(Du Hongxiang, CCM International Ltd.)
China, as the world production base of stevia sweeteners, is becoming an important end use market, aided by the huge and fast-growing end use industries and the traits of stevia which is consistent with Chinese consumers' appetite for natural & high-quality products. Stevia sweeteners, as sweetener additives listed in GB2760 (Chinese national standard for use of food additives in foods and beverages), have been industrially produced since the 1980s. Now China supplies about 80% of the global demand.
Figure 1. Consumption of stevia sweeteners in China, 2003~2009
Source: CCM International
End use market development
Chinese stevia market has obtained sound development since 2007. Delightedly in recent 3 years, consumption volume has increased with CAGR of 30%, climbing to over 800 tonnes in 2009, though it hovered at 400 tonnes from 2003 to 2006.
This dramatic growth was driven by the fast development of end use industries, especially, functional beverages & foods, glazed fruits, tea & juice beverage, medicines, etc., which are currently the major application fields for stevia in China. In recent 3 years, Chinese beverage, food and medicine industry have all achieved significant development with annual growth rate 25%~40% in terms of production value (nominal value). Even under the context of global financial crisis in 2009, these industries still presented a fast growth rate of around 25% over the previous year.
This fast growth will continue in the following 5 years. Food & beverage industry production value, for example, is estimated to reach RBM 10,000 billion in 2015, with annual growth rate of about 15% in the next 5 years, according to Shen Chi, Secretary-general of China National Food Industry Association. For the market segmentations where stevia are used, such as functional beverages & foods, etc., they will present higher growth rates, since they are displaying progressing trend.
China's huge consumer market and promising prospects have attracted almost all global food giants that are dominating and leading the world food development trend and will also lead the applications of stevia in food and beverages, even retail markets.
In addition, stevia sweeteners have exerted strong competitiveness over other artificial high intensity sweeteners (HIS), and are also the best choices to substitute sucrose and starch sugar in food & beverage production, particularly under the context of energy shortage and high price of sucrose and corn--the starting material for starch sugar.
Stevia sweeteners have overwhelming competitiveness over mainstream artificial HIS in terms of safety and stability. Moreover, with various grades, flavors and usage cost, stevia sweeteners can meet different demands from multiple end use industries or application fields with specific requirements, though this may cause some difficulties in stevia products standardization.
With its favorable traits, market share of stevia sweeteners has been increasing in Chinese HIS market in recent years, despite of their higher usage cost over most of HIS. For example, in 2009, stevia sweeteners constituted 8% of the total consumed sweetness of HIS in China, compared with 4% in 2005. Stevia has become the fastest growing market in all HIS in China in recent 3 years.
Figure 2 HIS market share in China, by sweetness
Source: CCM International
Chinese strict restrictions for application and production of some artificial HIS, especially sacccharin and cylamate, also contribute a lot to the booming of stevia market. For example, saccharine capacity has decreased significantly in recent 3 years and its sales volume also has seen downtrend since 2001 in domestic market. Additionally, with rising importance to food safety and food quality supervision, more and more illegal application of HIS with poor safety will be reduced or eliminated, such as saccharin and cylamate, which though still dominates Chinese HIS market now. Illegal use of them is serious in China, which is mainly embodied in the addition level and application scope exceeding the specified ones in GB2760.
Chinese consumers, influenced greatly by Chinese Traditional Medicine theories and gifted a tendency to pursue natural products, would present more preference to stevia sweeteners over other HIS, such as saccharine, Ace-K, cyclamate, aspartame, etc., even they are informed more knowledge of HIS.
The whole sweet food ingredient market in China also sees uptrend. In recent five years, the average annual growth rate is 9%, compared with 8% from 2002 to 2009. The growth of starch sugar is overwhelming over HIS and sugar. Starch sugar contributes to most of the sweet market growth and fulfills most of the supply shortage of sweet food ingredients, i.e. sucrose, in recent ten years or more. For example, starch sugar constituted 28% of the total sweet food ingredient market in 2009, compared with 21% five years ago. And market shares of both HIS and sucrose shrank in recent 5 years.
Figure 3 Sweet food ingredient market in China, by sweetness
Source: CCM International
Starch sugar enjoyed rapid growth. From 2002 to 2009, its annual growth rate was about 21%. However, it declined to 17% in recent 5 years. This downtrend is likely to continue in the following years since the corn price is always soaring driven by the fast development of downstream feed and food industries. Stevia sweetener is the best choice to fulfill the supply shortage of sucrose when starch sugar lowered down its growth, since other artificial HIS cannot undertake such a mission.
In a word, Chinese sweet market will continue its current high growth rate, or even higher, however, the growth of starch sugar supply and artificial HIS is at downtrend. Under this context, stevia, with it favorable traits, will capture more and more market share, though many things are urgent to do, such as sufficient supply guarantee, distribution channel construction, flavor modification, brand fostering, product standardization, cost reduction and quality upgrading, stevia comprehensive utilization, etc.
Writer's biography:
Du Hongxiang, born in Mainland China, has 6-year's experience in market research and is good at field works, competitive intelligence, financial analysis, benchmarking, etc. He is an expertise in foods, biotechnologies and healthcare markets and has done dozens of researches, including HIS, industrial biotechnologies, stevia, sugar alcohols, glucosamine, carnitine, enzymes, methionine, yeast extract, etc. He has got Master Degree from Sun Yat-sen University (Guangzhou), with major of ecology (graduate) and food science (undergraduate). He has just made a presentation named “Stevia's Competitiveness & Prospects in China” in the 2nd Stevia World Forum held in Shanghai this April. For more information, please contact Hongxiang.du@ximeichem.com
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