PureCircle has said it expects stevia to become a “mass volume commodity sweetener” like sugar as the take-up rate from food and beverage companies ramps up.
CFO William Mitchell told just-food today (11 September) the company was “comfortable” about how the stevia market is developing, despite the firm reporting widening full-year losses amid a fall in sales.
He said stevia is now being sold in 47 countries, with 2,600 products containing the sweetener having being launched over the last 12 months globally.
“This is a long-term product and so if you looked at the progress that has been made … it’s a pretty good take-up rate. In the context of a long-term vision, we are very comfortable with the progress that’s being made. We believe stevia is going to be a mass volume commodity sweetener like sugar, like corn.”
PureCircle said the decline in sales came as its results did not include “take or pay” revenues. It said volumes were higher and said recent sales trends gave the company confidence in the potential of the stevia sector.
The company said recent results had been impacted by the decision in 2011 to slowdown reb A production temporarily to align inventories to market demand.
Mitchell said the company had to ramp up production in 2009 and 2010 in order to demonstrate to its major global clients it had the capacity to produce the volumes of stevia they required.
“It’s a chicken and egg. If we only ever kept low production they wouldn’t have the confidence to put stevia in their bigger brands. We had to convince we could produce in hundreds of tonnes.”
Mitchell said the split in the use of stevia from food and beverage companies is weighted at around 75% to drinks firms, the company is seeing more food companies using stevia in their portfolios.
“Historically the beverage sector has led the way and they have been the major early adopters,” he told just-food. “However, one thing that is great about the last two years is you are seeing a lot more food categories, particularly in dairy and chocolate, coming in.
“We think over time you are going to get stevia penetrating most categories. This is very much the positioning for the mainstream and the positioning is mass volume.”
As a result, the company has said it will slow down production of one of its products, Reb A until those volumes are used up and companies place further orders.
“Our confidence is correct because across the last 12/18 months you are seeing a lot more products using stevia so when they get well-received by consumers, companies will come back for a lot more product in the coming years.
“This is a long-term project … it will be tens of years before stevia becomes really mass volume, but we are moving towards that direction. We see stevia it as a long-term mainstream mass sweetener.”
The company this morning reported a loss after tax of US$23.3m for the year to the end of June, compared to a loss of $18.5m a year before.
PureCircle, which supplies the likes of PepsiCo, Merisant and Danone with the zero-calorie sweetener, said it incurred foreign exchange costs of $2.1m over the year. However, sales fell 15% to $45.4m.