Global Stevia Market 2014 Report by Zenith Global

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October 2014

2014 Global Stevia Market

A review of the market performance and latest developments

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Contents

Executive summary and introduction

1: Sugar and sweeteners

2: Stevia market drivers

3: Emergence of stevia

4: Stevia legislation

5: Cultivation and production

6: Pricing

7: Consumption

8: Key developments

9: Challenges

103

10: Forecasts

107

11: Key products

111

12: New product launches

129

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Introduction Humans instinctively crave sugar, and for centuries it has provided an integral ingredient in food and beverage itmes across the globe. The desire for sweet tasting foods is traced back to the earliest stages of human development, when we are exposed first to amniotic fluid in the womb, and subsequently to breast milk, both of which are sweet in taste. The use of sugar across a broad spectrum of food and beverage products helps satisfy this craving and forms an important part of the human diet. Until recent times, the impact of sugar on human health has gone largely undocumented. The detrimental effect on teeth has been widely accepted for centuries, but it is only in more recent times that studies have focussed on its impact on diabetes and obesity. As such, the market for sweeteners is one in transition, with manufacturers fighting a battle to keep their products tasting good, while at the same time tempting consumers with claims that their product is healthier than the one next to it on the ever-competitive supermarket shelf. This trend has seen manufacturers look towards artificial sweeteners and High Fructose Corn Syrup (HFCS) to reduce calories, although even these products have been met by an increasing amount of scrutiny and suspicion. It is against this backdrop that over the past 5 years stevia has emerged into the market, viewed by some as the ‘holy grail’ of sweeteners, offering near zero calories without destruction of taste. Others view stevia as still a long way behind established sweeteners in terms of taste experience, and therefore consumer appeal, with the recent failure of stevia in US Glacéau Vitaminwater as testament to this. This report sets out to look at stevia’s place in the market, its role amongst competing sugar and sweetening products, and its emergence into the market since approval was granted in the US in 2009. The price of stevia, the emergence of new cultivation regions, and the way it is applied by manufacturers will all be examined. It is hoped that this study will provide a useful guide to those looking to gain a greater understanding of the sweetener and its growing importance in the market over the coming years.

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HIS Comparison

Sweetener

Sweetness (vs sucrose)

Primary uses

Global HIS value (%)

Global HIS volume (%)

Saccharin

XXX

Used in combination with other sweeteners in soft drinks, confectionery, biscuits, medicines and toothpaste

Aspartame

XXX

Beverages, dairy products, confectionery, tabletop sweeteners, cereals, preserves and pharmaceuticals. Aspartame remains a principal sweeter in diet soft drinks

Sucralose

XXX

Soft drinks, confectionery, milk products, condiments, dry-mix products

Cyclamate

XXX

Tabletop sweetener, instant beverages, soft drinks, iced tea, preserves, condiments, pharmaceuticals

Acesulfame Potassium

XXX

Soft drinks, alcoholic beverages, dairy products, preserves, confectionery, pharmaceuticals

Neotame

XXX

Soft drinks, desserts, confectionery, preserves, hot drinks and pharmaceuticals

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Global obesity levels

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Legislation The rise of stevia usage on a global level is intrinsically linked to its approval for use in individual regions. Needless to say, the conditions for gaining regulatory approval vary significantly between regions, and are also dependant on the market in which it is to be used. For example, stevia extracts may be permitted to be used for pharmaceutical purposes in a certain country, but not for the use in food and beverage production in the same region. World In 2006 the Joint WHO/FAO Expert Committee on Food Additives (JECFA) established that ‘Stevioside and Rebaudioside A are not genotoxic in vitro or in vivo’. This started a ‘domino effect’ as regulators worldwide began looking at stevia in closer detail. However, the biggest step towards global approval of stevia came in June 2008 when JECFA stated that steviol glycosides are safe for use in foods and beverages and established an Acceptable Daily Intake (ADI) of 4 mg/kg body weight (expressed as steviol), double its previous recommendation. Establishing specifications for the identity and purity for steviol glycosides, JECFA requested a minimum content of 95% of the sum of seven named steviol glycosides, which was subsequently increased to nine in 2010. These are namely Stevioside, Rebaudioside A, Rebaudioside B, Rebaudioside C, Rebaudioside D, Rebaudioside F, Dulcoside A, Rubusoside and Steviolbioside. North America USA: Stevia’s emergence on the US market was an uphill struggle. It first appeared in the late 1980s and quickly gained momentum. However, its import was banned by the FDA in 1991 over health concerns. The first step to lifting the ban on stevia and moving towards its approval came in 1994, when the Dietary Supplement Heath and Education Act forced the FDA to revise its stance the following year and to permit stevia to be used as a dietary supplement, although not as a food additive – a contradictory position given that stevia was considered both safe and unsafe, depending on how it was sold. The turning point came in December 2008 when high quality Rebaudioside A stevia extract was granted GRAS status for use in food and beverages by the FDA, following studies demonstrating that a 68kg human can safely consume between 1,000 and 2,000oz of Rebaudioside A equivalent. The decision was made after leading industry players and partnerships Cargill/The Coca-Cola Company and PepsiCo/Merisant (Whole Earth Sweetener Company) submitted applications for stevia’s approval as GRAS for use in beverages, foods and tabletop sweeteners. 7

