The European market potential for stevia

Demand for stevia from the European food industry is growing. Stevia is used mainly as a sweetener in food and drink products, but it is also used in health products because of its beneficial properties. Growth is driven by rising awareness of stevia, as well as consumer demand for healthy products.

1. Product description

Stevia rebaudiana, more commonly known as stevia refers to around 240 species of herbs and shrubs in the sunflower family Asteraceae. Stevia is used as a sweetener and sugar replacer which is obtained from the green leaves of the stevia rebaudiana plant species.

Stevia is native to subtropical and tropical regions in western North America to South America, in countries such as Brazil and Paraguay. This is because these regions have a humid and wet environment ideal for stevia cultivation. Stevia is also grown in several Asian countries, such as the Philippines, Thailand, Indonesia and Malaysia.

Stevia has been used for more than 1500 years by the Guaraní people of Brazil and Paraguay who use it as a sweetener in herbal teas. Recently, chemists have scientifically isolated stevia’s sweetening properties.

Stevia has various health properties, such as lowering blood glucose and blood pressure levels. Stevia is also recognised as having anti-inflammatory, anti-tumour and anti-diarrheal properties. Stevia also has zero calories, making it popular for use in food and beverage products.

Stevia can be used as a powder, a liquid or as a leaf. The most common form of stevia is liquid. A growing number of liquid table top sweeteners in Europe are using stevia. The second most common form is powder. It is expected that the share of powdered stevia will increase in the future because of growing applications in the food and beverage industry. Most applications are in baked goods, dairy products, beverages, confectionery products and nutritional supplements.

Stevia leaf extract is traded under HS Code 2938909090, which refers to other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives. Stevia leaf powder is traded under HS Code 12119099, which refers to plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or dried, whether or not cut, crushed or powdered - Other. This report examines stevia applications in the European natural food industry.

Commercially available stevia extracts vary in composition with respect to the ratios of the steviol glycosides and other constituents. This is because the extract contains at least ten steviol glycosides in different concentrations. These include:

• Stevioside
• Steviolbioside
• Rubusoside
• Dulcoside A
• Rebaudioside A
• Rebaudioside B
• Rebaudioside C
• Rebaudioside D
• Rebaudioside E
• Rebaudioside F

These steviol glycosides differ in their sweetening power, taste and molecular structure. Stevioside is the largest part of the steviol glycosides in the plant. Stevioside and Rebaudioside A are responsible for the sweet taste of stevia extract.

2. What makes Europe an interesting market for stevia?

The European food and drink market offers export opportunities for stevia suppliers in developing countries. Demand is driven by rising consumer demand for healthier and natural food products. Regulatory changes in the EU also stimulate demand for stevia in Europe.

The European food and drink market is one of the biggest in the world. According to FoodDrink Europe, in 2017, the European food and drink sector generated EUR 1,1192 billion in revenue. The beverage sector has about a 14 percent share. Natural sweeteners are increasingly used in place of sugar in food and beverage products. According to a 2016 survey of 2,500 European consumers, about 60 percent of adults monitor how much sugar they consume.

Consumer awareness of stevia is rising in European consumers, whilst applications in food and drink products are widening. European consumers are increasingly looking for healthier and natural products. For example, the European organic food and drink market is growing at a healthy rate, as shown in table 1.

Table 1: The European Market for Conventional and Organic Food & Drink: Market Growth Rates, 2012-2017

	European Food and Drink Market  mEUR	% Change	European Organic Food and Drink Market mEUR	% Change
2012	1,062		20.9
2013	1,090	2.64%	22.1	5.74%
2014	1,095	0.46%	24	8.60%
2015	1,115	1.83%	27.4	14.17%
2016	1,118	0.27%	30.9	12.77%
2017	1,192	6.62%	34.3	11.00%

Source: Food and Drink Europe/FIBL
Note: All figures are rounded

The European sweeteners market was worth USD 11.5 billion in 2017. The market is forecast to grow by a compound annual growth rate of 1.7 percent to reach USD 13 billion in 2023. The market is growing in value partly because of growing demand for natural sweeteners.

