Stevia: the natural choice?

I ts leaves had been happily and quietly used for more than two centuries in Latin America as a sweetener and, more recently, in Japan and China as a preservative for pickles and soy sauce.

But an article in the Wall Street Journal last May blew the cover on the naturally sweet herb. The magazine disclosed that two of the world's biggest food corporations, Coca-Cola and Cargill, were teaming up to turn stevia into a brand new, calorie-free, low glycaemic index, all-natural, high-intensity sweetener.

Not only was it more than 200 times sweeter than sugar, but it had a taste profile like real sugar where the sweetness comes in early and then has a swift tail-off, unlike some artificial sweeteners on the market.

Stevia rebaudiana Bertoni, humble member of the chrysanthemum family, first discovered in Paraguay by an Italian botanist, looked the perfect answer to the fattening, tooth-rotting sugars and high-fructose corn syrups used in soft drinks and yoghurts. More importantly, it seemed to be a food and beverage marketing dream ? an all-natural alternative to laboratory-derived 'chemical' artificial sweeteners.

And the interest in stevia is still mounting. But the excitement is not about stevia itself. You can grow it, harvest it, mash up the leaves and get an extract. But that doesn't taste very sweet or, in fact, very nice. The real excitement is because, out of the 10 molecules that make up the active ingredients in stevia, the sweetest one, Rebaudioside A (Reb-A) has been extracted to 97% purity. Also, the only company currently producing the Reb-A extract in any quantity is now putting a supply chain in place to produce it in commercial quantities.

The company concerned is PureCircle, a UK-listed holding company headquartered in Bermuda with a purification plant and offices in Kuala Lumpur in Malaysia.

what the excitement is all about

Peter Milsted, PureCircle's sales and marketing director says: "What PureCircle has done is extract the sweetest part of the leaf, Reb-A, and purified it to pharmaceutical grade purity. And that is what everybody is getting excited about."

The reason, he says, is that Reb-A enables food and beverage companies to do two things: "Number one, we've got rid of the taste. It doesn't taste like sugar, but it has a taste profile like sugar. So they now have access to a natural, sweet-tasting but zero-calorie sweetener that doesn't alter glucose levels in the blood. There are no calories and no tooth decay associated with it."

Second, Reb-A also has a number of important technical attributes, says Milsted. "It is pH stable, which means its use in carbonated drinks is facilitated. It is also temperature stable, which means it can go through the pasteurisation process and be used for yoghurts and dairy-based products. And it has also been used as a preservative, so it has a shelf-life way beyond most, if not all, artificial sweeteners."

In other words, says Milsted, Reb-A can find application right across the food and beverage industries with very few issues. "So there are a lot of practical reasons why it is interesting the large manufacturers. But I would suggest that probably the biggest reason is that it is natural and so offers a marketing platform that the big manufacturers can't currently inhabit."

Reb-A, says Milsted, allows manufacturers to create a marketing pitch of 'wellbeing' and 'wellness'. "For a number of manufacturers we are talking to, their strategies are built around trying to get food more healthy or which gives benefit. Reb-A plays directly to this."

But perhaps more importantly for the future of stevia as a wonder sweetener, PureCircle has built up a supply chain. "We have done a lot of work on the supply chain so that we can begin to deliver the amounts of product that would be required by the major manufacturers," says Milsted. At the end of 2007, which was PureCircle's first full year of production, output was around 100t, he says. "Moving forward we will go to around 1,000t by 2009 and from there we can see our way to 5,000t a year.

"To put that in perspective, we consume around 150Mt of sweeteners a year. That includes high-fructose corn syrup, but the majority of it is sugar. So if you multiply our amounts by 200 (the sweetness factor of stevia compared with sugar) you can see that in terms of the entire sweetener market, we are a pretty small dent.

"So we don't claim we are suddenly going to substitute sugar, nor even artificial sweeteners. But what we think will happen is that Reb-A will be used to launch an entirely new health platform for food ? 'natural and good for you'. And there's a massive market for that."

how the stevia rush began

PureCircle started in 2002 as a collection of largely food-related intellectual property that a group of entrepreneurs had bought and then researched, says Milsted. "And the research came back and said that if we could solve the problems of taste and consistency of production of stevia, then we might have something the market would be very interested in."

PureCircle currently has a contract with Cargill, which has just been extended to mid-2010, to supply high purity Reb-A to go into its new sweetener, Rebiana. "But we are also talking to a number of other major manufacturers around the world."

Milsted accepts there are a number of other companies that can produce high-purity Reb-A, not least Cargill itself, which is developing its own stevia plant breeding and production system in order to develop commercial quantities of a standardised extract. "But the six years we have spent putting together a supply chain has given us a first-mover advantage," says Milsted. "We want to keep that. You just can't set up a supply chain overnight.

"You need to find a landbank. You need to know how your plants are reacting to the environment you're planting them in. You need to control the farming. You need to look at water drainage and any potential contamination. There's a lot of complex work that has to be done before the major manufacturers will be prepared to come and audit you and buy from you."

sourcing new supplies

Currently, China accounts for about 80% of the world's stevia production. And PureCircle has a 55% stake in its Chinese subsidiary Ganzhou Julong, which is involved in largescale stevia plantation.

But one of the key reasons PureCircle listed on the UK's AIM market in December and raised $50M was to get the money to open up a second supply chain. "This is in Africa with our partner [tea company] James Finlay & Sons," says Milsted. "We are using its expertise in plantations and agronomy to start from scratch in Kenya in 2008."

Milsted says the environment in Kenya will have some useful bonus effects on the stevia plants. "We've planted the stuff at quite high altitudes, so it is exposed to a lot more ultra-violet light. In order to protect itself from the UV, the plant produces more of these glycosides, so we are getting higher yielding plants from Kenya."

There are possibly 20 countries where Reb-A can be used as a sweetener, says Milsted, including China, Japan, Korea, part of South America, Russia and India. And Australia and New Zealand look likely to approve its use this year.

But it is still not allowed in the US or in Europe, although in the US it can be ingested by humans, but only if it isn't called a sweetener. So it is being used there as a dietary supplement.

However, by isolating one molecule, Reb-A, and purifying it, PureCircle has in effect produced a standard molecule that is much easier to test and trial. "That will move the game on quite significantly," says Milsted.

competition for production

But there is competition. Canadian ingredient firm GLG Life Tech Corporation has recently announced that it is to build two stevia processing plants in China. And Cargill has confirmed that it has partnered with GLG to bring Reb-A to the consumer market. GLG recently acquired Agricultural High Tech Developments in the Marshall Islands and AHTD has its own patent-pending seedlings and research experience in producing high Reb-A stevia plants.

A Californian ingredient and micro-encapsulation firm, Blue California, also claims to have successfully isolated Reb-A and expects to go into industrial scale production this year.

"But as we stand right now, there is nobody who can produce commercially viable quantities," insists Milsted. "I don't think there's ever going to be a time when PureCircle will be able to satisfy the entire demand of the industry. So other people coming in will help stimulate use of the product by making it more widely available - and that is in our interest."