Market Challenges And Opportunities

Global Stevia Market Drivers:

The growing demand for low-calorie food products: The demand for healthy and low-calorie food options has been steadily rising across the globe since 2021. With growing health-consciousness and focus on weight management, many consumers are increasingly opting for food products that are low in calories and sugars but still tasty. This shift in preferences is directly fueling the growth of the stevia market.

It has no glycemic impact and is about 200-300 times sweeter than sugar. Food manufacturers are leveraging the properties of stevia by incorporating it into various products as a sugar substitute such as yogurt, fruit juices, baked foods, and other beverages. This allows them to offer reduced calorie or sugar-free options to health-oriented consumers

In 2020, according to the National Health and Nutrition Examination Survey conducted by the Centers for Disease Control and Prevention in the U.S., the percentage of adults consuming 10% or more of calories from added sugars increased from 31% in 1999–2000 to 34% in 2015–2016. This highlights the growing issue of excessive sugar consumption. To combat this, in 2023, the World Health Organization (WHO) published guidelines recommending reduced intake of free sugars to less than 10% of total energy intake. Such policy moves and efforts to cut down sugar at population level, have raised awareness about low-calorie sweeteners like stevia among consumers as well as food companies. As a result, stevia extraction and production is accelerating globally to meet the exponential spike in demand.

In conclusion, the widespread trend towards wellness-led consuming and avoiding empty calories has generated huge market potential for all-natural and zero-calorie sweeteners like stevia. By offering tasty and convenient low-sugar or sugar-free alternatives, stevia is revolutionizing the food industry landscape and thus enabling healthier product formulations. This expanding role and uptake are expected to serve as a key driver propelling the growth of stevia market in the near future.

Increasing demand for plant-based sweeteners with natural ingredients: Global stevia market is experiencing significant growth driven by the rising demand for plant-based sweeteners made with natural ingredients. Stevia is gaining widespread popularity among health-conscious consumers as it is several times sweeter than sugar but has zero calories. More importantly, it does not spike blood sugar levels like table sugar.

As people become increasingly health-conscious and seek out natural zero-calorie sugar alternatives, the demand for stevia is increasing substantially. According to the United Nations Food and Agriculture Organization (FAO), global obesity rates have nearly tripled since 1975. Obesity and related diseases like diabetes pose serious health risks. As a result, many consumers are actively looking to reduce sugar intake and switch to plant-based natural sweeteners. Stevia satisfies this demand well. The sweetener is also gaining traction among food and beverage manufacturers as a healthier sugar substitute. Products featuring stevia labels are appealing more to present-day consumers.

The trend towards clean label and plant-based products is expected to further propel the stevia market in the near future. The World Health Organization (WHO) recommends reducing free sugar intake to less than 10% of total daily calories. This is driving more product reformulation and new product launches by using natural low-calorie sweeteners like stevia. Growth is expected across multiple categories such as beverages, dairy, bakery, and confectionery. The global move towards sustainable agriculture will also benefit stevia as it is an environment-friendly plant-derived alternative to sugar. With increasing health awareness and natural product preferences, stevia is well-positioned to capture a larger share of the multi-billion-dollar global sweetener market.

Global Stevia Market Opportunities:

Expansion in untapped markets: Stevia is a natural sweetener that has gained significant popularity in 2021 due to increasing health consciousness among consumers globally. As the awareness about the health issues that are associated with artificial sweeteners continues to rise, more people are shifting towards natural alternatives like stevia.

While stevia is widely used in many developed markets, several developing and underpenetrated regions still offer sizable untapped potential for future growth. For example, Middle East & African countries have started adopting western food habits but the consumption of natural sweeteners is still in the nascent stage. These regions are home to over 1.5 Bn people who could embrace stevia as a healthier sugar substitute as their incomes rise. According to reports provided by the United Nations Population Division, the population in the Middle East & Africa is expected to double by 2050 which will expand the potential consumer base significantly.