Stevia is one of the most popular natural sweeteners. In 2018 the European market for stevia reached USD 150.8 million. The market is expected to grow by a compound annual growth rate of 9.15 percent, reaching USD 233.6 million in 2023. The European stevia market grew substantially after the EU approved the use of stevia in November 2011. The global stevia market was worth USD 539 Million in 2019 and is expected to grow to 900 million USD by 2025, according to the IMARC group.

The major drivers of growth in the stevia market are rising consumer demand for healthier and natural products, increasing rates of obesity and diabetes in Europe, and growing popularity of flavoured soft drinks.

After the approval of stevia extracts for use in the European Union in November 2011, the market has grown rapidly. However, the market relies on imports of stevia leaves to produce stevia-based products. It has zero calories and a high protein content, making it a favoured ingredient in the healthy drinks and sports nutrition product markets. Figure 1 shows imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives with an HS Code 29389090.

Figure 1: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to Europe, 2014-2018

Source: Eurostat

The imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to Europe increased both in value and volume between 2014 and 2018. The value and volume of imports from outside of Europe has been increasing, compared to imports from within the EU. It is expected that this trend will continue in the near future. Demand for alternative sweeteners is increasing because of rising awareness and health consciousness among consumers.

In October 2016, an amendment to the EU food additives regulation removed a rule whereby stevia blends were required to contain at least 75 percent stevioside or reb A. This move also added reb M to the list of permitted steviol glycosides. It also enabled food and beverage manufacturers to use a combination of the 11 approved steviol glycosides in any proportions in its products. This amendment allows further sugar reductions in food and beverage formulations and improvements in taste.

According to industry sources, demand for stevia is expected to continue growing in the foreseeable future. Awareness of stevia is increasing in companies; for example, Pepsi and Coca-Cola have started using stevia as a sweetener in their soft drinks. Other food and drink manufacturers are also using stevia in products such as yoghurts, confectionary, and processed products like ketchup.

One of the major restraints of market growth is competing sweeteners with similar properties. For example, barley malts, maple syrup, agave juice and coconut sugar.

Suppliers of stevia in developing countries should target the European market as it offers a wide range of opportunities for natural sweeteners. It is expected that demand for stevia will continue to rise over the forecast period. With easing EU regulations, demand for stevia will grow further as more food & beverage companies use the sweetener.

3. Which European countries offer most opportunities for stevia?

Germany, France, the Netherlands, the UK, Italy and Spain are considered the most promising country markets for stevia exporters in developing countries. These countries have the biggest food and drink industries and their consumers have high awareness of natural sweeteners. France and Spain grow stevia in their countries.

Table 2: Leading country markets for stevia in Europe

Country	Food and Drink Market bnEUR	% Growth	Organic Food and Drink Market bnEUR	% Growth	Market Players
France	228.1	+26.8%	7.9	+17.6%	Stevia Natura, Provia Sud, STEVIA SAS, Firmalis, Oviatis
Germany	203.9	+19%	10	+5.9%	Denk Ingredients, Stevia Group, Steviavida, Organic Stevia GmbH
Spain	118.8	+16.4%	1.9	+12.9%	Mercostevia, Azucares Prieto
The UK	118.7	+3.8%	2.3	+5.3%	Tate & Lyle, Prinova
The Netherlands	76.7	+4.2%	1.2	+2.9%	Cargill, Hyet Sweet
Italy	138.6	+4.1%	3.1	+18.6%	Ambrogioitalia Srl, Moralco

Source: Food and Drink Europe/FIBL / Ecovia Intelligence
Note: All figures are rounded

France

Table 3: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to France, 2014-2018

2018	000 Tonnes	% Change Volume (2014-2018)	m EUR	% Change Value (2014-2018)	Exporters	Important Market Players
HSC: 29389090	18.9	25%	48.0	98%	China (77%), Spain (5.3%), Malaysia (5 %),	Stevia Natura, Provia Sud, STEVIA SAS, Firmalis, Oviatis

Source: Eurostat

Table 3 shows that the imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives have increased by value and volume between 2014 and 2018. Demand is expected to continue to increase over the forecast period. France has the largest food and drink market in terms of turnover. This presents an opportunity for stevia suppliers in developing countries.

