Alternative Sweetener Insights

Alternative Sweetener Insights

Led by greater market penetration and use of the stevia extract rebiana-A (reb-A), U.S. demand for alternative sweeteners will rise by 3.3 percent annually through 2015, according to a new report by market research firm Freedonia. The report indicates that the alternative sweetener market will reach $1.4 billion in sales within three years and that despite a sluggish diet soft drink market, high-intensity sweeteners, including aspartame and sucralose, will remain the largest selling products within the category.

The report states that consumer trends toward consumption of less-processed ingredients will drive the growth of sweeteners that can be marketed as “natural.” And though Freedonia expects new and natural alternative sweeteners to comprise a relatively small share of the market, the products will achieve the fastest growth and generate the most interest among beverage manufacturers and consumers, according to the report.

In addition to reb-A, the report notes that while the growth potential of luo han guo (monk fruit),  a sweetener approved by the FDA in 2010, remains to be seen, the product’s natural profile is on trend with current consumer purchasing decisions. Along the same lines, agave nectar – despite being a higher-calorie ingredient – is gaining greater acceptance as a natural alternative to high fructose corn syrup (HFCS).

Nevertheless, the report states that aspartame, the ubiquitous artificial sweetener used in a number of diet beverages, will maintain healthy – albeit somewhat restrained – demand as consumers continue to seek out lower calorie foods and

beverages. Additionally, the report forecasts greater gains for other artificial low-calorie sweeteners including acesulfame potassium (ace-K) and sucralose, as well as low-calorie polyols including erythritol and xylitol.

Tweeter-Dum?

Maybe 140 characters isn’t enough to explain the vagaries of the independent vs. in-house Pepsi bottler network. At least, that’s what rapper and beverage entrepreneur Curtis “50 Cent” Jackson learned last month following the following “tweet” from Jackson:

Chased down by the media, Pure Growth Partners’ co-founder Chris Clarke quickly lent some context” Jackson’s Twitter message.

According to Clarke, Street King had landed a key independent Pepsi distributor, the Honickman Group, which is known for its powerful execution in the New York and Mid-Atlantic regions through component companies Pepsi Bottling Co. of New York, Canada Dry of the Delaware Valley and Canada Dry of Potomac.

Street King, which is trying to offer itself as a younger, philanthropic alternative to 5-Hour Energy, is currently in 30,000 stores, including 7-Eleven and GNC. According to Clarke, it is on target to add two major drug chains by February and could be in as many as 80,000 stores in the next 90 days.

Both Jackson and Clarke are committing another $10 million to the company, with the hopes of raising another $10 million from outside investors in that same span.

As part of the brand message, the company says it will “feed a hungry child” with a donation to the United Nations World Food Program with the sale of every shot. According to Clarke, the company has already donated 3.5 million meals.

As for Jackson, the man did make millions and millions of dollars on the Glaceau deal. We think we could cut him some slack, if he’d offer to pay for it.

Tea is Growing

Growth in the distribution of tea drinks in convenience store and natural foods channels as well as rising consumer demand for Fair Trade Certified tea products, will help propel U.S. sales of tea and ready-to-drink tea products to reach $8.3 billion by 2014, according to a new MarketResearch.com report. The report estimates that the U.S. tea market will reach $6.5 billion in sales in 2011, up 5.2 percent over last year, and steadily rise over the next three years.

The report states that while supermarkets are the top retail channel for tea products, canned and bottled tea drinks are achieving double-digit growth in natural foods stores. Additionally, green tea – a longtime favorite among health conscious consumers – is now the second-most popular variety of tea behind black tea. The report also indicated that consumer interest in specialized types of tea, including chai, rooibos, and mate are on the rise.

MarketResearch.com also notes that the U.S. tea market has benefited from rapid growth in sales of Fair Trade Certified products. The report states that sales of Fair Trade tea products are up 38 percent over the past year as a number of tea brands, including Honest Tea and Republic of Tea, have begun converting their product lines to include Fair Trade certified ingredients.