Consumer demand for alternatives to sugar and corn syrup has sent the food and beverage industry on a treasure hunt, where the grand prize is a natural, low- or no-calorie sweetener that's adaptable to multiple uses.
As recently as a year ago, the alternative sweetener market was dominated by three brands: Sweet 'N Low, Equal and Splenda. Now, companies ranging from Coca-Cola to Kraft Foods have formed partnerships with ingredient manufacturers to come up with new choices that address health conditions like obesity and diabetes.
“The sugar substitute market is feeling the impetus of the general trends towards health and wellness, and natural and organic,” said Tim Avila, chief executive of San Clemente, Calif.-based Ventana Health, the maker of an all-natural, zero-calorie sweetener called Zsweet. “The big companies in the food space are committing to this and throwing down the gauntlet.”
Those big companies include Cargill and Coca-Cola, which recently announced a partnership to develop a sugar substitute derived from the South American herb stevia. A flavor developer, Senomyx, is working on enhancers that let manufacturers cut down on the amount of sugar while maintaining the intensity of sweetness. And NutraSweet is preparing a national rollout of its next-generation, signature tabletop product after launching it in Wal-Mart stores this summer.
Observers say one of the big differences in this latest round of research and development is the emphasis on natural alternatives. Artificial sweeteners are still dogged by fears they cause cancer, a concern that's only become more pronounced as consumers move further into wellness.
A current favorite on the natural side is erythritol, a sugar alcohol present at low levels in many fruits, and at higher levels in fermented foods such as soy sauce, cheese, wine and beer. At Zsweet, Avila mixes it with a proprietary blend of fruit extracts; Merisant, the maker of Equal, adds fructose to erythritol for its Sweet Simplicity brand; Cargill also markets its own erythritol blend under the name Zerose.
“We recognized the benefits of erythritol in the 1980s and began building the manufacturing, food safety and application database that led to the eventual U.S. and EU approval and commercialization of the ingredient,” said Kathy Fortmann, director of polyols and dextrose global business at Cargill Sweetness Solutions.
As the natural side of the business develops, retailers can expect further differentiation in the category with the addition of organic versions.
“Less than 10% of the global sugar substitute market is truly natural and organic, but we see it has a lot of room to grow and is growing very rapidly,” said Avila. “It's a much smaller, fragmented market.”