Drink-makers seek "next-gen" sweeteners

Beverage industry insiders are prone to hyperbole when they describe the search for a natural, low-calorie sweetener that tastes as good as sugar. It's been called "the great race," the search for "the Holy Grail."

The overstatement is understandable. As concerns about fat and calories roil the U.S. soda market, drink companies want to claim and commercialize natural sweeteners that have the sweetness of sugar without the calories.

Next-generation natural sweeteners would help beverage companies skirt health concerns that have chipped away at soft drink sales in North America. They also could help companies discourage the push for "sugar taxes" on sodas, and they could lead to more products with not 10, not one, but zero calories.

High fructose corn syrup still pervades full-calorie beverages, and aspartame has been a mainstay of many diet drinks since the 1980s. But Coca-Cola, PepsiCo and their allies are pouring resources into the search for the next big thing.

"Anybody who comes up with an all-natural sweetener is going to have a major breakthrough -- as long as it has a good taste profile," said John Bello, founder of SoBe and currently an executive with a natural-drink company called Adina Holistics.

"The stakes are very high," said John Sicher, editor of Beverage Digest.

Stevia, an herb grown and used as a tea in South America for centuries, is the focal point of the competition today. Varieties of stevia are now grown in China and across South America. A stevia extract called rebiana or "Reb-A" has been introduced in a small group of drinks in the U.S. since late 2008, when the Food and Drug Administration certified it as safe for use as a general purpose sweetener. Before that, stevia-based ingredients were relegated to use as dietary supplements in the U.S.

In the United States, you can now find rebiana -- which Coca-Cola and PepsiCo say is derived from the sweetest part of the stevia leaf -- in beverages including Coca-Cola's Sprite Green, Vitaminwater Zero and Powerade Play for kids. It is also in some Minute Maid teas and Odwalla juices and smoothies. Overseas, rebiana is an ingredient in a handful of Coca-Cola beverages, and a variety of European nations may allow stevia to be used as a beverage ingredient within a year. (France already does.)

"This is our toddler who's walking really well right now," said Ann Tucker, spokeswoman for ingredient giant Cargill, which markets a stevia-based sweetener called Truvia. "We did a lot of work with Coke, developing the product as a specification. And a lot of the question was, if we could make this, would consumers want it? The answer was yes."

David Browne, senior analyst with research group Mintel, said the stevia market in the U.S. is ripe for exploration. "Gatorade with stevia, selling at Whole Foods, is going to be just a drop," he said. But "if PepsiCo and Coke don’t create these products, other companies will."

Mintel estimates the domestic market for stevia could be $2 billion by the end of 2011. That number includes powdered sweeteners for use in the kitchen and dining room.

"We're really starting to see some pent-up demand," said Jim Kempland, vice president of marketing for stevia producer GLG Life Tech, which supplies Cargill. GLG, with revenues of $42 million last year, has built three new stevia factories and expanded another in the last two years.

The chief executive of Merisant -- maker of Equal -- said in late 2008 that a stevia-based sweetener called PureVia would become the lion’s share of his company's business.

PepsiCo is using stevia derivatives in G2 Natural, a new extension in the Gatorade family, as well as Trop50, the first stevia-sweetened orange juice product. PepsiCo said Trop50, which became a $100 million brand in its first year, helped the company capture juice drinkers who were trying to cut calories by drinking less juice. PepsiCo also uses stevia extract in zero-calorie versions of SoBe Lifewater, one of the fastest-growing beverage brands in 2009. Lifewater was the first "enhanced water" in the U.S. to use a stevia ingredient.

Stevia is just one part of a pipeline of ingredients from plants that may give consumers an alternative to the artificial sugar substitute aspartame in some beverages, said Mehmood Khan, PepsiCo's chief scientific officer.

"There is a perception among some consumers that they would prefer a natural ingredient," said Khan. "It's a choice. There are other people who say, ‘If I am going to switch to low-calorie, I want a natural sweetener.' It's a personal taste."

Cargill is looking into monatin, a high-intensity sweetener derived from a plant that grows in South Africa. Cargill says monatin contains almost no calories.

Other possibilities include sweetness enhancers, which can accentuate the sweetness of a tiny amount of sugar and allow for the amount of sugar to be reduced in beverages, said Sicher. PepsiCo is even investigating an oats-based sweetener.

"There has been kind of a quest for the holy grail," said Gerry Khermouch, editor of Beverage Business Insights.

Kraft Foods is using rebiana from the stevia shrub in Crystal Light Pure Fitness, a 15-calorie fitness beverage mix for women. Honest Tea is working with stevia and expects to bring a zero-calorie organic drink to market later this year.

"Everybody's working on it," said Andrea Young, global director of marketing innovation at Coca-Cola. "There's a lot of interest."

But the next frontier -- carbonated soft drinks, and dark colas in particular -- remains unconquered for stevia derivatives. Scientists so far have not announced a way to make rebiana taste good in colas. Meanwhile, scientists are investigating other stevia derivatives besides Reb-A -- varieties with the cumbersome names like stevioside and Reb D, C, F and G.

"The Coca-Colas and the PepsiCos are continuing to invest a lot of resources and money in product development," said Browne. "There’s an influx of money and research and time, and maybe in the next year we’ll see some breakthroughs."

Coca-Cola says its work alongside Cargill helped prove that rebiana was safe to be designated as a food product, which allowed the first all-natural, zero-calorie sweetener to be rolled out for commercial use. Coca-Cola has worked with Cargill on stevia sweeteners for the better part of a decade.

"People like us have been working on this for ten years, and just waiting to get it out the door," said Gopal Krishnan, a senior director of global marketing, core innovation and new categories at Coca-Cola.

Coca-Cola and Cargill say they jointly supported a dozen scientific studies that eventually led to the favorable rebiana ruling from the FDA.

"It took five years and a bunch of money," said Grant DuBois, a research fellow at Coca-Cola and 18-year company veteran. Within 24 hours of the ruling, Coca-Cola launched the lemon-flavored Sprite Green in the U.S.

But stevia has its limitations. Its derivatives have varying degrees of bitter aftertaste, depending on the type of compound, the level of concentration and the type of drink being formulated. Rebiana, for example, has worked best in citrus-flavored drinks so far.

Years ago, Bello worked with a stevia extract as a possible flavoring for a drink called Lean. He was not impressed. "It didn't taste good, no matter what we did," he said. "I don't think stevia is the long-term answer."

DuBois said blending low-calorie sweeteners such as rebiana can help compensate for the bitter note of straight rebiana. He said rebiana can be mixed with a sugar alcohol called erythritol or other natural sweeteners from fruit juice or honey to make the final product taste more like sugar.

Rebiana is "markedly better when you're blending," he said. In isolation, "there is no such thing as a non-caloric sweetener that tastes like sugar. It just doesn't happen."

Stevia should not be painted with a broad brush, since there now 200 different varieties of the plant, said Cargill's Tucker. "The bitter and the licorice aftertaste that people would talk about, that was treating all stevia the same," she said.