STEVIA AS AN ALTERNATIVE SWEETENER the present position paper, KnowGenix attempts a brief analysis on the prospects and challenges of emerging Stevia markets. STEVIA AS AN ALTERNATIVE

STEVIA AS AN ALTERNATIVE SWEETENER - PROMISE AND CHALLENGES

A Position Paper by KnowGenix in line with Stevia World 2009

For more information on STEVIA WORLD 2009 please visitwww.steviaworldforum.com

Copyright © 2009 by KnowGenix & Centre for Management Technology. All rights reserved.No part of this position paper may be republished in any form whatsoever, electronic, or mechanical — without expressed written consent from the author. You may, however, distribute the PDF document without any alteration, to your colleagues and business associates that you think will benefit from the author’s insights; however, you are not permitted to offer this paper as free or paid download material through any internet sites.

Disclaimer And/Or Legal NoticesThe information presented herein represents the views of the author as of the date of the publication. Because of the rate at which conditions change, the author reserves the right to alter and update his opinions based on the new conditions. This position paper is for informational purposes only and the author does not accept any responsibility for any liability resulting from the use of this information. While every attempt has been made to verify the information provided here, the author, resellers and affiliates cannot assume responsibility for errors, inaccuracies or omissions. Any slights of people or organizations are unintentional.

STEVIA AS AN ALTERNATIVE SWEETENER - PROMISE AND CHALLENGES | © 2009 KnowGenix & Centre for Management Technology. All Rights Reserved.2

In the present position paper, KnowGenix attempts a brief analysis on the prospects and challenges of emerging Stevia markets.

STEVIA AS AN ALTERNATIVE SWEETENER - PROMISE AND CHALLENGES

I. EVOLUTION OF SWEETENER MARKETS

Sweeteners markets have evolved rapidly, since the 80’s, with global shifts in consumer preferences for better and safer sugar alternatives. In the 80’s the major markets for alternative sweeteners was in foods and beverages for diabetics. According to a Freedonia report, it was in 1960, with demand of health conscious consumers the market for alternative sweeteners emerged. Cyclamate and Saccharin products were in vogue then. Eventually, health concerns about Cyclamate and Saccharin led to new alternatives. In the subsequent years, a number of other high-intensity sweetener products emerged, following FDA approval: Aspartame in 1981, Acesulfame potassium (or Ace-K) in 1988, Sucralose in 1998 and Neotame in 2002. Currently, Alitame is pending FDA approval and Cyclamate is pending re-approval. Polyols (or sugar alcohols) such as sorbitol, xylitol, mannitol and maltitol have found use in a variety of foods, especially candy, gum and mints. However, none of these products emerged as a good sugar alternative.

Subsequently, Stevia and Agave nectar emerged as products offering the brightest prospects. A new plant-derived high intensity sweetener, Brazzein, is now emerging on the horizon. The product is reported to be 1,000 times sweeter than cane sugar on a weight basis. Brazzein is a sweet protein extracted from the berries of a West African plant named Pentadiplandra Brazzeana.


Photo Courtesy from SteviaSugar Corporation Sdn Bhd

II. STEVIA : EVOLUTION AS A SWEETENER

“Stevia Rebaudiana” or “sweet leaf” or stevia, a native of Paraguay is fast becoming a major source of high potency bio-sweetener. It is a hypocaloric bio-sweetener known for its therapeutic properties, in the treatment of cough, joint pains, blood pressure, diabetic, weight management and skin rejuvenation etc.

The Japanese were the first to use Stevia as a table-top sweetener. In the 90’s Japanese food products sweetened with Stevia accounted for about 41 percent of sweetened foods made in the country. The Stevia boom which spread to USA caught the attention of the U.S. Food and Drug Administration, which in 1987, issued a ban on its use because it had not been approved as a food additive. Following lengthy debates, in 1995, the FDA issued a statement allowing Stevia to be used as a dietary supplement.

Due to increased awareness towards use of herbal and traditionally accepted medicinal plants, a steady Stevia market is emerging.

The sweetness in Stevia is mainly attributed to two compounds viz. Stevioside and Rebaudioside A which can be up to 250 times sweeter than sucrose.

