Overview
Stevia extracts have the potential to be the “holy grail of sweeteners.” They deliver on two key attributes that are highly important to consumers — 100% natural and without calories.
Originally from Paraguay, stevia leaf has been valued for centuries because of its sweetening properties and has been used as an approved sweetener in Japan and Korea for decades. The high intensity sweetener offers a sweetening power some three hundred times that of table sugar without adding any calories and having a low (nearly zero) glycemic index making it safe for diabetics.
The turning point for Stevia to become a mainstream sweetener came in 2008 when steviol glycosides, the sweetening components of the leaf, were deemed to be safe and Rebaudioside A, one particular steviol glycoside, was granted GRAS (Generally Recognized as Safe) status by the US Food and Drug Administration following applications by Cargill and Merisant. Since then, approval by legislators across the world has opened the door to new formulations and reformulations of foods and beverages with zero or reduced calorie content. Stevia’s status as a global ingredient was secured with its incorporation into leading soft drinks brands manufactured by Coca-Cola and PepsiCo in 2009.
Recent Stevia Adopters
Stevia has enjoyed a meteoric rise in popularity on the global stage over the past four years with products launched across thirty-five countries in 2010. Within two years of the USA market opening, Nielsen based retail consumption data indicated almost a billion US dollars of retail sales while market research group, Mintel, has said it expects sales of stevia sweetened products to top US $2 billion in 2011. U.K. based Zenith International estimates worldwide sales of Stevia extract reached 3,500 tons in 2010 with an overall market value of $285 million and is forecasting that the global market for Stevia will reach 11,000 tons by 2014 requiring the tripling of Stevia leaf production at the farm level to keep pace with consumer demand.
The industry is segmented into three main business processes:
- Plant Breeding and Farming
- Extraction and Purification
- Product Formulation and Marketing
Considerable investment of several hundred million dollars have been made into the Extraction and Purification processes over the past decade to develop the technology and meet the requirements to achieve GRAS status and capacity has been built to handle the expected volume through 2014.
Within the extraction and purification sector there are two clear industry leaders, PureCircle Ltd and GLG Life Tech, which together have a commanding share of the Stevia market and between them supply Coca Cola and PepsiCo. PureCircle is the clear leader of high purity Stevia supplying more than 90% of the US market excluding the table top sweetener category.
With several hundred products launched across 38 categories and 35 countries, there is active development in product formulation and marketing and considerable advances are being made in new product formulations and flavoring enhancements and there are many opportunities for improvements.
The production of leaf (farming) has been highly overlooked to date and with nearly eighty percent of the cost of refined Stevia being composed of the leaf cost, there remains considerable opportunity to build value in the supply chain by focusing on Stevia agronomics.
The Stevia genus includes more than 100 species and different species of Stevia contain sweet compounds. But only two species contain steviol glycosides and the variety with the sweetest compounds is Stevia Rebaudiana Bertoni. Almost all commercial growing of Stevia has occurred in China because of the traditional Japanese and Korean market. Now with the global market demand for high TSG (Total Steviol Glycoside) and high Reb-A (Rebaudioside A) producing plants, there is a huge demand for agronomic and farm management expertise to establish new plantations and rapidly scale leaf production.
