Entering the European market for stevia

As a stevia exporter based in a developing country, it is essential that you comply with mandatory legal requirements in order to be allowed access to the European market. You are also advised to follow a number of additional requirements that European buyers have. This can increase your chances when exporting stevia to Europe. The European stevia market is segmented into the food sector, health products sector and cosmetics sector. The most common channel for stevia exporters are traders and importers.

1. What requirements must stevia extract comply with to be allowed on the European market?

What are mandatory requirements?

Stevia safety – European General Food Law, traceability, hygiene and control

As a stevia exporter, you must adhere to the General Food Law of the European Union (EU). Under the General Food Law’s legislative framework, you are legally required to have a traceability system in place throughout your entire supply chain.

If you are a stevia food processor, you must be compliant with EU legislation on the hygiene of foodstuffs outlined in Regulation (EC) 852/2004. This requires you to have a Hazard Analysis and Critical Control Point (HACCP) system in place which guarantees your stevia’s food safety.

The European Union recognises 11 steviol glycosides: stevioside; rebaudiosides A, B, C, D, E, F and M; steviolbioside; rubusoside; and dulcoside. According to EU regulations any commercial ingredient can be at least 95 percent of any combination of the recognised glycosides. A maximum of 5 percent non-steviol glycoside material is also permitted.

Contamination

In order for your stevia to enter the European market and for you to trade on it, you need to prove your stevia is not contaminated, or that any contamination is within levels set by the EU. For food products, the EU has set maximum residue levels (MRLs) for pesticides (EC Regulation 396/2005) and heavy metals (EC Regulation 1881/2006). You must ensure your stevia does not contain pesticides or heavy metals above the levels set by the EU. Non-compliance will result in your stevia not being allowed to enter the European market or its being withdrawn from the market.

According to Regulation (EU) No 231/2012, there are purity and contamination standards for steviol glycosides. These are shown in Table 1.

Table 1: Purity requirements for steviol glycosides

Total ash	Under 1%
Loss on drying	Under 6% (105°C, for two hours)
Residual solvents	Under 200 mg/kg methanol Under 5,000 mg/kg ethanol
Arsenic	Under 1 mg/kg
Lead	Under 1 mg/kg

Source: eur-lex.europa.eu

Labelling requirements

In order to export your stevia to the European market, you must comply with the European Union’s legislation on labelling of food additives and flavourings. The labelling requirements you must comply with depend on whether or not your stevia is intended for sale to the final consumer.

According to EU regulations, sweeteners such as stevia belong to the category of functional class sweetener. Regulation EC No 1129/2011 on the labelling of sweeteners such as stevia must include:

• the name of its category (i.e. 'sweetener');
• its specific name; or
• its E number.

According to Regulation (EU) 1169/2011 (EU 2011) on food information intended for consumers, any food containing a sweetener authorised by the EU is required to carry 'with sweetener(s)' as a statement accompanying the name of the food. Foods containing both added sugar(s) and sweetener(s) authorised by the EU have to carry 'with sugar(s) and sweetener(s)' as a statement accompanying the name of the food.

If it is a table-top sweetener, the description of the sweetener must include the term ‘…-based table-top sweetener', stating the name(s) of the sweetener(s) used in its composition. According to the Regulation (EU) No 1169/2011, table-top sweeteners are exempted from mandatory nutrition declaration.

If you export European Union organic certified stevia, you must comply with the EU’s related labelling requirements. Therefore, alongside the EU organic logo, you must display the code number of the control body, as well as where the agricultural raw materials have been farmed that compose the product.

Convention on Biological Diversity and the Access and Benefit-Sharing scheme

The Nagoya Protocol of the Convention on Biological Diversity (CBD) aims to ensure the benefits of genetic resources and long-established knowledge are shared equitably. It does so through its Access and Benefit-Sharing (ABS) scheme, which is particularly important for wild-collected ingredients.

