Even the most conscious of weight-watchers find themselves on a slippery slope during Diwali as sugary treats and drinks weaken their resolve. But if there's one company that wants people to continue to indulge their sweet tooth but without the calories, it is PureCircle - the world's largest producer and innovator of stevia, a naturally sweet plant first discovered in Paraguay 200 years ago.
Promising 250-300 times the sweetness of sugar minus the calories, and championing itself as a healthier, natural alternative to artificial sweeteners, PureCircle is pitching stevia as India's answer to its chronic ill-health caused by a diet high in salt, sugar and fat, earning the country the infamous reputation of being “the diabetic capital of the world”.
A collaborative report by the Indian Council of Medical Research (ICMR), the Public Health Foundation of India (PHFI), Institute for Health Metrics and Evaluation (IHME) titled ‘India: Health of the Nation’s States — The India State-Level Disease Burden Initiative’ states 72 million Indians suffer from Type-2 diabetes today, a figure expected to almost double to 134 million by 2025 if current dietary trends continue.
But rising consciousness is prompting more Indians to rethink their unhealthy consumption habits. According to a 2017 report by Mintel Research, 85 percent Indians are looking to cut back on sugar and 78 percent on the use of artificial sweeteners, a cue that bodes well for PureCircle, which accounts for 75 percent of the global stevia market worth $200-250 million. This market is growing at a CAGR (Compound annual growth rate) of 20-25 percent.PureCircle says it has only just begun to scratch the surface in India, an important market in the company’s fastest growing region – the Asia Pacific.
India’s FSSAI (Food Safety and Standards Authority of India) cleared the decks for the use of stevia in November 2015, four years after the scientific panel for food additives at the country's apex food regulator first recommended its usage.
In 2016, PureCircle forayed into the country and in 2017, set up its first South Asia lab in Gurugram, Haryana. The company has partnered with leading food and beverage players to formulate stevia variants for popular beverage brands including PepsiCo's 7Up and Tropicana, Coca-Cola's Mazaa Gold, Tata Green Tea and Danone Yakult Probiotics and Zydus's Sugar-Free Sweeteners.
“Stevia has gone from being a niche to finding itself in four out of 10 products, which is making them mainstream. And you can see closer home to India, in the last 18 months that PureCircle has been operational in India, there's been a plethora of products and categories which have embraced stevia,” said Navneet Singh, vice president - Asia Pacific and Head of South Asia region at PureCircle.
This year, hot beverages, chocolate and dairy will be leading categories for product launches with stevia. The company is also hoping Stevia finds itself a regular space in homes by replacing sugar and artificial sweeteners, with work underway on a host of table-top products.
The APAC region is observed to be the fastest growing region for stevia due to growing awareness and high investment by manufacturers in emerging countries, says a report by Market Research Future.
PureCircle says new global product launches grew 27 percent in the first half of 2018 over the same period in 2017, with the APAC region accounting for 42 percent, followed by Europe at 22 percent. That said, PureCircle has a larger objective in India - to cultivate its proprietary Starleaf variety and double farm incomes in line with Prime Minister Narendra Modi's vision for 2022.In January, Modi promised farmers a good price for their harvest and low input costs as his government initiatives to double their incomes over five years.
To that end, the company has begun conducting agricultural trials in Punjab, Uttar Pradesh, Jharkhand, Madhya Pradesh and Tamil Nadu.
PureCircle says India's topography and climatic conditions are ideal for stevia cultivation, requiring 1/5th the land required for cane production and 90 percent less water, a boon to water-scarce states.
“Stevia allows farmers to engage themselves in a far better livelihood than with any other cash crop or natural sweetener. The advantage with Stevia is 2-fold. When we contract farm, we specifically grow the Starleaf variety and farmers in India are known to grow three harvests in a year. In case of contract farming, we guarantee buyback, offering farmers an income of $2.5/ kg of stevia dry leaf,” says Singh.
“PureCircle is looking for the next 5,000 hectares in India to plant stevia,” he adds. The company is also sizing up India for a manufacturing plant in the future. “We have pledged $200 million for India manufacturing, but this is when we create the demand,” says Singh. The company has committed a total of $600 million to build up the supply chain the APAC region.
Government initiatives are giving a fillip to the company's ambitions for India. Encouraging citizens to rethink their intake of sugar, salt and oil, the Municipal Corporation of Greater Mumbai (MCGM) launched its
Ek Chammach Kam initiative in June. In a similar attempt, the FSSAI launched the 'Eat Right Movement' earlier this year, with actor Rajkummar Rao urging citizens to cut back on sugar intake in a campaign titled Aaj Se Thoda Kam.
But the path to success in India for low-calorie sweeteners is riddled with challenges, and stevia is unlikely to have it any different.
A 2017 report by research firm Mintel says low-calorie sweeteners account for less than 1 percent of retail volume sales in India and this share has been declining - mostly because of the perception that sweeteners are for diabetics, a taste that does not appeal to many and a lack of understanding how to use the product.
Brand consultant Alpana Parida of Mumbai-based DY Works says unless stevia makes itself relevant to Indian consumers, a breakthrough will be hard to come by. Interestingly, Stevia is known as
Meethi Tulsi or Meethi Patti in Hindi and Madhu Patra in Sanskrit.
“A lot of products that come from outside the country, unless they contextualize in the Indian cultural set up and integrate with Indian households, they find it very difficult to break open,” says Parida.
“Stevia is not being seen as a better sugar, it is being seen as a different sweetener and it is in that positioning that lies the entire difference for the product to become much bigger.”
That's probably why Indian brands have held off from calling stevia as the big game changer. Globally, stevia products enjoy dominant branding, but Indian brands that have embraced stevia have done so without much ado. A closer look at product labels of 7Up, Tropicana and Maaza Gold simply mention 'Sweetener 960', the code name ascribed by the FSSAI to 'Steviol Glycoside', the compound that lends the sweet taste to stevia.
The bitter aftertaste of stevia also means brands need to use stevia extracts mixed with other artificial sweeteners such as Acesulfame K. Sucralose, Aspartame, or plain old sugar. Competing with the cost-competitiveness of India's sugar industry, the second largest in the world, is also a challenge, one that PureCircle admits to.
Singh of PureCircle says, “We have products that range across price points; we have products that can easily match the prices of sugar and up to a certain extent, replacing sugar, our products can even give cost advantages versus sugar. It's only when you go deeper into sugar reductions, manufacturers find challenges of bulking agents, and that's when an additional cast comes in to bring an even more expensive bulking agent than sugar. Traditionally, sugar In India has been the cheapest bulking agent.”
Pitted against the $60 billion sugar industry and the $1 billion high-intensity artificial sweetener market, the global stevia market still has long miles to go, with 18,000 products launched globally till date.
But with the global F&B industry waging a war on sugar to fight obesity and meet carbon emission targets by committing to reduce sugar levels across their portfolios, stevia is hoping to find a fertile field for sustainable growth.
The global picture look promising. Data by PureCircle shows in 2012, new product launches with Stevia accounted for 16 percent, while those with aspartame stood at 36 percent.
Cut to 2018, while new product launches with stevia grew to 31 percent, those with aspartame slowed to 22 percent. This means a third of all F&B products launched with high-intensity sweeteners today have stevia, a number that has doubled since 2012.With revenues of $119 million and a net profit of $7.2 million in 2017, PureCircle is listed on the London Stock Exchange. The company’s manufacturing plant at Enstek, Malaysia was expanded in 2017 through an investment of $42 million. PureCircle has 72 plus stevia related patents with 200 pending.