Natural ingredients sweeten the market for sugar substitutes: growing public concern about overall health has opened the door for natural alternatives to sucrose and chemical substitutes.
U.S. demand for alternative sweeteners is projected to increase 4% per year to $1.1 billion in 2010, up from $772 million in 2000, according to a 2007 study from the Freedonia Group, Inc., a Cleveland, OH-based industry research firm.
"There is a significant industry trend to find alternatives to synthetic sweeteners, led by companies like Whole Foods," said Paul Altaffer, vice president of business and product development at RFI Ingredients, Blauvelt, NY, which supplies Talin, an all-natural flavor enhancer derived from the West African thaumatin fruit. "Natural food and beverage manufacturers especially are being challenged to find these alternatives. The issues have come down to cost, functionality compared to synthetic, and regulatory status. It has so far been a daunting task to find natural sweeteners that have high sweetening impact, are suitable for numerous applications, are approved for use in foods, and have a cost structure that permits their use."
The State of Stevia
Sometimes referred to as "alternatives to the alternatives," natural sweeteners that boast low caloric and glycemic impact could begin to boom--and soon. For example, stevia, currently sold in the U.S. and Europe as a dietary supplement, could attain generally recognized as safe (GRAS) status in the foreseeable future, particularly in light of the recently forged partnership between industry giants Coca-Cola, Atlanta, GA, and Cargill, Minneapolis, MN.
Native to Paraguay, Stevia rebaudiana is a perennial shrub of the aster family that has been used for hundreds of years to sweeten food and drinks in South America and other countries. The plant's leaves contain chemicals called glycosides, the major one being stevioside, which is used as a sweetener in Japan and Korea, where it is recognized as a safe food additive. Stevia represents 40% of the Japanese sweetener market.
Jim May, founder of Wisdom Natural Brands, Gilbert, AZ, who helped first introduce stevia in the U.S., said it's only a matter of time before stevia gains regulatory approval.
"And when it's finally accepted as a sweetener, the health of Americans will substantially improve," he said. Data from the National Institutes of Health (NIH) and the American Diabetes Association (ADA) show that the number of Americans with higher than normal blood glucose levels has reached 75 million.
Some studies suggest stevia--300 times sweeter than sugar--has antioxidant, anti-inflammatory and antibacterial properties, helping to fight against diabetes, high blood pressure and tooth decay. However, in October 2007 FDA sent a warning letter to Hain Celestial Group, Boulder, CO, which uses the product in certain tea and drink mixes, citing concerns the sweetener could negatively impact blood sugar levels, the cardiovascular system and the reproductive system.
"Though it can impart a sweet taste to foods, it cannot be sold as a sweetener because FDA considers it an unapproved food additive," FDA spokeswoman Kimberly Rawlings said of stevia. "However, under provisions of 1994 legislation (i.e., the Dietary Supplement Health & Education Act), stevia can be sold as a dietary supplement, although it cannot be promoted as a sweetener.
"Years ago, FDA had some GRAS petitions submitted for stevia," she added. "However, none were ever filed because they were not complete. Since 1997, FDA uses the GRAS notification process rather than reviewing GRAS petitions. At this time we have received no submissions for stevia, whether GRAS or as a food additive. We are aware of press reports that suggest that there may be an imminent submission to the FDA." Coca-Cola and Cargill would not confirm or deny such reports.
Despite its classification, the retail stevia category in the U.S. has grown from virtually zero in 1995 to approximately $60 million in 2006, as more and more companies have acknowledged its potential. Mr. May's Wisdom Natural Brands is now the leading U.S. stevia manufacturer, offering a full line of SweetLeaf stevia products, including single-serving packets, which contain 1 gram of inulin fiber, a naturally sweet prebiotic--derived mainly from chicory--found in more than 36,000 plants.
"Stevia is one of those products that shows incredible promise as a natural sweetener," said RFI's Mr. Altaffer. "It is relatively inexpensive to use, provides high impact, can be used in different formulations ... Should stevia attain GRAS status, there will be a significant boom in the development of food and beverage products containing stevia."
