- SweeGen, a manufacturer of non-caloric stevia sweeteners, will open four Food and Beverage Application Centers in North America, Europe, Asia-Pacific and Latin America, according to a company release.
- These centers are intended to increase collaboration with customers to produce products with reduced sugar profiles that reflect local taste, flavor and ingredient preferences. Each facility is equipped for product development in the beverage, dairy, confectionery, snack and bakery sectors.
- The flagship center in California opened earlier this year. Centers in Mexico, Europe and Asia-Pacific will open for business later in 2020.
Since sugar became public enemy No. 1, manufacturers everywhere have scrambled to find a suitable substitute that will still deliver the sweet taste people crave without the health concerns linked to sugar. While there are many options available on the market, artificial sweeteners have largely been on the chopping block. That has left natural sweeteners as an attractive option, and stevia has been a top competitor.
Newly introduced foods and beverages using stevia sweeteners grew by 31% in 2018. That's up from an 11% growth rate in 2017. Coca-Cola introduced stevia-sweetened soda in New Zealand in 2018. Danone's Light & Fit yogurt brand contains both stevia and sugar, and Nestlé launched a stevia-sweetened version of its Milo chocolate malt beverage in Australia last summer.
Although there is worldwide interest in stevia as a natural sweetener, the products customers are interested in and the flavors they will tolerate are not consistent across the globe. Stevia has a reputation for having a bad aftertaste, which has been likened to metal and licorice. As a result, stevia companies work to develop plant varieties and extract sweeteners that taste and behave more like sugar. By introducing application testing centers, SweeGen is offering CPG manufacturers the opportunity to experiment in real-time with masking agents and flavor profiles that appeal to regional demographics.
This approach is advantageous since it will offer manufacturers the ability to develop unique solutions with a local lens. This strategy can enable companies to use market research and their proximity to customers to target high-margin products that are increasingly popular with shoppers.
Nestlé Waters adopted a similar approach last year, transitioning brands management to more local oversight. This was seen as a method to respond to rapid growth in local water brands. Through local management of international brands, Nestlé can proactively pivot and cater to consumer demand. The company had previously restructured its infant nutrition arm by geography in 2018.
At the same time, such a localized approach could prove to be pricey and inefficient. This localized structure for a global company could also require manufacturing facilities to alter operations to produce niche products that regional consumers are demanding. The result is what was once a mass-produced sweetener could now have myriad individualized tweaks and adjustments that could potentially remove any savings SweeGen saw from the economies of scale associated with mass production.