As Stevia producer PureCircle wallows in the red, industry observers may question whether the alternative sweetener is living up to the hype.

Natural sweeteners derived from stevia plants burst onto the scene in late 2008, when the US Food & Drug Administration cleared the use of several ranges. In April this year, meanwhile, the EU's Standing Committee on Food Chain and Animal Health voted to recommend the use of stevia as an ingredient in food and beverages.

The move indicates that there is a demand for stevia, particularly given that PepsiCo, The Coca-Cola Co and Dr Pepper Snapple Group are among those who have begun using the plant-derived sweetener. The pull of consumer demand for diet or low-sugar foods, as well as natural ingredients, has generated strong interest in stevia.

But, has the initial hysteria left a strange taste in the mouth?

PureCircle's full-year results this morning (19 September) tell a different story from those who have likened stevia to the 'Holy Grail' of sweeteners. The company swung into the red for its full-year, after deciding to reduce production until inventories are "better aligned with current market demand".

It looks as though the stevia producer has overestimated demand. While it would be wrong to herald the demise of stevia, it does also seem apparent that it is no magic bullet.

Several high-profile companies remain sceptical about how widely stevia can be used. Derek Yach, senior vice president of global health policy for PepsiCo, told just-drinks last year that uptake in the industry has been slow. "We have got a market that contains things called consumers and they tend to be rather fussy about taste," Yach said.

This is not to say that the stevia plant won't stake its claim as a mainstream sweetener source for years to come. But, there are signs that stevia, without more work in the lab, will not be used as widely as initially thought.