Stevia is normally used as fresh Stevia leaves, dried leaves, extract and liquid concentrates. In the 70’s and 80’s, Stevia developed as a sweetener and flavor enhancer in Japan, China, Korea, Israel, Brazil and Paraguay . Some of the emerging areas where Stevia and Stevia herb extracts are used periodically are toothpaste, mouthwashes, skincare, food, controlling human disorders, and as a bacterial agent.



III. PLANT AGRONOMY : CULTIVATORS IN A LEARNING CURVE

Management of Stevia cultivation is yet to mature in many regions and cultivators are still on a learning curve. While tolerant of most soil types, Stevia is normally grown on a sandy loam or loam. Stevia occurs naturally on soils of pH 4 to 5, but thrives with soil pH as high as 7.5. However, Stevia does not tolerate saline soils. Normally there is no pest or disease incidence reported in this crop. Harvesting starts after 3rd-4th month of plantation.

In India, Stevia cultivation is also looked upon as an opportunity to revitalise rural economies and tax incentives are being offered to take up cultivation. Bioved Research and Communication Centre (BRCC), UP, a centre which coordinates Stevia cultivation in the Northern State of Uttar Pradesh has reported that Indian climatic conditions suits Stevia cultivation due to ideal temperature conditions and the humidity ranging from 65-85 %. Scientific cultivation and careful selection of planting material can yield better returns in shorter times as compared to traditional crops according to Indian Stevia cultivators.

Cultivation of stevia opens up new vistas for crop diversification and a viable alternative to sugar cane in view of escalating cost of production due to extensive usage of chemical fertilizers, pesticides and irrigation requirements of sugarcane. Cultivation of stevia may be useful in the protection of environment, restoration of the health of soil, and revitalize the rural economy.



IV. GLOBAL MARKETS

Sweetener markets have been through enormous transitions in recent times, with a slew of sugar alternatives emerging on the scene. Post 90s, the global diabetic population particularly in Asia has been exploding exponentially. This has led to a rapid growth in markets for a natural, low calorie sweetener. With research indicating harmful impact of products such as Asparatame there was need to develop an alternate product.

Enter Stevia, a plant with a long history of safe usage. It has received regulatory approvals for the use of Stevia extracts as a food additive in Japan, Korea, China, Taiwan, Australia, Russia, Ukraine, Kazakhstan, Malaysia, Indonesia and Latin America. Stevia with rebaudioside-A (Reb-A) at 95% purity level or above has achieved generally recognized as status (GRAS) in USA.

Global markets for Stevia is pegged at around $ 500 mn with Japan alone accounting for $ 200 mn. At present globally 80,000 acres are covered under Stevia cultivation, of which China accounts for a major chunk of 75%. In the last three years, the Indian farmers have also started taking up Stevia cultivation following large demand for non sugar based sweetener for the growing anti diabetic market.


V. COMMERCIAL AND REGULATORY STATUS

In 1991, Stevia was deemed unsafe and was banned from the USA completely. It was only legalised as a dietary supplement due to the changing of laws.

According to Mintel’s Global New Products Database (GNPD), globally 180 new food and beverage products containing Stevia have been launched in the past year. These include teas, potato snacks, dressings and beverages. To seek approval for the use of Stevia in foods in the US, food manufacturers have two options: either classify the ingredient as generally recognized as safe (GRAS) and provide FDA with the necessary scientific data or petition the FDA to approve the ingredient as a food additive. Achieving GRAS status is a much quicker process, with FDA generally responding to GRAS notices within 180 days of reception.

Submission of GRAS determination to FDA is voluntary; another way is through GRAS self-affirmation process. GRAS self-affirmation is a legal and FDA-approved process that allows companies and organizations to conduct their own GRAS self-determinations by consulting with an independent panel of scientists to determine if an ingredient meets the FDA’s criteria for safety. The necessary requirement is a “reasonable certainty in the minds of competent scientists that the substance is not harmful under the intended conditions of use.”