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Stevia suppliers Manufacturer: Australian Stevia Mills Pty Ltd Address: TOK Corporate Centre, Level 1, 459 Toorak Rd, Toorak, Victoria, 3142 Australia Website: www.asmstevia.com, www.calfree.com.au Overview: Established in Melbourne in 2004, Australian Stevia Mills Pty Ltd is a specialised stevia product supplier to businesses and consumers in Oceania. ASM is engaged in many aspects of the stevia industry including its regulation, cultivation, quality assurance and distribution. ASM helped to register stevia for use in foods in Australia and New Zealand, the application for which was approved in October 2008. Stevia products: ASM has a cultivation trial programme to broaden understanding about the performance of stevia in Australian conditions and to develop methodology to improve yields. ASM also supplies seeds and related products. ASM supplies stevia to food and beverage and table top sweetener manufacturers in Australia and New Zealand, as well as to select manufacturers in other countries. The company markets stevia under the Calfree, Realsweet, Stevia sport, SimplySweet, Stevia (960), and recently launched Natural Wonder Stevia brands. Each of them offers different levels of sweetening and calories to meet different consumer and industry requirements.

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Pricing Type of supplier The stevia market is set up to cater for the needs of all customers – some manufacturers have different requirements in terms of product quality, others are reliant on suppliers who are able to provide high quantities, while the purchasing decisions of many are driven by the price of the product. As such, the stevia market is made up of dozens of suppliers, each offering different specifications, of varying degrees of quality and at different prices. The top tier of producers is made up by ‘premium’ suppliers. These are usually North American and European based companies, such as PureCircle and Cargill, which adhere to extremely high standards and have traditionally been at the forefront of product advancement. The prices set by these companies are high compared to the general market, but such prices are justified by the rigorous quality processes (the leading global suppliers all have third party quality control which adds to the costs) and generally superior quality of the products compared to rivals in the market. Typical prices provided by premium suppliers were found to be:

Specification (Premium Supplier)

Price (US$/kg)

Reb A 60% (SG95)

Reb A 80% (SG95)

Reb A 90% (SG95)

Reb A 95% (SG≥96)

Reb A 97% (SG≥98)

Typical Premium Supplier Prices, August 2014

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Global stevia market consumption

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Global Stevia Market

2012

2013

2014e

Value (US$ million)

XXX

% increase

XXX

Volume (metric tonnes)

XXX

% increase

XXX

Global Stevia Market

2015

2016

2017

Value (US$ million)

XXX

% increase

XXX

Volume (metric tonnes)

XXX

% increase

XXX

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Key brands - Beverages

Product name:

Coca-Cola Life

Manufacturer:

The Coca-Cola Company

Product description:

First launched in Argentina in 2013, Coca-Cola Life is the brand’s first product utilising stevia and contains 33% less calories than the company’s full sugared colas

Price:

£1.25 per 500ml bottle (US$2.05), £0.68 per 330ml can (US$1.12)

Packaging:

Available in both PET bottle and can

Markets:

Argentina, Chile, Mexico, Sweden, UK and US

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Key brands - Others

Product name:

Heinz Ketchup

Manufacturer:

Heinz

Product description:

In September 2014, Heinz launched ‘Heinz Tomato Ketchup 50% Less Sugars’ in the UK, with 50% less sugar, and 25% less salt than standard Heinz ketchup varieties

Price:

£2.25 (US$3.68) per 570g bottle

Packaging:

Squeezable plastic container

Markets:

Launched 2014

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