After stevia producer PureCircle today (19 September) reported an annual loss, industry observers may question whether the alternative sweetener is living up to the hype.

Natural sweeteners derived from stevia plants burst onto the scene in late 2008, when the US Food and Drug Administration cleared the use of several ranges. The French government cleared the use of stevia for food and drink products in the country on a temporary basis a year later while the EU scrutinised the ingredient. In April this year, the EU’s Standing Committee on Food Chain and Animal Health voted to recommend the use of stevia as an ingredient in food and beverages. The EU is expected to give its formal approval to the use of stevia across its 27 member states before the end of the year.

Stevia suppliers like PureCircle and GLG Life Tech have invested heavily in production and product development and food and drink manufacturers are starting to sell products containing the sweetener in markets like the US and France. The pull of consumer demand for diet or low-sugar foods, as well as natural ingredients, has generated strong interest in stevia from manufacturers.

But the future for stevia does not look entirely sweet.

PureCircle’s full-year results this morning (19 September) tell a different story from those who have likened stevia to the ‘Holy Grail’ of sweeteners. The company swung into the red for its full-year, after deciding to reduce production until inventories are “better aligned with current market demand”.

It looks as though the stevia producer has overestimated demand. While it would be wrong to herald the demise of stevia, it does also seem apparent that it is no magic bullet.

Several high-profile companies remain sceptical about how widely stevia can be used. Derek Yach, senior vice president of global health policy for PepsiCo, told just-food sister site just-drinks last year that uptake in the industry has been slow. “We have got a market that contains things called consumers and they tend to be rather fussy about taste,” Yach said.

This is not to say that the stevia plant won’t stake its claim as a mainstream sweetener source for years to come. But, there are signs that stevia, without more work in the lab, will not be used as widely as initially thought.