The European Union has incorporated international treaties and protocols on using plant resources into European law. The Nagoya Protocol of the Convention on Biological Diversity (CBD) is among the important ones which have been translated into European law. It is also likely that it has been incorporated into your national laws.

If your country is a signatory of the Nagoya Protocol, you must abide by the protocol. Non-compliance can result in your stevia not being allowed to enter the European market.

Documentation

European stevia buyers request exporters to provide them with well-structured and organised product and company documentation. This will help you to access the European market and help in developing long-lasting trading relationships with European buyers. It will also  help make you appear well organised and well prepared to European buyers.

European stevia buyers usually want exporters to provide them in advance with Safety Data Sheets (SDS), containing:

• a product description
• classification
• hazard identification
• information on safety measures.

Secondly, European buyers want to be provided with Technical Data Sheets (TDS) containing:

• a product description
• product classification
• quality analysis
• information on applications
• certificates.

European buyers also request a Certification of Analysis (CoA) which contains analytical data from the product delivered. This should include the:

• Certification of Analysis matches;

• data mentioned in the TDS;
• pre-shipment sample that was approved by the buyer; and
• the contractual agreements with the buyer.

Consider acquiring SDS, TDS and CoA for your stevia and have them ready for European buyers. If you already have them, be sure to inform European buyers when you contact them.

What additional requirements do buyers often have?

Quality requirements for stevia

The majority of European food manufacturers require high-solubility stevia extracts, particularly drink manufacturers. Consider improving the solubility of your stevia extract by spray-drying or using a smaller size for pulverisation. Doing this will help you to access the European market. European buyers also prefer stevia extracts which are white in colour, rather than extracts with a light-yellow colour.

European buyers require stevia extracts with a consistent quality. Small differences in your stevia extracts production process will have a big effect on its flavour, particularly its sweetness as a finished product. So consider using standardised stevia production processes, as this reduces batch variance, and this is likely to result in higher product quality.

Certification

Food safety is important to European stevia buyers. European buyers therefore regularly demand additional certification to prove the added safety and quality of the stevia they buy. European buyers require certification of a food safety management system based on the European Union’s Hazard Analysis Critical Control Point (HACCP) system, as outlined in EU Regulation 852/2004 on hygiene of food stuffs.

The most common certifications demanded by European buyers are Food Safety Certification (FSSC 22000), International Food Safety (IFS) and Safe Quality Food (SFQ) certification.

Packaging and labelling requirements

European buyers of stevia often have common labelling requirements for the stevia they import. You should therefore consider stating the following information on your labels, since these are common labelling requirements that European buyers have.

• The name and address of exporter
• Product name
• Batch code
• Whether the product is for use in food products
• Best-before date
• Net weight in metric units
• Recommended storage conditions

Unless instructed otherwise by European buyers, you should use English for your labelling and also use European measurement units, such as kilograms. Therefore, next to the EU organic logo, you must display the code number of the control body, along with where the agricultural raw materials have been farmed that compose the product.

You should package your stevia in appropriate packaging materials before you export. Incorrectly packaged stevia is likely to deteriorate on its journey to the European market. So consider packaging your stevia in food-grade packaging materials, for example carton boxes and plastic bags.

Payment terms

There are different payment methods used in the stevia trade. The type of payment terms depend on various factors, such as the order volume and the length of your business relationship. Payment methods such as letters of credit and cash in advance are used. Cash in advance is used for lower volumes.

The letters of credit payment method is used for larger orders. Letters of credit (LC) are considered to be one of the safest payment terms. Once the business relationship is established, other payment methods can be used as well, such as open account and documentary collections. It is also common to use combinations of various payment methods.

Delivery terms

When agreeing delivery terms with European buyers, you must carefully consider the three important factors of delivery time, volume and cost. Failure to meet agreed delivery terms could result in the ending of your trading relationship with European buyers.

