This is a great near, mid, and long term investment.
This article just came in today! More buzz--more proof that this will be a good investment near, mid, and long term.
Read it on Market Playground---search STVF in the search box:
Stevia is garnering more space on supermarket shelves. The zero calorie natural sweetener can be found in diet sodas, energy drinks, and reduced calorie sugar mixes. With The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP), and Starbucks Corporation (NASDAQ:SBUX) adding it to numerous product lines, stevia is having a profound effect on the sweetener market like no product has done since Splenda’s introduction. Stevia, a South American plant whose leaves contain various steviol glycosides, including the most desirable of them, Reb A, is not new. It has been used to sweeten foods and beverages in Latin America and Asia for decades and in South America for centuries. However, once the FDA approved Reb A as Generally Recognized As Safe (GRAS) for its use as a general purpose sweetener, US consumers’ and merchandisers’ awareness levels were heightened significantly. The EU approved stevia’s use as a sweetener at the end of 2011.
Stevia is clearly the new darling on the block, and there appears to be good reason for this surge in popularity. Stevia is natural and contains zero calories. Sugar and high fructose corn syrup (HFCS) comprise 80% of the $56 billion dollar sweetener market and are growing in-line with population expansion. Non-nutritive sweeteners, zero or low calorie sweeteners, are projected to grow at 5% a year from 2008-2015. Artificial sweeteners have been dominating the non-nutritive sweetener market, but in the past few years the trend has moved toward natural sweeteners. Sales of the artificial sweetener Splenda, the leading player in the US retail tabletop sugar substitute market, fell from a 61% share in 2007 to 45.5% in 2010; Equal dropped from 12.4% of the market in 2007 to 6.5% in 2010, and Sweet N’ Low fell from 13.2% in 2007 to 11% in 2010. As the artificial sweetener market trended downward, the market for natural sweeteners, such as stevia, has risen. Coca-Cola partnered with Cargill Inc. to produce a stevia product, Truvia, which saw sales jump 73.7% between 2009 and 2010 and has passed Sweet ‘N Low as the nation’s number two sugar substitute.
Not to be left out, PepsiCo combined with Merisant to develop its own stevia product, PureVia, which can be found alongside Truvia on the supermarket shelves and also in beverages, such as Sobe Lifewater. Stevia In The Raw, made by Cumberland Packing Corp., continues to grow in popularity with consumers. It had a dramatic surge from 2010-2011, with a 57% increase in overall U.S. sales, placing it second only to Truvia as the best-selling stevia brand on the market.
With the ever-expanding growth of stevia-based products, there are few options for food and beverage manufacturers, because they don’t actually grow stevia — they purchase it from abroad. Very little stevia is grown in the USA. Almost all the stevia is grown in China on small farms, followed by Vietnam, Indonesia, and South America. The reliability of product and quality of the sweetness (Reb A) can vary greatly. The giant food and beverage makers are aware of this and have concerns about the reliability of the product and supply line. That opens the door for growers in the USA to fill what might be a much needed void.
That’s where Stevia First Corp. (OTC:STVF) might just come in. This nano-cap company from the Central Valley in California may be positioning itself to be the leader in stevia development and production. Extracting the Reb A from the stevia leaves is a complex extraction and purification process. At this time, roughly 70% of the cost of stevia is attributed to the extraction of the sweet Reb A. Unfortunately, even to this day, many stevia extracts do not meet the taste consistency that consumers demand. That’s where Stevia First’s agreement with Ontario Canada’s Vineland Research and Innovation Centre (Vineland) might just be a game-changer in the industry. Scientists at Agriculture and Agri-Food Canada (AAFC) discovered and characterized the natural biochemical pathways that were involved in the production of the sweet components of the stevia leaf. Thus, it is possible to remove the sweet extract through a method other than growing of the plants and extracting the Reb A from the leaves — which, as earlier stated, is up to 70% of the costs. Instead, AAFC has developed a way to extract the stevia through fermentation-based technologies that are capable of converting low-cost plant materials into sweet steviol glycosides through controlled fermentation methods. These processes could bypass or significantly diminish the need for actual stevia leaf production. Vineland currently controls the intellectual property related to this technology, and Stevia First has entered into the licensing agreement with Vineland encompassing compositions and methods for producing steviol and steviol glycosides through those fermentation-based production methods. In addition to the license, Stevia First has entered into a separate consulting agreement with Vineland to assist with further development of the underlying intellectual property.
That announcement should raise the interest of investors because it is big news for the little company, considering that this discovery may have made it possible to cost-effectively produce a constant supply of stevia extract that will not vary in flavor. It also means that, if this process is developed, there may not be a need for the actual farming of the stevia plant to extract the small amount of Reb A. Considering the total global sweetener market was estimated at $58.3 billion in 2010, and the World Health Organization (WHO) estimates stevia intake could eventually replace 20-30% of all dietary sweeteners, it is no wonder the stock rose 70% after the announcement. Robert Brooke, Stevia First Corp.’s CEO, commented on the licensing agreement, “In the stevia industry, which has grown tremendously over the past several years, there is still significant unmet demand from multinational companies for a supply chain that can consistently produce great-tasting stevia extract in large quantities. The technology we’ve licensed represents a potential solution for this need, and one that our scientific team is eager to commercialize.”
Prior to its licensing agreement with Vineland, Stevia First leased 1000 acres dedicated to R&D and production of stevia in the Central Valley of California. With its R&D operational, Stevia First planned to be the first vertically-integrated stevia enterprise in the U.S. developing stevia seeds and tissue propagation high in Reb A. One of its goals, through crossbreeding high grade stevia seeds and seedlings, is to yield disease-resistant plants with leafs that have a higher content of the better-tasting steviol glycoside, Reb A. In its latest 10K filing the company noted: “developing a variety of stevia leaf with significantly higher Reb A content would allow for larger volumes of high-grade stevia extract with lower raw material (leaf) costs.” However, with the addition of the fermentation process, Stevia First can now add to its vertically integrated operation by adding a lab and developing the fermentation process to extract Reb A. Therefore, Stevia First now has two distinctly different methods of producing stevia products, the one all other growers is undertaking (growing the actual stevia plant), and the other being its innovative fermentation process.
Is Stevia really the answer for the dieter’s dream product? Only time will tell. However, there is little doubt that stevia is on a roll, and as an investor, sometimes grabbing hold and riding it to profits before the roll stops can produce tremendous gains. There are millions of people chomping at the bit for a sugar free or low calorie great tasting alternative to sugar or HFCS, and Reb A appears to be the answer for today. It is important to understand that Stevia First Corp. is a nano-cap development stage company with a $35.6 million market cap. Though its future looks promising, to date there are no sales. The stock had experienced a tremendous run up in March 2012 only to settle back to earth after the initial hype had subsided. Prior to the announcement of the license agreement with Vineland on August 29th, the stock had been trading in the upper $0.20s, but since then it’s traded in the mid $0.60 -$0.75 as investors see the possibilities. If Stevia First can grow quality stevia products in the USA, look for the stock price to continue to increase. If the fermentation process proves effective, look for a giant food or agriculture corporation to step in and either partner up or engage in an outright buyout. Either one would could send the stock shooting upward. As always, on any small development phase company, investors are advised to consider the risks and be willing to accept or anticipate the volatility in what might be a promising investment.