Is stevia sugar s silver bullet?

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2 Is stevia sugar s silver bullet? Since the launch of the Responsibility Deal much of the industry s attention has been focused towards potential avenues of reformulation. Perhaps the most promising of these has been stevia; a natural sweetener with zero calories billed as a silver bullet solution to sugar reduction. Stevia has been passed by the European Food Standards Agency and is set for the European Parliament s rubber stamp in November. The natural sweetener is likely to have its biggest impact in the soft-drink and confectionery markets though manufacturers will first be looking to target the tabletop sector and emulate the successes found in France and the US, where stevia-based sweeteners have captured 23% and 22% of the sweetener market respectively. Indeed, Cargill and Merisant have both announced that they intend to launch table-top sweeteners once approval comes through. Cavalier Chocolates is planning on launching a stevia-based range next year as director Lucio Forgione believes there to be great demand for zero-sugar chocolate in the UK. However, David Jago, Mintel Director of Innovation, believes that being able to use the term natural on labels will be the main driver of sales rather than pushing products as low-sugar or low-cal. He goes on to say that the confectionery market is indulgence 2011 / Q3 2

3 driven Personally, this consumer would welcome any chocolate that delivers on indulgence and health! Using stevia to make low-cal and natural claims may also be an attractive strategy for functional food manufactures next year. The EU Health Claims Register is set for completion in January and will publish a set list of approved health & nutritional claims; setting positive boundaries on what claims manufacturers can and can t make. The EU Health Claims Register is set for completion in January and will publish a set list of approved health & nutritional claims; setting positive boundaries on what claims manufacturers can and can t make. So far, the European Food Standards Agency has only approved one health claim in five, which will have dramatic implications for the functional foods market. Energy drinks will have to change their marketing messages as EFSA has ruled that caffeine and taurine do not provide any functional benefit. Using stevia to move to a natural or low-cal position could be a promising alternative strategy. However, companies may instead opt to find subtle ways round the problem. For instance, Red Bull s tagline it gives you wings will still be permissible under the new rules because it doesn t make an overt functional claim. Time will tell which of stevia s features and benefits will capture the consumer s imagination. But if its expected presence at the upcoming Food Ingredients Europe show is anything to go by, then one thing seems certain; stevia s here to stay. The following snapshot of notable product launches gives an idea of who s thinking what and why. All information has been sourced from a variety of food trade media / Q3 3

4 Bakery Booker s has launched a new range of sandwiches with a 14-day shelf life to keep wastage down, just one of a string of longer life products to be launched this year. Hovis has pledged to only use British wheat in their loaves. Nature Valley is competing with fellow Olympic sponsor Cadbury to be the snack of choice for next year s games. Nature Valley still has relatively low awareness but sales have grown 50% in the past 2 years. Tetley is planning to release new sultana scones to Asda. United Biscuits plans to extend its Temptations range to incorporate a variety of cakes to target the Christmas consumer / Q3 4

5 Confectionery & Snacks PepsiCo is still searching for a baked crisp product that is a hit with the consumer. The company set a raft of health pledges in March last year and has currently only hit 50% of its targets. Cadbury is rolling out new Olympic-themed products as 2012 draws closer. United Biscuits has extended the Hula Hoop brand with the launch of Big Hoops, which it described as the same as Hula Hoops but bigger. Sharing formats are doing very well for retailers at the moment and are worth 633m across all channels. Kraft is hoping to cash in on Halloween as it launches a wide range of revamped confectionery products. Terry s Chocolate Orange is being re-branded as a pumpkin as 57% of shoppers bought Halloween sweets last year. Cadbury is releasing a limited-edition version of its Creme Egg called Cadbury s Screme Egg to capitalise on Halloween. Stevia, a natural sweetener with zero calories that can slash sugar levels whilst maintaining additive-free labels, is set for EU approval by the end of the year. Awareness of stevia has reached 50% in the US and France and stevia is becoming a destination ingredient, something consumers go looking for according to The Grocer. Ferrero is looking to join the trend of sharing boxes this Christmas with NPD primarily consisting of repackaging to a variety of season box shapes, such as a Christmas tree. Nestlé is prioritising novelty NPD for Christmas with new festive formats for their products as the trend for novelty market shows a 10% y-o-y growth. Merisant has unveiled the details of its plans for herbal-based PureVia sweetener brand in the UK. Cadbury s Twirl is extending into sharing packets in September. Cavalier chocolates is set to release a new range using the natural sweetener stevia rather than sugar. Stevia is currently used in the U.S. by Coca-Cola and PepsiCo and is expected to receive parliamentary approval for use in the EU by the end of the year / Q3 5