Stevia Natura is one of the leading stevia producers in France. The company offers a wide range of stevia extracts, such as Stevial origin, Stevial classic, Stevial infusion and Stevial pharma. Provia Sud and STEVIA SAS are other domestic producer of stevia. Firmalis is an important trader of stevia.

France has the second largest organic food and drink market in Europe. The demand for organic products has been increasing over the last decade. That growth is expected to continue in the near future. Market growth is stimulating demand for organic stevia since many organic food and drink companies tend to use sugar alternatives. Consumers who buy organic products are health conscious and seek natural products. The French company Oviatis supplies organic stevia extracts and leaves.

It is expected that demand for stevia will increase further in the future. Growth is driven by growing consumer demand for healthier and more natural food and drink products. Suppliers of stevia in developing countries should target the French market as it offers a lot of opportunities. This market is also attractive for organic stevia suppliers.

Germany

Table 4: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to Germany, 2014-2018

2018	000 Tonnes	% Change Volume (2014-2018)	m EUR	% Change Value (2014-2018)	Exporters	Important Market Players
HSC: 29389090	10.4	19%	47.4	91%	Sweden (58.7%), China (21.5%), Slovakia (7.2%),	Denk Ingredients, Stevia Group, Steviavida, Organic Stevia GmbH

Source: Eurostat

Demand for other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives has been increasing in the German market. The volume and value of imports has increased at double-digit growth rates. Germany has a robust food processing sector, as well as high awareness among consumers. It is expected that this trend is set to continue.

Germany has the largest market for stevia-based sweeteners in Europe. The country has the second largest food and drink sector in Europe. The German organic food market is the largest in Europe.

Leading importers of stevia include Denk Ingredients and Stevia Group. There are also some suppliers of stevia extracts in Germany, such as Steviavida. Some of the mainstream food and drink companies that use stevia in their formulations include Dr. August Oetker Nahrugsmittel KG, Naturbursche Getranke GmbH, Hengstenber GmbH and Fritz-kola GmbH. There is also growing demand for organic stevia. A leading supplier of organic stevia is Organic Stevia GmbH.

In Germany, stevia can be purchased at mainstream retailers such as Rewe and Edeka. Organic stevia products are usually found at specialist retailers. German consumers have very high awareness and are familiar with the sweetener. Figure 1 shows that around half of German consumers have used stevia or have eaten a product containing stevia.

Suppliers of stevia from developing countries should target the German market as demand is expected to increase further. German consumers are aware of stevia and are seeking natural and high-quality food and drink products. German consumers are also environmentally conscious and since the use of stevia can reduce the environmental footprint of finished products, its use will increase. Suppliers of organic stevia should consider targeting the German market.

Spain

Table 5: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to Spain, 2014-2018

2018	000 Tonnes	% Change Volume (2014-2018)	m EUR	% Change Value (2014-2018)	Exporters	Important Market Players
HSC: 29389090	8.8	24%	26.1	74%	China (78.7%), France (12.2%), Portugal (4.4%)	Mercostevia, Azucares Prieto

Source: Eurostat

Spain is the third leading importer of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to Europe. The imports have been increasing in the last 5 years.

Spain has the fifth largest food and drink market in Europe. The organic food and drink market in Spain is growing each year. There is also some production of stevia in Spain. Leading importers of stevia include Mercostevia and Azucares Prieto.

It is expected that demand for stevia on the Spanish market will be driven by increasing consumer awareness and rising demand for healthier and more natural food and drink products. Exporters of stevia from developing countries should target the Spanish market.

The UK

Table 6: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to the UK, 2014-2018

2018	000 Tonnes	% Change Volume (2014-2018)	m EUR	% Change Value (2014-2018)	Exporters	Important Market Players
HSC: 29389090	5.8	19%	39.8	222%	Malaysia (48%), Thailand (12.8%), Sweden (10.9%)	Tate & Lyle, Prinova

Source: Eurostat

The imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to the UK have shown an increase between 2014 and 2018. The UK has one of the largest consumer markets in Europe. It also has a strong food processing sector. The increasing awareness of UK consumers is expected to generate demand for alternative sweeteners, such as stevia, in the future.