Brien Quirk, technical director, Draco Natural Products, San Jose, CA, a stevia supplier, said GRAS status is important to consumers, as it offers them assurance that products are healthful.
"The FDA has to see further research to support the safety so that we know under what circumstances, if any, or at what dosages it could cause side effects in the general population with increased use," said Mr. Quirk.
Even if stevia gains approval as a sweetener, supply issues could impact the market, sources say.
"There aren't enough plants in the ground to satisfy the demand for natural sweeteners," according to Tim Avila, founder and CEO of Ventana Health, San Clemente, CA, which manufactures the zero-calorie sweetener Zsweet.
Mr. May's sources have informed him that Cargill could attempt to lay claim to existing supplies, cornering the market in China, which produces 80% of the world's stevia, in order to sell its products in Asia and other regions where stevia is already approved.
But there is considerable opportunity in Paraguay, for example, because the crop is a perennial that can be harvested three or four times a year, compared to just once a year in China.
Changing of the Sweetener Guard?
Overall, high intensity sweeteners will continue to dominate the market through 2010, according to the Freedonia report, mainly because of their ubiquity in diet soft drinks and tabletop use. Aspartame and acesulfame potassium (ace-K) will remain on top of the sweetener hierarchy for their use in diet beverages, while sucralose, the main sweetener in Splenda, will continue to lead the tabletop market.
However Freedonia's study also predicts, "The market value for high intensity sweeteners will be suppressed by falling prices, as patent protections expire and new competitors--especially importers based in developing nations--enter the marketplace."
Combined with growing demand from consumers, who are increasingly skeptical about artificial sweeteners, companies are beginning to capitalize on the opportunities that alternative natural sweeteners present.
"There's a huge impetus for the reduction of calories and carbohydrates, particularly in beverages," said Ventana's Mr. Avila. "Ninety-five percent of the market is dominated by high intensity artificial ingredients."
Acknowledging a sizeable demographic concerned about blood sugar, specifically Latinos, who are almost twice as likely to have diabetes compared to other ethnic groups, according to the ADA, Mr. Avila set out to create an all-natural, zero-calorie sweetener. In 2005 he launched Zsweet--which has attained GRAS status--blending erythritol, a sugar alcohol already popular in Japan, with natural fruit extracts for flavor enhancement.
Agave is another low-glycemic sweetener ideal for diabetics that is growing in popularity. Extracted from a South American cactus and often referred to as "honey water," the agave nectar or agave syrup is light in taste and color, but sweeter than honey.
While these natural sweeteners offer great promise for consumers, profitability, alongside palatability, currently presents a sizeable obstacle for businesses to overcome.
"Right now there is a huge Grand Canyon gulf between replacing artificial sweeteners with natural, low-calorie, low-glycemic ones because of cost," said Mr. Avila. "Secondary to that, holding up a huge part of innovation are marketers who are not prepared to invest the premium that consumers would ultimately pay for natural sweeteners."
But for health-conscious buyers, natural alternative products look, well, a lot sweeter. Retail sales for natural health and wellness products have reached more than $68 billion per year, according to the Natural Marketing Institute, Harleysville, PA.
"Whatever has been proven to be safe and regulatory allowable in foods is going to move that needle to a more balanced global market," Mr. Avila added.
But that balance will likely take several years and several iterations of product development, he predicted. "I think we're going to have to get through this second generation of natural high intensity sweeteners, which will be dominated by stevia," he said, estimating that it could take about three to five years. "Beyond that you'll see maturation and consolidation of sugar alternatives, driven by cost improvements."
Polyols and the Future of Functionality
Meanwhile, polyols, or sugar alcohols, like erythritol will grow at a faster rate than high intensity sweeteners, according to Freedonia Group. Numerous manufacturers have already registered success with a range of polyols, including BENEO-Palatinit, GmbH, Mannheim, Germany, which developed Isomalt, a beet sugar derivative with half the calories of sucrose.