6 Dairy The EC is considering legislation to force the milk industry to reduce cadmium in products. Müller is launching a new milkshake range, Müller Milk. The brand has put a lot of effort into being associated with great taste and off the back of this reputation decided to introduce the new product. Dairy Crest is set to release a new Cheddar cheese snack to compete with Cheestrings, Babybel and Dairylea. Cathedral City Chedds are made using 100% mature Cheddar rather than being processed; a quality the company hopes will resonate with parents. Excessive price promotion has seen butter brands look to alternative strategies to distinguish themselves. Lurpak have launched a campaign to inspire consumers to make every food occasion better whilst Dairy Crest plans to rely on its status as the only British butter brand. Müller is launching a new Indulge sub-brand for its Muller Rice range. The product is made with whipping cream and comes in a number of flavours. The company hopes the launch will bridge the gap between standard and luxury desserts. Director Lee Rolston added that the Indulge range would provide a stepping stone for consumers to trade up. Bridgehead Food Partners is looking to compete with Babybel and Catherdral City with the launch of a new snacking cheese for adults. The Chunky Cheese Company range was created after customer research identified a gap in the market for an adult snack that did not contain carbohydrates. Müller is revamping its UK range to make the company logo more prominent as it bids to become the master brand of the yogurt sector / Q3 6

7 Fresh Produce The UK fresh produce industry has lost more than 50m since the start of the E. coli outbreak in Germany, according to the Fresh Produce Consortium. Salad prices have started to recover in the wake of the German E. coli crisis. The European Commission has angered the UK fresh produce industry after it launched a promotional campaign in the Metro without informing the industry or trade bodies such as the FPC. Industry commentators believe the advertisement was inappropriate for the UK market and believe the EC to be out-of-touch with national issues. Booker has reported a 34% increase in fruit and veg sales. Berries have now become the top fruit in the UK by value. Data from Kantar Worldpanel shows a 13% y-o-y increase in sales with berries now commanding 18.4% of fruit sales. The British Summer Fruits Association believes that the new found success has come as consumers have become aware of the healthy benefits of berry fruits. Sprouted seed producers are looking to set up a new industry body and introduce a quality assurance label in a bid to restore confidence after their products were implicated in the E. coli outbreaks. The sprouted seed sector is considering legal action against the EU after the EC excluded it from in compensation it made available to vegetable and salad producers / Q3 7

8 Frozen, Processed Mars and Heinz have launched new ready meal ranges. The new ranges on offer are hoping to reverse the perception that chilled meals are healthier than their ambient counterparts. Heinz has reduced the price of its pasta pouches to encourage consumer trial. Kerry Foods is introducing a new range of premium frozen ready meals made with quality ingredients. The company is targeting the increasing number of people who don t have a lot of free time but still desire quality food. Tesco-owned Chocablok ice cream is looking to steal market share from Magnum with the launch of premium ice creams on sticks. Young s have launched a new range of frozen fish to inject some variety into the category. The products are backed by Jamie Oliver and only use MSC-certified fish. Carte d Or is looking to replicate the success of Ben & Jerry s mini-tubs by launching a new miniatures range. The Grocer expects the brand to face stiff competition from existing competitors Häagen Dazs and Nestlé / Q3 8

9 Meat, Fish & Poultry The EU intends to alter the regulations governing the labelling of bacon. Suppliers are outraged as the proposed changes are set to alter the texture feel and taste of British bacon. The MSC scheme requires fisheries and their vessels to meet strict criteria around stock levels, environmental impact and management of fisheries. The multiples are not yet fully behind the scheme. Asda aims to sell 100% sustainable fish by 2015 whilst Tesco s only sells some MSC certified fish. Booker has launched nine new lines of meat in their Butcher s Market section as shoppers demand better fresh meat products. Europe s seas are being over-fished; the CFP is considering drastic changes to catch limits. The CFP s main aims are as follows: All EU fish stocks to be at sustainable levels. Total ban on discarding fish at sea. Cod remains the UK s favourite seafood according to The Grocer. Whilst cod dominates frozen salmon has established a comfortable lead as the best-selling chilled fish. Mackerel sales have risen 14% in the five months since Hugh Fearnley-Whittingstall launched his campaign to get UK consumers eating more fish. Sainsbury s are opting for line-caught fish to help support sustainable fishing. The method is a more selective form of fishing producing lower yields. Supplier Saemark have brought their practices up in line with Marine Stewardship Council (MSC) standards / Q3 9