According to the Food and Drink Federation, in 2018, the UK food and beverage sector generated about EUR 114.3 billion in revenue. It has the fourth largest food and drink sector in Europe. There are around 6,800 food and drink manufacturers in the UK. The market for organic food and drink is also growing. This is driven by rising consumer awareness and growing demand for natural and healthier food and drink products.

The UK is home to the headquarters of major European stevia supplier Tate & Lyle. The company has a portfolio of stevia-derived food additives. In 2019, Tate & Lyle launched a project in partnership with Sweet Green Fields and Earthwatch to assess the sustainability of its stevia supply chain. Other stevia importers include Prinova. Some of the major mainstream retailers in the UK, such as Tesco, are marketing stevia under their private label.

Demand for stevia in the UK is also driven by regulations. In 2018, the UK government introduced its so called “Sugar Tax” on soft drinks. It was introduced as a way to tackle childhood obesity. Around 50 percent of soft drinks manufacturers have reduced their sugar content because of this.

Suppliers of stevia from developing countries should target buyers in the UK. Demand for stevia is driven by rising consumer awareness and growing demand for natural and healthier products. However, a potential no-deal Brexit may disrupt supply chains for ingredients, such as stevia. It may take some time to re-negotiate trade deals with developing countries.

The Netherlands

Table 7: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to the Netherlands, 2014-2018

2018	000 Tonnes	% Change Volume (2014-2018)	m EUR	% Change Value (2014-2018)	Exporters	Important Market Players
HSC: 29389090	3.2	201%	20.4	246%	China (41.4%), France (19.5%), Sweden (16.7%),	Cargill, Hyet Sweet

Source: Eurostat

The Netherlands is a significant entry point of raw materials into Europe. The imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives recorded an increase of more than 200 percent in the last 5 years. This is partly because most raw materials are re-exported to other European countries. The Netherlands also has some significant processors of stevia. It is expected that the growth trend will continue in the near future.

The European headquarters of an important stevia extract manufacturer Cargill is located in the Netherlands. The company supplies a wide portfolio of stevia extracts, including Truvia Stevia Leaf Extract and ViaTech Stevia Ingredients. In 2019, the Cargill-DSM joint venture Avansya started commercial production of EverSweet stevia sweetener. Van Wankum Ingredients is a leading importer of stevia in the Netherlands. The Chinese stevia company Hyet Sweet has its European headquarters in the Netherlands.

The Netherlands is likely to remain an important country for imports of stevia from developing countries. Despite a relatively small food and drink sector, it is an important entry point for raw materials into Europe. Suppliers of stevia should target buyers in the Netherlands.

Italy

Table 8: Imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives to Italy, 2014-2018

2018	000 Tonnes	% Change Volume (2014-2018)	m EUR	% Change Value (2014-2018)	Exporters	Important Market Players
HSC: 29389090	3.1	201%	11.8	-50%	UK (30.6%), Sweden (23.7%), China (21%)	Ambrogioitalia Srl, Moralco

Source: Eurostat

The imports of other glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives have significantly increased in volume. The value decreased as the intra-EU import share decreased over the years.

Italy has one of the largest consumer markets in Europe. It has the third largest food and beverage market in Europe. It also has one of the most important markets for organic products. The organic food market has been growing at a healthy pace. Italian consumers tend to seek high-quality natural products.

Some of the major suppliers of stevia in Italy include Ambrogioitalia Srl and Moralco. In Italy, stevia products and sweeteners are sold at mainstream retailers. Organic stevia products are usually sold at specialist retailers.

The Italian market offers good prospects for stevia exporters in developing countries. Stevia powder is mainly sold at specialist retailers. Organic certified stevia has good potential in the Italian market.

4. Which trends offer opportunities on the European stevia market?

Growing demand for natural sweeteners is stimulating demand for stevia in Europe. There is a growing trend towards local sourcing which is affecting the supply of stevia in the European market.

Growing consumer awareness towards health is changing food habits

Levels of obesity and diabetes are increasing in Europe, with levels of obesity predicted to continue to rise in the next few years. Higher levels of obesity lead to related diseases, such as diabetes, heart disease, stroke and several forms of cancer. European consumers are becoming more aware about their health, generating higher demand for healthy food and drink products.

