Ohio Ag Connection - Freedonia Analyst Weighs In on Coca-Cola's Plan for Stevia

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Freedonia Analyst Weighs In on Coca-Cola's Plan for Stevia
Ohio Ag Connection - 11/22/2017

A recent article in FoodDIVE featured the announcement from Coca-Cola that it plans to launch a new carbonated soft drink sweetened with stevia in 2018. Despite unsuccessful attempts to launch stevia-sweetened beverages in the past by the company and others, Coca-Cola believes they have overcome previous drawbacks associated with stevia to woo back former soft drink consumers who have moved to "healthier" beverages.

According to Freedonia Group analyst Christine O'Keefe, "Many consumers have become concerned with the prevalence of added sugar in their diets and its potential health impacts. Additionally, if the upcoming launch of the new Nutrition Facts label occurs as planned, by 2020 most foods and beverages will be required to list the amount of sugar added to the product. As a result, food and beverage manufacturers have been searching for an all natural, better for you sweetener that tastes similar to sugar."

Past beverage formulations using stevia or other natural alternative sweeteners have faced many challenges, in particular taste issues. Coca-Cola has worked with stevia producer Pure Circle to develop and supply better tasting Rebaudioside glycosides. However, the supply of these better tasting molecules is limited, and as a result Coca-Cola is only releasing the new stevia sweetened soda in a small non-US market. However, if this form of stevia hits a sweet note with consumers, and production limitations can be overcome, Coca-Cola can potentially woo back some consumers who stopped drinking carbonated soft drinks -- in the past 10 years carbonated soft drink production in the US has declined an average of 2% yearly, to 12.4 billion gallons in 2016.

The study by the Cleveland based company, Natural Alternative Sweeteners Market in the US, written by O'Keefe, has the overall demand for stevia forecast to reach $120 million in 2021, after yearly gains of over 11%.

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