1. Delivery time: As an exporter, you must understand that European buyers prefer shorter delivery times. Air cargo is usually faster than sea freight. Air freight is also more reliable in regards to on-time delivery. Note that delivery times are likely to be longer because of the global COVID-19 pandemic; mandatory quarantine measures and restrictions on the movement of goods are reasons for this.
2. Delivery volume and quantity of order: The order volume is an important factor to consider when choosing a mode of transport. Larger quantities are often cheaper to ship by sea. With smaller volumes, air freight can be less expensive, as margins are smaller.
3. Cost of delivery method: Sea freight is estimated to usually be 4-6 times cheaper than air freight. This applies to larger volumes. It is unlikely that the price of your cargo will increase substantially if you increase the volume. Note that COVID-19 has increased the cost of air freight; this is likely to change once passenger flights resume normal operational service.

What are requirements for niche markets?

Certification of organic production

In recent years, there has been growing consumer demand for certified organic products in the European market. This trend is expected to continue. As a result, European buyers are increasingly looking for certified organic food ingredients.

In order to trade your stevia as organic on the European market, you must comply with European Union organic regulations. You can find information about the EU organic certification on the IFOAM website. Having your stevia certified organic will show European buyers that you are a reliable trading partner and that your stevia is high quality. You can use the certification of your stevia as a selling point when approaching European buyers.

Environmental and social sustainability

There is growing consumer demand in the European market for products which have been produced under environmentally and socially sustainable circumstances. There is growing demand from European buyers seeking to buy sustainable stevia.

As an exporter, one way you can do this is by gaining verification and certifications proving you meet environmental and social standards. Two sustainability standards that are relevant to sustainable stevia are the UNCTAD BioTrade Initiative with the related BioTrade Principles and Criteria, as well as the FairWild Standards. To prove you meet social standards, consider the FairForLife standard.

2. Through what channels can you get your stevia extract on the European market?

The commercial production of stevia extracts takes places in several countries around the world; important countries are China, Malaysia and Thailand. Although stevia has a wide range of use, its main application is in the food industry.

How is the end market segmented?

The European market for stevia can be segmented by end-user industries: food & drink, health products and personal care products.

Figure 1: Market segmentation of stevia market

Source: Various

Food and drinks industry

The European stevia market was worth USD 150 million in 2018, with it expected to grow at a healthy rate to reach USD 233 million by 2023. According to industry sources, some two thirds of total sales are to the food and beverage segment, where stevia is used as a food additive. Key drivers for stevia’s growing use are its low calorific value, its acceptable taste and healthy qualities, along with the increasing numbers of health-conscious and vegan consumers.

Stevia is widely used in the food and drinks industry because of its functional properties. Key functionalities are that it is a natural sweetener that does not increase blood sugar levels like traditional sugars, and that it does not contain calories. Stevia can be used as dried leaves or to make stevia extracts (steviol glycosides).

Dried stevia leaves are usually sold and packaged as tea bags or sold in bulk. It can be used in a wide range of foods and beverages, such as tea, coffee and cereals. Steviol glycosides are the chemical compounds extracted from stevia leaves. They are primarily used as food additives, serving mainly as sweeteners in fruit, dairy and soft drinks, yoghurts and confectionary products. Stevia extract is also used as a table-top sweetener.

Stevia can also be used as a liquid concentrate. It has a syrup-like consistency and is produced by boiling stevia leaves in water. Liquid stevia can also be made either by steeping stevia leaves in distilled water or a mix of water and grain alcohol, or by mixing stevia powder extract with water. Liquid stevia accounts for about 20 percent of the market.

Health product industry

Stevia is used by the health product industry because of its functional and active properties. Stevia’s key functional properties include it being a calorie-free, natural sweetener that is suitable for diabetics. Stevia is also known for its anti-inflammatory, anti-carcinogenic and anti-diarrhoeal properties. The pharmaceutical industry also uses stevia because of its ability to remove unwanted flavours in medication. Stevia’s active properties include its lowering blood glucose and blood pressure levels.