10 Functional Foods & Organic Sauces & Soup The UK s organic poultry sector could be killed-off if new EU rules come into force. Organic feed can currently be cut with 5% non-organic material but this is due to be cut to zero if the proposals go ahead. Only one health claim in five has received a positive verdict from the European Food Standards Agency. A host of food and drink products are currently in danger of being outlawed under new European law. The functional foods market will remain dynamic until the EU draws up a final list of approved claims in January. Heinz is launching a new range of cup-soups made from a purée rather powder. The Squeeze & Stir range looks to build on the 17% of consumers who eat soup for lunch and target those that want to eat a good quality soup but have no means of heating it other than a kettle. Premier Foods are re-branding the Loyd Grossman range as sales fail to hit their target. Ingredient listings will feature prominently on the new range as the brand tries to win over the 54% of consumers who prefer to make meals and sauces from scratch. Health now defines Morrisons own-label products as the supermarket plans to strip out vast amounts of fat, salt and sugar from its ranges. Premier Foods is launching a new range of instant soups with increased vegetable content to compete with Heinz new Squeeze & Stir. Ella s Kitchen suggests that attributing the organic category s woes to a simple price premium is overly simplistic. HP has received a raft of customer complaints after reducing the salt content of its sauces. Consumers argued that the reformulation had compromised the taste of the sauce. The Grocer suggests the key to recipe reformulation is to avoid compromising quality, functionality or price / Q3 10

11 Soft Drinks Alcohol Some energy drinks will need to alter their packaging as the EFSA have dismissed claims that caffeine, taurine and sugar lead to higher energy. Brands could manoeuvre round the regulators by implying rather than stating health claims. For example, Red Bull will not need to change its give you wings tag-line. Firefly has ditched its energy drink status and has reverted to back to pushing the health benefits of its drinks. There has been a steady decline in the number of households purchasing tea due to a decline in popularity from younger consumers. In contrast, coffee sales have risen steadily with growth driven by promotions. Cocoa is the fastest growing sector. Twinings has faced a consumer backlash following the reformulation of its Earl Grey tea in April. Spirit sales have risen by up to 40% in some stores as more companies increase their product ranges. The Co-Operative has collaborated with Diageo to promote this under its free spirits campaigns. 8 out of 10 spirit drinking occasions took place at home as consumers look for better value. Morrison s has added 51 beers to its regional real ales range. The number of first time real ale drinkers has increased by 40% over the past few years. Lambrini is launching a new range of flavoured fruit ciders to target the female market. Magners is planning to sell limited edition ranges of its cider through Facebook to capitalise on the growing number of people using social media. Head of Marketing Kirsty Hunter believes that F-commerce could be a significant trend in years to come / Q3 11

12 Miscellaneous The FSA has been highly criticised by British suppliers after telling consumers not to eat any raw sprouted seeds, after an E. coli outbreak in France. Tate & Lyle Sugars is in compensation from Brussels over the revised EU sugar laws. Imports of sugar have been restricted to developing countries in Africa and the Caribbean, which has left the company with a shortfall. Research has shown that traffic lights work much better than guideline daily amount labels. Retailers are looking for ways to help them meet targets to reduce consumers daily salt intake by 1g. Prices, salt, fat levels and waste are the top issues concerning British consumers at the moment according to new research commissioned by the Food Standards Agency. 61% of consumers said they were concerned about rising food prices. Figures show that more than 70% of adults don t get their five-a-day. The Health Secretary has pulled the plug on the Government s health deal following accusations from the House of Lords that it was too soft. The initiative would have encouraged suppliers to increase the fruit and veg content of brand recipes and provide more healthy eating information. New plans are to be released in Autumn. Mintel director of innovation David Jago suggests that stevia will have little impact on UK confectionery markets as they seem to be indulgence driven with consumers responding to portion control over health claims. US heavyweight Post has decided to enter the UK market with Honey Bunches of Oats. Ready meal brand Stewed! is introducing a breakfast stew to target consumers looking for a heated product in the mornings / Q3 12

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