The food industry is paying increasing attention to stevia, a natural, zero-calorie sweetener that its suppliers claim can help manufacturers meet growing demand for healthier products. Stevia suppliers like UK-listed PureCircle are securing contracts with more of the food industry’s leading names and today (30 July) the company’s CFO William Mitchell talked to Dean Best about the development and potential of the ingredient.

just-food: There is a lot of noise around stevia at the moment. Why is that and how do you see the market for the ingredient developing?

Mitchell: The positioning of stevia is as a mass-volume commodity sweetener. The key thing is that it’s natural so, when you’re thinking about stevia, see it as aligned to sugar and corn-based sweeteners. If you look decades into the future, we see stevia, sugar and corn-based sweetners as being at the core of mass-volume sweeteners. Increasingly, you will see those sweeteners being used in combination with each other. The target is not zero-calorie – yes, it will be a part of it – but the main opportunity is in mainstream products where companies like Nestle, General Mills, Coke, Pepsi are looking to reduce calories across their entire portfolio by 20-30%.

If you are going to do a mass-volume commodity sweetener, it’s got to have a fantastic taste, it’s got to have the right price point, it’s got to be produced in scale and it’s got to be sustainable. Stevia fits the bill on all of those. The long-term planning vision for the industry is on working very well with sugar.

just-food: This week, PureCircle announced a venture with Associated British Foods’ sugar arm British Sugar. What will this mean for the business?

Mitchell: If you look at the food and beverage companies, if they are putting sweeteners into their major global brands, you are talking billions of tonnes of sweetener. You’re talking about trucking, tankers – it’s a big system for mass-volume sweeteners. What the relationship with British Sugar does is give you a combination of our leadership in stevia with British Sugar’s leadership in sugar. We bring a very strong complimentary client base. We’ve got fantastic global account relationships with for example Danone, Pepsi, companies like that. British Sugar is clearly very well established and has fantastic client relationships in its regions. It’s a coming together of two leaders and a strong growth opportunity for both companies.

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just-food: What kind of product applications are is stevia being used for?

Mitchell: “If you take Danone, they have recently launched in France a yoghurt brand called Taillefine, which is one of their main brands. They’ve already launched some stevia-sweetened products there. If you take Coca-Cola, they’ve launched a Fanta product in France. Merisant has launched a table-top Candarel sweetner there, which is doing very well. If you go to the States, clearly the market opened up earlier – FDA clearance came through in December 2008 – so, by volume, you’ve got more of the products there. France only opened up in September 2009 and you’re getting very good traction there. EU approval will give another catalyst to the market.

just-food: There are some challenges ahead. The price of stevia can be expensive for some manufacturers.

Mitchell: Yes, you are correct [but] long term, stevia can be produced at a competitive price to the other commodities. It does not need as much in terms of resources. Stevia delivers so much sweetness, so for one kilo equivalent of sugar, the total land, water, labour, resources needed to deliver the same amount of sweetness from stevia only takes about a third or a quarter of the resources. So, looking at long-term price, stevia will be a mass-volume commodity.

just-food: Are there any concerns over the variations in the content and flavour of stevia depending on where the commodity is produced?

Mitchell: There are over 100 different strains of leaf around the world. You do get slightly different molecule mix from different strains. That doesn’t matter. What we sell is the clean molecule: reb-A. Even though the different leaves may have a different mix of molecules on them, we extract and refine so what we say is always exactly the same. The big breakthrough that PureCircle has done is the ability to isolate the individual molecule. We don’t change the molecule, we just isolate it so that it is the same molecule every single time. There is absolute consistency. That was the big breakthrough that was needed to enable you to formulate these big volume brands. We have led the development of stevia so we now have stevia grown in 15 countries in South America, Africa and south-east Asia. We’re building up a sustainable supply chain and sustainable cash crop across all those regions.

just-food: Is building consumer awareness of stevia the most significant challenge that lays ahead?

Mitchell: All food and beverage ingredients rely on consumer acceptance, adoption and pull-through. Stevia will ultimately be about consumer pull-through. However, I will stress that a macro level there are a lot of very strong positives for the ingredient. Stevia is very good for diabetes, consumer demand for natural products is increasing strongly, there’s a good sustainability story and it delivers a fantastic taste, particularly when blended very well with sugar. At a macro level, there are lot of good consumer reasons why stevia will become widely accepted. There’s a lot of momentum.