Personal care industry

Stevia is used by the cosmetic and personal care industry because of its active properties. The aqueous extract of stevia prevents the growth of bacteria that cause inflammation and the formation of acne. The water extract of stevia helps to soften the skin, along with dealing with wrinkles and skin inflammation. Stevia is used in oral care products such as toothpaste and mouthwash because of its anti-bacterial properties, which prevent bacteria causing tooth decay and plaque, as well as reducing the acid they produce. This means it protects against damage to the teeth and enamel.

This study focuses on stevia extracts used in the food sector.

Through what channels do stevia extracts end up on the end market?

Figure 1 shows the export value chain for stevia. The stevia production process typically occurs on an industrial scale in countries that have the right climatic conditions for this. The production process begins with stevia leaves being harvested, dried and then soaked in hot water. After several stages of filtering and centrifuging to concentrate the sweetest components of the leaf, the resulting purified stevia leaf extract is ready to be sold commercially. Stevia can also be exported in bulk as a raw material, from developing countries to European processors.

Importers and distributors

European distributors are an important channel for stevia exporters in developing countries. They source stevia from exporters directly or via agents. Distributors supply stevia to processors in Europe. These can include manufacturers of food and drink, health products and personal care products. Import volumes can range between tens of kilos to tonnes. Important distributors include Firmalis and Denk Ingredients.

Processors

There are a number of companies in the European market with integrated stevia supply chains. These are usually medium to large-size processing companies that supply other companies that use stevia as a sweetener in their products. Some processors source their raw materials directly from growers. For example, PureCircle cooperates with more than 300 growers in Paraguay, over 90 in China, and around 30 in Africa. These processors usually supply the  larger food and drink manufacturers. Cargill is another example of a stevia processor with an integrated supply chain. These processors invest resources into innovation of steviol glycosides to meet customer demand. The import volumes are usually around the hundreds or thousands of tonnes.

Agent

If you are a small exporter, it may be very useful to work with an agent to export to the European market. Agents are usually well connected with European distributors and wholesalers. Agents can be found in developing countries as well as in Europe, although it is not that common for companies to use agents in the European market.

Figure 2: Stevia export value chain

Source: Ecovia Intelligence

What is the most interesting channel for you?

European importers and distributors are the most interesting channel for stevia exporters in developing countries since they seem to be dealing with most volumes in the European market. Using importers can help you avoid issues related to logistics and other trade-related risks. As a small or medium-size stevia exporter, you can enter into long-term partnerships with them.

Importers also use resources to market your stevia to their customers on the European market. They usually provide storage and logistics facilities, which can help if your business is still in its early stages.

3. What competition do you face on the European stevia for food market?

What countries are you competing with?

Developing countries successfully exporting HS Code 29389090 products, under which stevia extract is exported to the European market, often share key strengths essential to their success. A key strength shared by countries listed in this section is that their governments provide support for the stevia industry. Leading stevia exporters also often have  favourable climatic conditions for stevia cultivation and a good infrastructure for its distribution and export.

China

According to Eurostat data, in 2018 China was the largest exporter of HS code 29389090 products to the European market; this is the code under which stevia extract is traded. One of China’s key strengths is that it has a well-established stevia industry. China’s stevia industry is developing, with the country making good progress in stevia cultivation and processing in the last few decades.

The Chinese government actively supports the stevia industry by providing financial support to stevia manufacturers, and helping with land acquisition and technology.

However, China’s stevia industry faces challenges. There are questions about its stevia quality, given that there have been cases of Chinese exporters inappropriately labelling the purity content of their stevia due to the lack of quality control practices. Chinese agricultural growers, including those cultivating stevia, face various challenges, including the loss of agricultural land, declining soil quality and pollution.

Chinese stevia suppliers can provide European buyers with large quantities of stevia. According to buyers surveyed for this study, the quality of stevia from China varies among suppliers. Some Chinese suppliers provide high-quality stevia for the European market.

Malaysia

According to Eurostat data from 2018, Malaysia was the second-largest exporter of HS code 29389090 products to the European market. Malaysia’s key strength is that its government supports the stevia industry. For example, as part of its Settlers’ Development Programme, the Federal Land Development Authority of Malaysia is working on stevia plant cultivation with PureCircle, a leading international stevia producer. PureCircle is providing its technical expertise in profitable stevia crop cultivation, thus helping to develop Malaysia’s stevia industry.

