sugar, and ​​doesn’t raise blood glucose or insulin​​​, making it a potentially attractive sweetener for consumers watching their blood sugar. 

Allulose is used in a growing number of products including Chobani Zero, selected Kashi Go cereals, Smart Sweets, Nick's and Magic Spoon.

Picture credits:​ Chobani, Nick's Ice Cream, Kashi, Smart Sweets, Magic Spoon

Erythritol: ‘An unprecedented shortage and increased costs and lead times’

Supplies of erythritol, another bulk sweetener gaining traction as firms seek to reduce or replace sugar, are also incredibly tight right now, said Gregory Drew, VP ingredients and innovation at Pyure Brands​,​ which supplies a range of organic sweeteners, baking mixes and other products featuring stevia and erythritol.

He explained: “Accelerated popularity as a sugar alternative, US tariffs on select Chinese imports, and ongoing pandemic-related challenges and logistical bottlenecks, have caused an unprecedented shortage and increased costs and lead times for erythritol.

“And we do not expect much relief in the foreseeable future.”

'We do not expect much relief in the foreseeable future'

But he noted: “Despite these challenges, Pyure’s decades-long manufacturing partnerships with key erythritol producers remain strong and our ability to serve US food, beverage, and retail markets with erythritol continues with minimal disruption.

“One way we are navigating supply and demand challenges is through CPG SKU rationalization initiatives that allow us to allocate significantly more erythritol to the commercial marketplace for the remainder of 2021 and 2022. We are also actively importing and building inventory on both coasts and engaging supply agreements to meet growth and innovation requirements.”

He added: “It’s not easy, and we are doing our best to support new customer acquisition while serving loyal Pyure customers, retailers and consumers who rely on consistent supply of 3rd party certified erythritol and other high and low intensity sweeteners.”

Icon Foods: ‘It will likely be Q2 2022 before we see any significant stabilization’

Thom King, CEO of Icon Foods​​​​,​ which supplies a wide range of sweeteners used in packaged foods and beverages, told us: “There is not enough corn glucose to support the demand for erythritol,” ​noting that Chinese buyers seeking to replenish hog supplies dented by African swine fever​had been buying up corn, which had pushed up prices.

He also claimed that a large chunk of Chinese erythritol production had been allocated to a beverage startup called Genki Forest​, ​although FoodNavigator-USA has not been able to confirm this.

He added: “These things look like they will be temporary but, it will likely be Q2 2022 before we see any significant stabilization.”

Cargill: ‘Rapid demand growth coupled with highly disrupted supply chains post-COVID has led to a very tight market [for erythritol]’

Juan Rossi, food segment lead for Cargill’s starches, sweeteners & texturizers business in North America, told us that it’s been a challenging year, but that Cargill is “well-positioned” ​to navigate the situation.

“Certainly this year we have seen some complex market dynamics affecting availability,” ​acknowledged Rossi. “Erythritol demand continues to gain momentum globally, fueled by consumer demand for sugar reduction.  Rapid demand growth coupled with highly disrupted supply chains post-COVID has led to a very tight market. 

“Here in North America, we are well positioned to execute on our commitments to customers as a local producer. 

“Looking ahead, we are excited about the future of erythritol as we see it playing an essential role in sugar reduction.  We have made great strides in optimizing our existing production facility and have additional plans underway to address growing domestic and international demand.” 

Ingredion: Business continuity plans

Nate Yates, global platform leader, sugar reduction & specialty sweeteners at Ingredion, added: “The good news is that we offer a variety of solutions and have business continuity plans in place for our customers when situations arise such as this, or extenuating circumstances occur.

“We’re able to offer a portfolio of options and help with reducing sugar and calories while building back bulk.”

Hershey: We're in a good position

A Hershey spokesman told us: “We are in a good position on these ingredients​ [erythritol and maltitol] with coverage to meet our needs for the foreseeable future through our suppliers with whom we have long-term relationships.”

Keto_Pops_Group_Shot

Erythritol occurs naturally in a variety of foods (grapes, pears, watermelon etc) but is made on a commercial scale via fermentation, where a sugar-rich substrate (typically derived from corn), is fermented by a yeast strain to yield erythritol.

Tooth friendly, zero calorie (0.2cals/g), good for diabetics (it doesn’t raise blood sugar), and well-tolerated in the gut (unlike some other polyols); erythritol is about 60-70% as sweet as sugar.

It also blends well with high intensity sweeteners such as stevia and monk fruit and is used in everything from reduced sugar ice cream brands such as Halo Top, to confectionery brands such as Lily's Chocolate, baked goods, beverages such as Bai antioxidant infusions, and table-top sweeteners such as Truvia and Pyure.

A white crystalline, odorless product which rapidly dissolves in water to create a clear, low viscosity, colorless solution, erythritol contributes no calories because it passes through the human body almost unchanged.

Picture credit: Halo Top

u.s.-corn-exports-1
U.S. corn exports to China increased dramatically last year, reaching an all-time high in December 2020 primarily to meet demand for feed from China’s recovering hog-herd, which was hit by the African swine fever in 2018, says the World Economic Forum. Image credit: VisualCapitalist.com

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