Source: http://www.bluecal-ingredients.com/whatsnew/pr_20081217.php, http://www.foodprocessing-technology.com/contractors/ingredients/blue-california/



Stevia product development and launches have seen several partnerships such as Pepsico-Merisant and Coke-Cargill alliances. Pepsico-Merisant and Coke-Cargill were the first to get the FDA approval.

Pepsico was the first to launch the stevia products internationally and in the US. It launched Sobe Life water both internationally and in the US. It also launched Tropicana 50, a reduced calorie orange juice in the US. Coca Cola company launched Sprite green and Odwalla drinks. Other companies in US who are marketing Stevia extracts :

• PureCircleannouncedcontractextensionswithCargillandmajor new contracts with PepsiCo and Whole Earth Sweetener Company for the supply of high-purity Reb A in beverages, foods and tabletop sweeteners worldwide. PureCircle has a license agreement giving it the right to sell high-purity Reb A under the PureVia™ brand in categories and customers to be determined PureVia is being sold in US markets.

• PyureBrandsLLC,Naples,Fla.,isproducing97percentreb-A under its own Pyure brand for tabletop use, but wants to specialize as a private-label supplier for grocery stores, as well as being in talks with some commercial customers.

• WisdomNaturalBrandshasbeenproducingasteviatabletop sweetener under the SweetLeaf brand. SweetLeaf Sweetener obtained self affirmed GRAS status in Mar ’08 as determined by two independent groups of former FDA professional scientists.

• GLGLifeTech,alsomadeaGRASself-affirmationthedayafter the FDA non objection. Its 97 percent reb-A is called Rebpure. GLG is a supplier to Cargill.

Source: http://www.vegetarian-nutrition.info/herbs/stevia.php

VI. SAFETY ISSUES

Since the 70’s, Stevia has been used in Japan as the main alternative to sugar instead of the banned aspartame in diet soda, gum and other food and beverages. Stevia is also used as a sweetener in other countries after extensive studies proved its safety. Stevia has been used with success to treat many ailments including diabetes, high blood pressure, gingivitis, digestion ailments, and addictions, topically for acne and other skin ailments and also as a wonderful weight loss aid. Stevia provides several advantages over sugar and artificial sweeteners when used in food production, lower costs for transportation, storage/warehousing and handling charges:

In 2006, the World Health Organization evaluated Stevia and found no evidence of carcinogenicty in Stevioside and Rebaudioside A. It also reported that Stevioside led to beneficial effects in patients with hypertension or with type-2 diabetes. The report concluded that further study was needed to determine proper dosage.


Photo Courtesy from The Truvia Company, LLC.

VII. FUTURE DIRECTIONS

In the coming months several launches are expected internationally and also in the US. Worldwide, there has been much movement across scientific bodies for the approval of the

use of Stevia in food and beverage applications as a new all natural sugar substitute leading to lowering of restrictions on the ingredient in many countries. Europe has traditionally been the most strict regulatory community for Stevia but interest from industry players in the European region remains strong.

There are several limitations to the growth of Stevia markets. The key ones relate to economics as Stevia products are currently more expensive than other high-intensity sweetener products. The other issue relates to after tastes as Stevia products are reported to have a distinct after taste. Companies involved in formulation development are focusing on this as also product consistency issues.

The major challenges for the Stevia market is competition with ordinary sugar, higher price of Stevia added products than the ordinary products and lack of raw materials.

As Stevia value chain from cultivation to processing to refining is poised to grow in near future, it is imperative to look at sustainable models of Stevia production – an activity which can have profound implications for revitalising rural economies world wide.

Note: This paper is a macro level look at developments and should not be construed as a comprehensive report. As stevia markets are still evolving there will be several changes in our understanding of the markets and regulatory issues in coming months. Feedback is sought on this paper for better understanding of markets and products.