In addition, as part of a Malaysian government project to bring financial benefits to Malaysia’s rural population, the Malaysian Nuclear Agency is working to breed new types of stevia that produce greater yields.

According to European buyers, Malaysian stevia suppliers are well established and capable of supplying larger volumes to the European market. Malaysian suppliers are seen as reliable business partners. However, some buyers have experienced quality issues in the past.

Thailand

According to Eurostat data, in 2018 Thailand was the third-largest exporter of HS code 29389090 products to the European market. Thailand has an established stevia industry as it is extensively cultivated there. Another of Thailand’s key strengths is that its government supports the country’s stevia industry. For example, a Thai  government agency, the Office of the Board of Investment (or Thailand Board of Investment), recently approved two projects to develop the country’s stevia industry.

Morocco

Morocco is another leading exporter of stevia extract. Moroccan governmental support of stevia cultivation includes a project by the National Institute of Agricultural Research of Morocco and the Moroccan Ministry of Agriculture to develop Morocco’s stevia industry. Morocco’s stevia industry faces challenges; a major one is that its stevia industry is underdeveloped compared to other countries such as China.

Moroccan stevia is preferred as the country is closer to Europe than other major stevia suppliers. European buyers like the proximity as well as the lower environmental impact that Moroccan stevia offers. However, Moroccan suppliers cannot compete with larger suppliers of stevia in terms of volumes.

India

According to Eurostat data, in 2018 India was the fifth-largest exporter of HS code 29389090 products to the European market. The National Medicinal Plants Board (NMPB) announced a 20 percent subsidy on the cost of production to stevia farmers. The government of India is also working with the Indian Technology Innovation Management & Entrepreneurship Information Service to help Indian farmers and prospective farmers cultivate stevia.

However, the Indian stevia industry faces challenges, with a key challenge concerning Indian farmers lacking financial capital to start cultivating stevia, which involves high start-up costs.

Indian stevia exporters supply both leaves as well as extracts to the European market. There is a lack of extraction plants in India and raw material is also exported to countries such as China and Malaysia.

Venezuela

According to Eurostat data, in 2018 Venezuela was the sixth-largest exporter of HS code 29389090 products to the European market. The cultivation of stevia in Venezuela is established. The government and various NGOs support stevia cultivation through various projects, mainly as a way to empower local famers and communities.  

But Venezuela is in the midst of a humanitarian and economic crisis. This is causing challenges that include a high-risk business climate, strong political insecurity, a shortage of basic goods, hyperinflation, crime and corruption, along with poor infrastructure. As a result of these factors, it is unlikely Venezuelan producers will be very competitive in exporting stevia to the European market.

What companies are you competing with?

A number of established companies in developing countries are successfully exporting stevia to the European market. Two common features shared by successful exporters are their ability to supply high-quality stevia as well as to supply certified products.

Companies often have a professional website featuring well-prepared content which gives them further credibility. Usually their company website includes sections informing prospective buyers about who they are, how they source and process their stevia, along with its technical details and certifications. Professionally taken photographs will also accompany this.

Chinese companies

Sunrise Nutrachem Group is an established Chinese company. One of Sunrise Nutrachem Group’s key strengths is its ability to export high-quality European Union (EU) organic certified stevia to the European market. Organic certification demonstrates superior product quality.

Sunrise Nutrachem Group has International Organization for Standardization (ISO) 9001 certification, which shows it has quality management systems in place for its products, along with following good manufacturing practice (GMP) standards. This is another of the company’s key strengths, since it shows the superior quality of its products. The company also has advanced technical facilities, such as an in-house laboratory where it tests its products to ensure these are of the finest quality; this is another of its key strengths.

Sunrise Natrchem is seen as a reliable supplier of high-quality organic stevia to the European market. The company offers a wide range of stevia extracts in its product portfolio. This enables it to cater to the needs of European buyers.

