Coca-Cola and Cargill to sweeten stevia market

On May 31, Coca-Cola and Cargill announced a joint venture to introduce a new natural sweetener to the global market. The new product, called rebiana, is a derivative of stevia, which is 200 times as sweet as sugar. However, stevia is currently not allowed as a food additive in either the United States or European Union, meaning that the global food giants face a regulatory battle for domestic approval.

In spite of these challenges, Coke has filed 24 domestic patent applications for using rebiana in everything from vitamins to cereal, while Cargill has developed a controlled growing and production system for stevia in China, Paraguay and Argentina.

The sweetener will likely appear first in the significant markets where stevia is allowed in foods, including Japan and China.

"This is absolutely good news for the natural sweeteners industry," said Tim Avila, president of San Clemente, Calif.-based Zsweet, which manufactures a non-stevia sweetener. "Anything that is shown safe and tastes good is good for the market."

It's the 'proven safe' that may be the hurdle. The Food and Drug Administration has stated that "available toxicological information on stevia is inadequate to demonstrate its safety as a food additive." Thus it can currently be marketed in the United States only as a dietary supplement, though it has enjoyed wide success in Japan, traditionally a very safety-concious regulatory environment.

"We've known about this for a long time," said James May, president and founder of SweetLeaf Stevia, based in Gilbert, Ariz., which first introduced the sweetener to the U.S. market in 1982. SweetLeaf has considered gathering the research and preparing the application for FDA approval, but for a small company the cost has been prohibitive. However, May sees a bright future for the sweetener, whose safety, he claims, is demonstrated by 1,500 years of traditional use in Paraguay and 13 years since the passage of DSHEA without a single reported adverse event.

"It's going to be the biggest, most desirable sweetener in America, and eventually on the earth," May said. Though the current U.S. stevia market is only in the $16 million range, that is largely because of its dietary supplement status, and the fact that FDA prohibits manufacturers from mentioning its sweetening ability.

May sees huge growth potential in both the tabletop sweetener category, valued at $500 million annually, and in the beverage market. But he also has concerns that Coke and Cargill may push the original players to the sideline. "Right now my company has 80 percent of the stevia sales in America," May said. "Now that the pioneers have done the work and proved the efficacy, are they going to take over?"