Similarly, Asia Pacific countries like India, Indonesia, and Vietnam have a high diabetes burden according to the latest data provided by the International Diabetes Federation. However, stevia is yet to make major inroads and gain widespread acceptance in these emerging markets. Its use is predominantly limited to health and wellness segments. If more local food and beverage players promote stevia as a way to lower sugar options, it can help tackle diabetes as well as drive its mass consumption. The growing health awareness in Asia Pacific coupled with increasing disposable incomes points towards a favorable future demand scenario.

To capture this substantial untapped demand, companies must focus on awareness campaigns highlighting stevia's benefits and strengthen direct distribution networks in priority regions. Tailoring products and marketing communication to local taste preferences will also be crucial. A multipronged strategy targeting both consumers as well as manufacturers can help boost adoption rates. Tapping into new growth markets in key continents is thus a huge opportunity for stevia producers to expand globally in the near future.

Product diversification and launch of new stevia-based food and beverages: As consumers become increasingly health-conscious, they are seeking out natural sweeteners with zero calories like stevia. Product diversification by using stevia as a key ingredient could help meet this growing consumer demand. Stevia is being explored for use in various food and beverage products beyond just drinks. For example, stevia extract could potentially be used to replace sugar or artificial sweeteners in baked goods, yogurts, sauces and dressings to make them healthier with fewer calories and carbohydrates. As the global population pays more attention to diabetes, obesity, and other chronic health issues exacerbated by excessive sugar consumption, there will be immense opportunity for innovative stevia-based products that provide delicious taste without compromising health.

Implementing stevia in diverse product categories through new product launches has the ability to drive significant growth in the stevia market. According to the Food and Agriculture Organization (FAO), global per capita consumption of sweeteners increased by around 23% from 1988-1992 to 2008-2010, predominantly in processed food products FAO, 2020. As processed and packaged foods continue expanding in both developed and developing nations, incorporating stevia's zero-calorie sweetness can help meet increasing sweetener demand in a natural and sustainable way. Companies that successfully diversify beyond just beverages to leverage the health halo of stevia across other popular food segments like snacks, desserts, and breakfast foods stand to witness major returns on investment.

To conclude, widening consumer focus on health combined with opportunities opened by integrating stevia into various global food categories present a promising future for the stevia industry. Leveraging this through strategic product diversification and new product launches addressing unmet needs could help drive sustained market growth in the near future.

Global Stevia Market Restraints:

Stringent rules and regulations regarding the use of stevia as a food ingredient: Strict regulations regarding the use of stevia as a food ingredient is significantly hampering the growth potential of the global stevia market. Various countries have stringent rules around the permissible levels of different stevia glycosides present in stevia extracts. For instance, in 2021, the European Union (EU) approved the use of only Rebaudioside A and Stevioside under certain daily intake levels. Products exceeding these thresholds cannot be marketed in the EU. Similarly, China and India also have their own established standards. This disparity and lack of alignment across acceptance levels created regulatory barriers for companies operating globally. They need to tailor their stevia-based formulations to meet individual country norms.

There are also additional process-related criteria around extraction techniques. Many nations approved only high purity and natural stevia extracts produced through approved methods like enzyme catalysis, while synthetic variants are restricted. Meeting these complex rules increases production costs. As a result, some small manufacturers especially from developing countries fail to comply, thus reducing overall supply. According to the Food and Agriculture Organization of the United Nations, global natural sweetener market witnessed the growth of only 2-3% annually between 2020 and 2022 due to regulatory hesitancy. The FAO report highlighted regulatory challenges as the principal factor hampering faster adoption of stevia. With rising health consciousness, stevia's market potential is massive. But inconsistent norms continue to hold back its growth trajectory significantly unless harmonized internationally.

Counterbalance: To overcome this restraint, the key market players need to follow the stringent rules and regulations regarding the use of stevia to increase the global stevia market growth.