Stevia First Corp. (PINK:STVF) is a development phase agricultural biotech company based out of Yuba City, California. The company’s shares have been extremely volatile throughout the year with a 52-week range of $0.23 to $3.28. Stevia First has been focusing on developing and potentially marketing a higher quality stevia plant extract, used as an all natural, zero calorie sweetener. The purified sweet extract of about 90% steviosides, is said to be some 200-300 times sweeter than sugar and is rapidly securing a large portion of the zero calorie sweetener market. Since the FDA’s 2008 approval of stevia as a sweetener, stevia sales have grown rapidly. In 2008, stevia sales worldwide were approximately $21 million. Current estimates for worldwide sales range from $1-2 billion by 2014. Stevia-based Truvia is now the No. 2 branded sugar substitute in terms of sales, surpassing Equal and Sweet N’ Low, and is now second only to Splenda.
Stevia First Corporation (STVF) appears to be taking a methodical approach to addressing a couple of the U.S. stevia industry’s biggest concerns, consistent quality, and reliable supply. On April 25th of last year the company made one of two highly significant announcements with regard to its business model. The company announced it had leased 1000 acres of land to be used for its commercialization of stevia via a farm-based model using advanced propagation techniques to develop and grow a hardy, consistent supply of the stevia leaves. This press release complements a May 2nd announcement by Stevia First announcing field trials as part of the early development of the company’s agribusiness model of growing a reliable supply of stevia in the U.S. Although this research takes time and a bit of “trial and error”, the 1000 acres should certainly supply ample land to attempt various cultivars (types of stevia plants) under varying conditions to enable the company to determine which types and which growing conditions best suit the Yuba City area. The possible 2013 growing season initiation announcement should be a possibility that the author believes could be a share price mover if commercialization intent is announced.
As appealing as the agribusiness aspect of Stevia First’s business model appears to be, another announcement on August 29th added a bit of diversification to the company’s prospects. The company announced it had secured rights to a fermentation technology by which it could produce the steviol glycosides with minimal or no stevia leaves as a starting raw material. According to the press release, roughly 70% of stevia production costs come from the actual production of the stevia leaves. A production process that could stave off this cost requirement, along with the time savings of not having to wait for the stevia plants to grow, could prove to be a huge boon for the industry and for the now $20.5 million market cap company. Additionally, the process would be under tighter controls as pertaining to consistency and would provide a more reliable and consistent end product with none of the variability now present due to varying plant cultivars, growing conditions, and extraction procedures.
The fermentation licensing news sent shares soaring over a 3-day period following the announcement with shares that were trading below $0.30 skyrocketing to the $0.75 range. The share price has now settled back down to earth in the upper $0.30 range. Financing announced on October 30th provided the company with about $500,000 to fund its fermentation pilot plant runs and other business ventures. With news of the experimental runs in the fermentation process likely imminent, upside from the now-reduced levels could be substantial in the coming months with updates on its field trials’ progress also now expected. Stevia First Corporation should still be considered as a development phase company with its only current source of income being derived from investors.