GLOBAL: PureCircle bets on stevia sweetener boom
- FY profits fall due to capacity investment
- Group to form JV with British Sugar
- Expects rapid sales growth from 2011
Stevia plants hold the key to PureCircle's success
PureCircle has sacrificed short-term profits in order to prepare for an expected boom in food and drink industry demand for natural sweeteners derived from the stevia plant.
Demand for stevia sweeteners across the food and drink sector is set to transform PureCircle into a large multinational business over the next few years, the firm said today (27 July).
Net profits for the fiscal year to the end of June will show a drop on the previous year, PureCircle said, reflecting the firm's "heavy investment" to meet anticipated demand.
Stevia sweeteners have burst onto the soft drinks scene in the last 18 months, following regulatory clearance of several ranges from the US Food and Drug Administration (FDA). They are all-natural, contain zero calories and are up to 300 times sweeter than sucrose.
PureCircle, one of the world's leading suppliers of stevia sweeteners, said that 2010 sales are expected to be level with 2009. However, the firm is anticipating a leap from 2011 onwards, particularly because it expects its products to gain regulatory clearance for use in drinks across the EU within the next six months.
"All major food and beverage companies are now using stevia and most are now integrating stevia into their long-term sweetener strategies along with sugar and corn," said PureCircle.
"With more than 100 customers actively working on projects and with a high success rate for consumer product launches using PureCircle stevia, we expect sales to our existing customer base to grow strongly in FY 2011 and future years," said the company.
The firm announced today that it has signed a deal with British Sugar Group, a division of Associated British Foods, to create a 50-50 joint venture named The Natural Sweetness Company.
The deal combines PureCircle's technical know-how with British Sugar's global reach and the venture will operate in the UK, Spain, Portugal, Ireland, China and Africa.
"We look forward to working together to develop a range of products that can provide an attractive proposition for customers seeking lower calorie, natural sweetening solutions," said British Sugar CEO Mark Carr.
In February, PureCircle announced that it would form a joint venture with Imperial Sugar in the US, named Natural Sweet Ventures.
Last week, the US FDA cleared PureCircle's latest stevia sweetener, SG95, for use in food and drink production. "The new high purity sweetener delivers ... pricing well below sugar," said the group, which added that it will sell the product alongside its existing stevia range, which includes its Reb A 97.
"PureCircle's strategy is to build a large global business and we have invested heavily to do so," said the firm. "The current company infrastructure is designed to support a business with turnover of US$250m or more."
PureCircle added that it has a "significant" innovation pipeline and has begun a research project on stevia varieties with Michigan State University.
For more on stevia, click here.
The first management briefing of 2011, brought to you by Euromonitor, looks at what this year will bring for the global drinks industry. Ahead of this, just-drinks looks back to look forward: Our brie...
PepsiCo has closed the manufacturing lines at its bottling plant in Hampden, Baltimore resulting in the loss of 77 jobs....
PepsiCo China has confirmed that Beijing Yiqing Holding Co is to sell 15% of its stake in a joint-venture between the two firms....
- Are we about to see a no-alcohol Heineken?
- American whiskey does a vodka - Analysis
- A-B InBev's Global Presence - just The Facts
- Concha y Toro's H1 performance - Focus
- Battle continues for Pernod Ricard in US and China
- Craft more about stories than M&A for Diageo
- Diageo readies "not quite as sincere" Scotch
- The Glenlivet leapfrogs Glenfiddich
- Heineken integrates cider and beer
- “New normal” sees Pernod target premium in China
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Pernod Ricard SA - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report
- Global rum insights - market forecasts, product innovation and consumer trends research
- Global Vodka Market 2015-2019