Having a 79 percent dollar share of any food or beverage category sounds impressive, even if it is a niche market like natural soft drinks. One might wonder who had a similar share of the craft beer market back in 1986, for comparison.
In 2014, Zevia LLC, Culver City, Calif., owns 79 percent of the natural zero-calorie soft drink sub-segment. That's a sub-segment has been around for just about seven years, and it's one that the company expects will grow.
“There are very meaningful differences between soda and any other beverage,” says Paddy Spence, Zevia's CEO. “With most other beverages, consumers don't mind the calories, because they see a nutritional benefit to those calories. That's not the case with soda, and because of that, consumers are drinking 20 percent less soda per capita than they did a few years ago.”
Diet soft drinks account for more than 25 percent of the overall soft drink market, according to market analysts, but concerns about artificial sweeteners are not as easily dismissed as they once were, and even the top diet soft drinks are in decline in the U.S. This is where Zevia and its competitors are finding an opportunity.
Stevia, monk fruit and erythritol are fairly new to the soft drink arena. Stevia as a food ingredient was affirmed GRAS in 2008. Used alone or in combination, these sweeteners can result in something that tastes a lot like diet Coke, but without a trace of aspartame or other artificial non-nutritive sweeteners. Beyond soft drinks, stevia might also be used to formulate significant (25-50 percent) reductions in the sugar content of beverages such as fruit drinks and even flavored milk.
Zevia, launched in 2007, sold 17 million cans in the second quarter of 2013. It is carried in 15,000 retail outlets across all major channels. Its success is largely attributed to a carefully formulated blend of stevia, monk fruit and erythritol. Combined, they hit the right sweetness and flavor spots, Spence says.
Beverage formulators have an array of ingredients to help them lowering the sugar content of their products, but getting the right combination and hitting a flavor target with deadly accuracy is crucial if a new or reformulated beverage is going to succeed with consumers.
Stevia vs. monk fruit
Stevia rebaudiana is a member of the sunflower family that originated in Paraguay. For more than 100 years – probably a lot longer -- its sweetening abilities have been known.
There are several potential extracts or glycosides. Rebaudioside A (reb-A) currently is the most popular. It's around 200 times sweeter than sucrose and has no calories.
Until recently, stevia and its derivatives could be sold in the U.S. only as dietary supplements. But companies with vested interests in the sweetener -- Cargill and its partner Coca Cola on the one hand and Pure Circle and PepsiCo on the other -- submitted research to FDA regarding reb-A’s safety and petitioned for it to become a generally regarded as safe (GRAS) ingredient. FDA granted GRAS status in December 2008.
While it didn't take off like a rocket because of some difficulties with formulation and aftertaste, stevia is gradually having a major impact on beverage formulation.
One of the original petitioners, Wayzata, Minn.-based Cargill, has the leading tabletop product, Truvia, and also has a proprietary stevia blend for other food processors. ViaTech stevia sweeteners are Cargill’s solution for achieving deeper sugar reductions with clean sweet taste.
“Beverage producers are constantly innovating and striving to develop products with the deeper calorie reductions and better taste that many consumers desire,” says Melanie Goulson, sweetness application manager at Cargill. “The higher stevia use levels necessary to accomplish these objectives can sometimes result in unwanted side tastes, like bitterness.”
“Many stevia products with high concentrations of rebaudioside A must be formulated with other sweeteners and masking agents because of rebaudioside A’s bitterness," says Amy Lauer, marketing manager at Tate & Lyle, Hoffman Estates, Ill. As many as 83 percent of consumers are sensitive to reb-A bitterness, according to sensory research by the company.
Tate & Lyle was a relative latecomer to stevia with its introduction of its Tasteva brand. But it was a relative pioneer in another beverage sweetener, monk fruit, also known by its Chinese name luo han guo.
Of course, not all natural soft drinks need to be zero-calorie.
BioVittoria LLC won GRAS certification for monk fruit as a sweetener in January 2010, then a year later forged an exclusive partnership and equity buy-in with Tate & Lyle. Tate & Lyle launched industrial products under the name Purefruit and more recently supplied BioVittoria's monk fruit to McNeil Nutritionals LLC, a Johnson & Johnson subsidiary, for Nectresse, a consumer/tabletop sweetener that is just rolling out nationally.
Blue California, Rancho Santa Margarita, Calif., went the other way chronologically. It was an early believer in stevia, having introduced Good&Sweet 99 percent reb-A in 2009. Then in early in 2012 the company debuted BlueSweet monk fruit extract, for which it also sees great potential. BlueSweet monk fruit extract "is a really good product but has a different profile than stevia," explains Cecilia McCollum, executive vice president.
New products are poppin' up
Denver-based Oogave Inc. was born of the frustrations of a restaurant owner who wanted a natural alternative syrup for his soda dispenser. Stephen Anson turned to agave, and soon began selling the syrup line. Bottled products were introduced in 2009.