SOME RESOURCES AVAILABLE ON THE WEB FOR FURTHER INFORMATION

http://www.foodnavigator-usa.com/Financial-Industry/GLG-ramps-up-stevia-production-for-Rebiana-supply

http://www.foodnavigator-usa.com/Legislation/FDA-awaits-stevia-petition

http://www.nutraingredients-usa.com/Industry/Has-stevia-broken-US-dietary-supplement-shackles

http://online.wsj.com/article/SB122955049250715515.html

http://www.fao.org/ag/AGN/agns/files/jecfa69_final.pdf

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080515005634&newsLang=en

http://uk.reuters.com/article/UK_SMALLCAPSRPT/idUKN1528051520080515?pageNumber=1&virtualBrandChannel=0

http://www.foodprocessing.com/articles/2009/004.html

http://www.vegetarian-nutrition.info/herbs/stevia.php


CMT’S STEVIA WORLD 2009

Stevia World 2009 will be held from 14-15 May 2009 in Shanghai, China.

Stevia World 2009 is a showcase of top stevia growers, refiners, traders, key stevia organisations, government officials, scientists and investors who will highlight Upcoming opportunities, Pinpoints Regulatory Challenges & Shares Market Updates.

Stevia World 2009 is not just a one-way conference or a static tradeshow. In fact, Stevia World 2009 is a timely communications platform that will give participants the opportunity to meet, exchange ideas and learn about the latest developments, innovations and opportunities arising from the Stevia value chain.

In 2 action packed days designed to deliver maximum learning and discussion, Stevia World 2009 will touch on key & vital areas in the Stevia value chain including:

• SummingupSteviaMarketTrends&Outlookfor2009.• Processing&ManagingSteviaProjectsaroundtheworld-CaseStudies• Growingaroundtheworld-BestPractices• Extracting&RefiningforTopGradeSteviaSweetenerManufacture• Top&UpcomingSteviaApplicationsformaximumreturns

Stevia World 2009 facilitates 8 hrs of networking and exchange of perspectives & is the only platform that brings together buyers & sellers in the Global Stevia Sector.

To find out more about Stevia World 2009, and how to sign up for this authoritative event today, please visit www.steviaworldforum.com/attend today.


ABOUT THE AUTHOR

This Position Paper, ‘Stevia as an Alternative Sweetener - Promise and Challenges’ was written by Dr. R. Rajagopal, Chief Coordinating Officer of KnowGenix.

KnowGenix is a business research and growth strategy firm involved in chemical, material and energy practices. The firm researches business and technology trends in petrochemicals, fine, specialty and life science chemicals value chain as well as in materials and energy. It offers a host of services including business optimization, competitive intelligence, knowledge documents and executive training to clients in oil, gas and chemical value chain.

KnowGenix, is a Knowledge Partner of Centre for Management Technology (CMT).

For more details visit www.knowgenix.com orsend an e-mail to [email protected]


ABOUT CENTRE FOR MANAGEMENT TECHNOLOGY (CMT)

Centre for Management Technology (CMT) is a world leaderin renewable energy, alternative fuels, petrochemicals &commodity conferences, conducted in over 23 countries.

CMT’s commodities conferences have explored upcoming market opportunities & industry trends for strategic commodities like Grains, Oilseeds, Stevia, Sweeteners and Sugar etc. We were behind globally recognized events like:

3rd World Sugar Trade Summit (5-6 Feb 2007 in Dubai)

The event attracted over 400 key sugar industry executives from 50 countries around the world. Recognized as 2007’s largest and most important Sugar industry conference, 3rd World Sugar Trade Summit was sponsored by top companies including Al Khaleej Sugar, Euronext Liffe, New York Mercantile Exchange and Coimex Trading (Suisse) SA.

World Grains Trade Summit (17-18 Feb 2009 in Singapore)

This event was held to mark the growing prominence of Asia in the world grains market. Attracting over 200 top decision makers shaping the world’s grains & oilseeds industries from over 30 countries, World Grains Trade Summit was well received in the community. World Grains Trade Summit was sponsored by the industry’s most influential organizations including SGS, Monsanto, Glencore Grain, Intertek Agri Services, Concordia Agri-trading & Nibulon Ltd.


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STEVIA AS AN ALTERNATIVE SWEETENER the present position paper, KnowGenix attempts a brief analysis on the prospects and challenges of emerging Stevia markets. STEVIA AS AN ALTERNATIVE