"Isomalt has a mild sweetness profile similar to that of sucrose, but with a greater scope for flavor development," said Debra Bryant, director of business development and technical services for U.S. subsidiary BENEO-Palatinit Inc., Morris Plains, NJ. "Furthermore, it does not have any cooling effect and is completely devoid of any aftertaste. Isomalt also dissolves somewhat more slowly than sugar--so the sweet taste stays in the mouth longer, resulting in longer enjoyment."
Also characterized by its "tooth friendliness" and low-glycemic impact, isomalt has made an appearance in more than 1700 products, including a host of sugar-free candies.
Ms. Bryant predicts that demand for functional sweeteners will continue to thrive in the future, offering consumers alternatives to sugar that promote overall healthiness.
"With obesity and overweight problems reaching epidemic proportions worldwide, the good news is that more consumers are choosing foods that promote wellness in their lives," said Ms. Bryant. "At the same time, they don't want to give up flavor and texture, which raises the challenge of developing food products that fit into an active, health-oriented lifestyle but do not compromise on taste. Thus, functional carbohydrates like Palatinose and sugar replacers like isomalt will be on the rise because they provide health benefits and great taste at the same time. Whereas isomalt cuts down on calories, Palatinose promotes fat oxidation both in the resting state and during sporting activity. Of course it would be wrong to assume that the mere consumption of Palatinose is enough to reduce the waistline, but it makes it easier to target problem areas."
Palatinose, like sucrose and fructose, is fully digested and absorbed in the small intestine, providing the same total energy as most other sugars (4 kcal per gram). While hydrolysis and absorption are complete in the body, they occur much more slowly in comparison to sucrose, Ms. Bryant said, leading to a lower increase of blood glucose and insulin levels.
Businesses have a great opportunity to turn a profit if they can offer functional products at a reasonable price, said Mr. Altaffer, of RFI Ingredients. "I feel that providing consumers with a cost-viable, wholesome alternative to synthetic sweeteners is a significant leap forward," he said. "It may be that functional claims may arise from some of these sweeteners or there may be associations between the use of these sweeteners and functional benefits. One example of a functional benefit from a sweetener is Xylitol, which has established itself as a product that does not promote tooth decay."
Xylitol, a five-carbon sugar alcohol, is a naturally occurring sweetener found in the fibers of many fruits and vegetables. It can be extracted from corn, birch, raspberries and plums.
"Polyols will continue to benefit from their image as natural products rather than synthetic chemicals, and from continued interest in reducing sugar intake to combat obesity, tooth decay and diabetes," the Freedonia study predicts. "Sorbitol is the largest and most established product, and will register below average growth. Xylitol is expected to register above average advances. It has less than half the calories of sugar, but is equally sweet, making it a desirable tabletop replacement."
While demand continues to rise for alternative sweeteners, sugar remains one of the most actively traded commodities. The world produces about 122,229 metric tons of sugar per year, and its value will likely remain high due to its versatility. Sugar cane ethanol production has fueled a growing economy in Brazil and could play a role in the development of a post-Fidel Castro Cuba.
However, as U.S. healthcare spending is expected to balloon to $4.3 trillion in 2017, consumer focus will likely turn to the alternative sweeteners, as people access more information about their health and wellness benefits. And that will ultimately steer the industry.
"The market trends are being driven by natural and organic consumers," said Mr. Altaffer. "For many of these consumers there is a disconnect in buying natural, wholesome and organic foods that have synthetic additives in them, including sweeteners."
By Sean Moloughney
RELATED ARTICLE: Stevia's Journey on the Path Toward Approval
There are several hurdles that must be considered before an ingredient gains approval for use in foods and beverages.
The partnership between Coca-Cola and Cargill to develop and market their own stevia-based sweetener could ultimately revolutionize the market if stevia gains generally recognized as safe (GRAS) status or is approved as a food additive.
The process by which that would occur, however, is somewhat complicated, and could be quite lengthy.
