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Editorial: Stevia Category Entries Proliferate - How Sweet Is It?

Len Monheit

October 18, 2009

3 Min Read
Editorial: Stevia Category Entries Proliferate - How Sweet Is It?

In late 2008, the North American food and beverage industry received news that would alter the (caloric) balance of its world forever. The first stevia-derived sweetener, a product standardized to a compound called Rebaudioside-A or Reb-A had received FDA GRAS approval, and could be included in food and beverage formulations. Prior to that point, stevia products were only allowed in dietary supplements, relegating the use of the intensely sweet ingredient to a much smaller marketplace.

Several factors contributed to the leap onto the main stage. First it took the critical realization that there was a better food and beverage sweetening opportunity that could reduce caloric load significantly. Secondly, it took processing technology to create a product that did away with the bitterness commonly associated with stevia products, and do so at scale. Finally, it took giants like Cargill and Coke (and Pepsi) to invest and change paradigms (and the regulatory environment).

In the past twelve months, many companies have jumped on board the stevia bandwagon, many touting ultra-pure Reb-A, but even stevia itself has gained popularity in the process. Entries into the category include some of the largest ‘sweetener’ companies, but also ingredient companies considering the sweetener category as yet another herbal extract opportunity to exploit.

As we know all too well in this world, not all companies, or products, are created equal. The regulatory status of numerous Reb-A products is unconfirmed, and the taste profiles of the entire range of new introductions vary greatly. The surge in popularity (and opportunity) means product formulators have new and interesting opportunities for new product development and actual production economies can shift as greatly as taste profiles. In an industry where entrepreneurial spirit thrives and all too often, barriers to entry do not, it’s no surprise to see a deluge of category entries whose main claim to impact is marketplace confusion.

Who benefits from market confusion?

It’s certainly not the big players that have already made the investment to take market leadership with established partners. It’s not the ‘effectively’ branded ingredient community that would typically support branded products with intellectual property investment, proprietary research and a mature approach to market. Retailers and consumers also do not benefit; as some manufacturers introduce products with poor taste profiles, all the while, alleging the highest stevia and Reb-A quality available. So the beneficiaries become the commodity ingredient suppliers that can do ‘anything for a buck’, by quickly jumping on this bandwagon.
In addition to confusion, what are the likely outcomes?

Well, on the positive side, these developments will likely put some price pressure on the market. Even this though, is a naive argument, as one would hope that a first-mover, IP and research supported approach to market pays off lucratively for initiators, since, as an industry, we need to encourage more of that behavior.

On the truly negative side, if the taste profiles become extremely erratic, full realization of Reb-A potential may be stifled or at least delayed. Consumers will associate stevia and Reb-A based sweeteners with a variety of tastes, some quite unpleasant, and current momentum may turn to the hype we all too frequently see with promising ingredients and categories.

In general, I’m a free-market kind of guy. I also fully appreciate the entrepreneurial spirit which runs rampant through this sector, and its contribution to the character of this industry. What I’m dead set against is indiscriminate entry into category after category, with no value added, merely to commoditize and confuse. Currently, each week we’re seeing new ‘stevia’ category entries, the latest example of companies trying to ride the coattails of emerging trends.

While on the subject of stevia and Reb-A and the potential impact of novel zero and low-calorie sweeteners on the food and beverage sector, I’d be remiss to not mention the upcoming Nutracon 2010 coverage of the category and implications from a scientific, IP, formulation and economic view. Check out the two day track, Mainstreaming of Natural Sweeteners, March 10-11, 2010 in Anaheim, California.

About the Author(s)

Len Monheit

CEO, Trust Transparency Center

Len Monheit has been in the industry for 20 years, initially as a cofounder of digital media leader NPIcenter, which was ultimately sold in 2006 to New Hope Natural Media, As part of New Hope’s senior leadership team, Len assumed responsibility for digital media operations, then the ingredient portfolio of Functional Ingredients, Engredea, and Nutracon, initiating international market preparation workshops in Japan, China and India and finally, in market analysis as part of Nutrition Business Journal and the NEXT insights platform. Len has guided ingredient and supplement companies on strategy, is a sought after speaker on multiple continents on topics such as: ingredients, the supplements market, supply chain and sourcing as well as emerging trends. Len is currently CEO of Trust Transparency Center.

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