Food and drink manufacturers are adjusting to this shift in consumer behaviour. They are re-formulating their products using alternatives to sugar, such as stevia, since it contains no calories. For example, leading soft drinks manufactures such as Coca-Cola and Pepsi have started using stevia as a sweetener in their soft drinks. Stevia is also being used in other products such as processed products like ketchup, yoghurts, and confectionary products.

As of June 2018, 11 European countries including the UK and France introduced a sugar tax, whilst other countries such as Germany introduced voluntary targets for manufacturers to nutritionally optimise their products. This is leading food and drinks companies to re-formulate their products and replace traditional sugars with sweeteners like stevia.

Increasing consumer awareness about health issues is predicted to continue in the coming years, particularly among younger consumers. This provides opportunities for exporters of stevia from developing countries to access the European market.

Increasing local supply of stevia

There is a growing trend towards local sourcing among European buyers and food manufacturers. This is due to lower costs associated with locally sourced ingredients. European consumers are also becoming more aware of the environmental impact of products they purchase. Manufacturers can cater to customers’ needs by decreasing their environmental footprint through sourcing locally.

It is estimated that about 72 percent of industrial buyers prefer to source locally. Sourcing locally offers food companies greater flexibility and control, and it enables them to build relationships with their suppliers possibly within their community / region and better communication without any language & cultural barriers.

For example, the French stevia company Stevial sources its raw materials as locally as possible. Despite the fact that stevia is usually grown and processed in Asia and Latin America, the company sources from Southern Europe and North Africa. Most of its stevia is processed at its Stevia Natura facility in France. The company aims to source all of its stevia from Europe by 2020. There is also some production of stevia in Spain.

It is expected that this trend will continue in the forecast period. Suppliers of stevia from developing countries should ensure that their ingredients can compete with European supply. Stevia producers should also look at adopting organic or other standards. By certifying their products, suppliers of stevia in developing countries can increase their credibility in the European food market.

Rising Demand for Plant-Based Sweeteners and Natural Ingredients

There is a growing demand for plant-based and natural sweeteners in the European market. This demand is driven by the rising levels of obesity and diabetes in Europe. Food and beverage companies are using alternative sweeteners to reduce the calorific content without affecting taste.

Another driver behind growing demand for plant-based and natural sweeteners is that consumers are seeking sustainably produced sweeteners. According to industry sources, stevia is about 5 times more efficient to grow than sugar. Since stevia is usually used as an extract, less is required to sweeten products. Stevia production also requires lower inputs of land, water and energy. PureCircle showed in their study that the carbon footprint of stevia was 79 percent lower than high fructose corn syrup, 55 percent lower than beet sugar, and 29 percent lower than cane sugar.

The same study showed that the water footprint of stevia leaf extract was about 96 percent lower than that of cane sugar, 94 percent lower than high fructose corn syrup and 92 percent lower than beet sugar.

Suppliers of stevia from developing countries should take note of the health and environmental benefits of stevia and use that in their marketing materials, as well as when they approach buyers. Sustainable production of stevia is also a great way to market products to European consumers.

Innovation

There has been growing innovation in the food and beverage sector with many new products containing stevia. According to Mintel, new product launches with stevia rose by 26 percent in the European market in 2018. Increasing demand for natural and healthier products is driving demand for food and beverage products that contain stevia.

The food and beverage sector is innovating to satisfy changing consumer demand for ‘healthier’ alternatives to traditional sugars, a trend that is expected to continue. Because stevia is considered ‘healthier’ than traditional sugars, it is increasingly being used by food and beverage companies. Prominent food and beverage companies launching products containing stevia include The Coca-Cola Co, Danone Group, Nestlé, PepsiCo, Unilever and Ricola.

There has been a lot of innovation in the stevia sector. Tate & Lyle, a leading European sugar company, launched Reb M stevia sweetener TASTEVA® M Stevia Sweetener aimed at consumers seeking natural alternatives to traditional sugars. Such innovation has resulted in the food and beverages sector using new and innovative forms of stevia in their products. PureCircle, a leading producer of stevia extract, is launching “a new generation” of stevia which are more effective sugar replacers.

Suppliers of stevia from developing countries should make note of these innovations in food and beverage products; they can be an opportunity to export to the European market. It is expected that this trend will continue in the coming years.

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

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