"It's a long process and we are still in the development phase," said Cargill spokeswoman Anne Tucker. "It's a difficult process to move an ingredient from one classification to another. If it was easy it would have been done before."
Ingredients are granted GRAS status in one of two ways. Since 1997 FDA has employed a notification process whereby the agency evaluates submitted notices that have to offer sufficient scientific evidence that warrants a GRAS determination.
Qualified experts outside the government agency can also grant GRAS status if there is consensus that the available data demonstrate the substance is safe.
FDA has defined safe as "a reasonable certainty in the minds of competent scientists that the substance is not harmful under its intended conditions of use." It also qualifies that "specific data and information that demonstrate safety depend on the characteristics of the substance, the estimated dietary intake, and the population that will consume the substance."
"If a substance has been GRASed, there is no legal or regulatory requirement to go through the notification process and there is no legal obligation to even tell the FDA that a substance has been determined GRAS," said Dr. George Burdock, president of the toxicology consulting firm Burdock Group, Orlando, FL. "However, we recommend GRAS determinations to also go through the notification process (1) as a courtesy to FDA and for feedback from FDA, which can often supply very insightful feedback; and (2) to give the potential purchasers of the product a level of comfort that FDA has no objection to the GRAS determination."
The notification program is actually an interim procedure, pending finalization and publication of a final rule. However, FDA has received and responded to nearly 200 GRAS notices for a variety of substances over the past 10 years.
"I believe the notification process is an excellent concept and is worthy of finalizing," said Dr. Burdock. "But the proposed rule has some fatal flaws in it that need correcting before the rule should be finalized."
A supportable GRAS determination can be done in three months, he added, not including time for safety testing. The information on which the determination is made must be published in some form and available for public review for at least six months, according to FDA.
However, "It is not clear when the clock starts on publication of data," said Dr. Burdock, "whether the information must be in the public venue for six months before notification or if the information has been in the public venue for six months by the time FDA responds to the notification."
It could take several years for a substance to gain food additive status, though, as FDA employs a petition process, whereby a manufacturer must submit evidence that the proposed ingredient is safe for its intended use, following strict guidelines and principles set forth by FDA.
When evaluating petitions, FDA considers the composition and properties of the ingredient, the amount likely to be consumed, its probable effects, and various safety factors. It also seeks answers to the following questions:
* How will the product be consumed, and how much will be consumed?
* Who, including children, adults, men and women, will consume the ingredient, and how much will each group consume?
* Is the ingredient suitable for food processing and consumer use?
* What does the ingredient do as an additive to food?
* Has the product been shown not to cause adverse effects or cancer, not to affect reproduction, not to be stored in the body, not to be metabolized into other potentially unsafe products or not to cause allergic reactions at a relevant level of intake?
* How and where is the ingredient made, and who makes it?
Each new food additive is assigned an acceptable daily intake (ADI), which measures the amount that can be ingested over a lifetime without health risks. Once approved, FDA issues regulations for the additive, regarding the types of food in which it can be used, maximum amounts to be used, and identification on food labels.
"Many substances that started out as food additives also have been GRASed for additional uses, use levels or purposes, but the reverse is rarely true," said Dr. Burdock. "In fact, most substances added to food go through the GRAS process, rather than the food additive approval process as the latter requires several years to wind its way through FDA. Most GRAS approvals at Burdock Group take about 90 days."
How Coca-Cola and Cargill will attempt to get their stevia product approved remains to be seen. But no matter what route they pursue, they have to convince the experts.
"The jury is still out on stevia," said Dr. Burdock. "There was a 90-day toxicity study just published on stevia in February, but in my opinion this is only one part of a larger picture that needs to be completed before any judgment on safety can be made. There may also be additional data--both positive and adverse--in the literature of which I am not aware, but at this point in time I do not think all the questions on stevia have been answered."--S.M.
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|Title Annotation:||SWEETENERS UPDATE|
|Date:||Apr 1, 2008|
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