Consumers demand stevia, set to become a blockbuster
With the introduction of a reformulated Sprite, Coca-Cola ( KO ) is taking a risk with one of its important brands to find new ways to retain customers more sensitive than ever about the adverse health effects of sugar and sweeteners. Artificial sweeteners make up a significant portion of the soft drink market, and both Coke's and PepsiCo's ( PEP ) last earnings reports revealed stagnant growth in major markets while emerging market growth is still proceeding apace. The need to find ways to stimulate demand in the US and Europe is becoming acute, and the drive toward higher perceived food quality is one vector to turn around shrinking margins.
Stevia, unlike aspartame, saccharin, or sucralose is an extract from a plant, and therefore carries the connotation of being natural , which is becoming more and more important in today's food and beverage market. Ben & Jerry's, a division of Unilever ( UL ), made headlines recently with its pledge to eschew the use of GMO foods in its ice cream's supply chain by 2015.
The new Sprite formulation is a direct consequence of stevia being approved for use in the EU in 2011. Pepsi has a reduced-sugar variant that it has introduced into Australia: Pepsi Next. While in the US, Pepsi Next relies on more common sweeteners like aspartame, in Australia, it uses stevia. PepsiCo appears to be using Australia as a test market while Coke is working the UK.
From a health perspective, stevia is metabolized both in the liver and the colon and its relative sweetness is similar to that of the other artificial sweeteners. The metabolic process in the liver relative to aspartame, which produces methanol , is far milder and therefore is less taxing overall.
Much of the criticism that has been thrown at stevia has been the same for all sugar substitutes, namely, that it tricks the body into expecting sugar and promoting higher blood insulin levels. But, the real issue is the general overload of the liver and the development of metabolic syndr