Stevia One Step Closer To Food & Beverage Market (KO, PEP)

Jon C. Ogg
June 3, 2008
www.247wallst.com

If you have been a "diet" or zero calorie soft drink beverage drinker or have used artificial sweeteners on foods, there has always been the issue of "what are you putting into your body?". Most sugar-substitute sweeteners on the market have a myriad of chemicals or are derived from sugar. Finally this is about to change, and the change will be official.

Last year there was a report on CNBC citing the WSJ that Coca-Cola Co. (NYSE: KO) had teamed up with Cargill to develop and market a new calorie-free natural sweetener in an attempt to appeal to a growing band of health-conscious consumers. The problem is that this from the Stevia plant, and it is not approved as a "food additive" in the U.S. nor in Europe.

The most recognized brand for Stevia is SweetLeaf(R), under parent Wisdom Natural Brands(R) based in Gilbert, Arizona. Until now this had to be sold as a "dietary supplement" and could not be marketed as a sweetener because Stevia is not approved as a food additive in the U.S. nor in Europe. SweetLeaf(R) Sweetener(TM) has recently achieved GRAS status (generally recognized as safe) via outside independent review.

The regulatory and production challenges that hindered Coca-Cola's & Cargill's "rebania" product may soon be about to change. Stevia comes from an all natural plant root and has been used as an "artificial sugar-free and calorie-free sweetener" for years by many. Cargill's website links you to its own Truvia(tm), and Cargill made their announcement in mid-May calling it a sweetener.

This nod might not do anything for the production challenges and current supply limitations that may exist. But this a great start. Coca-Cola has many patents that may cover this, but you can be assured that Pepsico (NYSE: PEP) and other food and beverage makers may take an interest if they haven't already.

It's always touchy writing about a product you use or a product you like, because the objectivity becomes skewed. But this is something that is written about with some cheer. The truth is that some people love the flavor or sweetness of Stevia, and many don't. This won't lead to a category-killer product that kills all traditional soft drinks nor will it kill all diet drinks and other sugar substitutes or sweeteners in foods. But it will lead to a new category of sugar-substitute drinks and foods that have previously not been allowed on the market.