Malaysian companies

Nutra Choice is an established Malaysian company exporting stevia extract. One of Nutra Choice’s key strengths is its ability to export high-quality ISO and GMP certified stevia to the European market. Having such certification demonstrates the superior quality of its products.

Natura Choice is seen as an established and reliable supplier of stevia extract. The quality of its stevia extracts is high and they offer a wide range of ingredients.

Thai companies

Almendra is headquartered in Singapore, but the production facility is in Thailand. The company is an established manufacturer of stevia extracts. The company produces a range of stevia extracts with different properties. The company has sales offices in Europe, as well as in other regions around the world.

The company is seen as a reliable business partner and stevia extracts supplier. It has long-term established business relationships with buyers and processors in Europe.

What products are you competing with?

Coconut sugar

Coconut sugar competes with stevia. Indonesia, Thailand and the Philippines are major producers of coconut sugar, since they have favourable conditions for its cultivation. One of coconut sugar’s key strengths is that it contains fewer calories than traditional sugars. Coconut sugar has several beneficial active properties. These include it containing important vitamins and minerals, such as potassium, magnesium, sodium and iron, along with it being a rich source of antioxidants. This is another of coconut sugar’s key strengths.

One of coconut sugar’s key weaknesses is its high calorie content compared to stevia. Coconut sugar has a high fructose content compared to stevia, which has no fructose in it. This is important because ingredients containing high levels of fructose could lead to serious health problems, such as obesity, type 2 diabetes and heart disease.

Agave nectar

Agave nectar, also referred to as agave syrup, is a product competing with stevia. Agave nectar is made from the juice of the agave plant which is native to southern parts of North America, Latin America and South America. One of agave nectar’s key strengths is that it has minimal effects on blood sugar and insulin levels, making it a suitable sugar alternative for diabetics.

Food and drink formulators and manufactures are familiar with agave nectar, since it is used in a variety of food products, such as granola, energy bars, chocolate and beverages; this is another of its key strengths. Agave nectar is also suitable for vegans, which is important because the European vegan products market is predicted to increase in the coming years. This is another of agave nectar’s key strengths.

A major weakness of agave syrup is that it contains fructose. Another weakness is it is that it can take up to six years for agave plants to reach maturity and to be able to extract agave nectar from these.

Monk fruit

Monk fruit sweetener is another product competing with stevia. The monk fruit plant is native to regions of Southeast Asia, such as Thailand and China. The plant is the raw material that monk fruit sweetener is created from. Monk fruit sweetener is a natural zero-calorie sweetener; this is one of its key strengths. This is all the more important given that there is growing demand in Europe for sweeteners, as well as for healthier and natural products.

Monk fruit sweetener contains high levels of unique antioxidants called mogrosides, which make it 100-250 times sweeter than regular sugar; this is another of its key strengths. Monk fruit sugar also contains beneficial active properties such as anti-microbial, anti-inflammatory and anti-carcinogenic properties.

However, monk fruit also has many weaknesses. It is difficult to grow and costly to export, it is not widely available and it is expensive. As a result, monk fruit sweetener does not pose a serious threat to stevia. However, if its weaknesses are addressed, it could become a threat in the future.

4. What are the prices for stevia on the European market?

Stevia prices are affected by factors such as supply fluctuations, weather conditions and crop yields. The price of stevia has been declining since 2015, when China started to become a major supplier. Increased supply is causing stevia prices to go down.

The FOB prices of stevia extracts was around 130 USD/kg in 2015. In early 2020, the FOB prices of stevia extract ranged between 70 USD/kg and 85 USD/kg. The Chinese stevia extract can be priced considerably cheaper at 30-50 USD/kg. The FOB prices for stevia leaves are around 2.5-8 USD/kg.

Figure 4: Estimated price breakdown of stevia in the European market

Source: Ecovia Intelligence

This study has been carried out on behalf of CBI by Ecovia Intelligence.

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