The Vancouver-based company is a vertically-integrated producer, manufacturer and distributor of stevia leaf extracts and has capitalized on a recent boom in the popularity of products containing the natural sweetener, which achieved generally recognized as safe (GRAS) approval from the U.S. Food and Drug Administration in December 2008. For its explosion in sales, GLG can primarily thank Cargill. In 2008, GLG inked a $40.5 million deal with the international food and ingredient company to supply the stevia extract that Cargill employs in its Truvia brand tabletop sweetener. Truvia is also being used in a multitude of forthcoming stevia-sweetened products.
GLG increased its stevia production fourfold in 2009 with the opening of two new leaf-processing plants in the first quarter of last year and a new refining plant in the fourth quarter. The new plants have upped GLG’s stevia extract production capacity over 700% compared to 2008, GLG reports. These massive expansions in revenue and production of stevia leaf extract for GLG are indicative of the extract’s increased penetration into the food and beverage market at large. Since rebaudioside A (or Reb-A)—the extract derived from the stevia leaf—received GRAS certification, it has garnered great interest from manufacturers and consumers worldwide and has begun to make heavy inroads into the alternative sweeteners market. For example, since its launch, Cargill’s Truvia sales have risen to 8% of total market share in alternative sweeteners, and the Coca Cola Co. has cemented a partnership with Cargill for use of Truvia in its beverages. According to an August 2009 report by Mintel, U.S. sales of products containing stevia had already reached almost $100 million in the first seven months of 2009 and are projected to hit $2 billion by 2011.
NBJ Bottom Line
Despite a lack of awareness of stevia among U.S. consumers in 2009, the sweetener was a big winner and has nowhere to go but up. In its August 2009 report, Mintel noted that nearly 70% of Americans had never even heard of stevia, suggesting that it was up to manufacturers to spread the word via heavy marketing, in-store demos, free samples and the like. Since that report, stevia’s popularity has increased, especially as concerns over a U.S. obesity crisis foment. According to a January 2010 survey by stevia producer PureCircle, nearly half of American women are now aware of stevia. Such recent growth in awareness appears to be having a significant impact on stevia sales. Case in point: GLG saw its most profound revenue increase in the last quarter of 2009, pulling in $13.3 million, a 185% increase over its fourth quarter 2008.
Stevia’s profile will continue to grow as it becomes incorporated into products from high-profile companies (like PepsiCo’s Aquafina Plus Vitamins 10 Cal and Group Danone’s Levite) and ventures outside of just the sweeteners and beverage categories (like spoonable and drinkable yogurts from Nestle).
NBJ took a close look at stevia and the natural sweeteners market in our February 2010 Functional Food and Beverage Issue. Also be sure to download and listen to the 2010 Functional Food and Beverage Web Seminar. To order or subscribe, please visit the NBJ Subscription page.
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