1. Research Analysis Consulting
LMC International Ltd Economic Consultants for Agricultural Commodity Markets and Downstream Applications
Research
Analysis
Consulting

2. Intense Sweeteners: Market Update 13th February 2007
Nicholas Fereday
LMC International

3. AGENDA Global Market Individual Sweetener Mkts: Market Drivers
Growth Rates
Global Demand
Prices
Individual Sweetener Mkts:
Aspartame
Sucralose (Splenda)
Saccharin
Neotame
Natural Sweeteners

4. Global Market Summary Market size: 18 million metric tons (s.e.)
Value: >$1bn
Beverage industry is the largest mkt
Main competitive factors: price competitiveness and technical/ functional properties (e.g. low calorie, etc.)
Dynamic market
Significant growth potential

5. Market Drivers Price competitiveness New sweeteners - SPLENDA
Functionality (zero calories)
Greater blending
Greater use in non-diet applications
Wizardry of food scientists
Food trends - Atkins/low carbs
Dia-besity epidemic (obestity and Type II diabetes)

6. A Convergence in Sweetener Growth Rates, 1992-2006
-1% 0% 1% 2% 3% 4% 5% 6% 7% 8%
1992
1995
1998
2001
2004
% Annual Growth
HFS
Sucrose
Total Low Calorie

7. Growing Intense Sweetener Demand
Since the 1990s the growth in overall demand for low calorie sweeteners has outstripped that of sugar and HFCS
Low Calorie Sweeteners: 4%/year
HFCS: 3%/year
Sugar: 2%/year
Growth rates have converged in last two years (post Atkins; HFCS exports to Mexico, etc.)

8. Conversion Table for Sweeteners
Sweetness Intensity
(Sugar Equivalent)
Caloric Sweeteners
Sucrose
1.00
HFCS
0.95
Glucose
0.70
Dextrose
0.85
Crystalline Fructose
1.30
Intense Sweeteners
Saccharin
300
Cyclamates 30
Aspartame
200
Acesulfame - K
Stevioside
Sucralose
600
Neotame
8,000
Polyols
Sorbitol
Mannitol
0.60
Xylitol
0.90

9. Shares of the Global Sweetener Market, 2006

10. Key Market Players Sucralose: T&L with McNeil
Aspartame: NutraSweet, Ajinomoto
Acesulfame-K: Nutrinova & Sanhe
Saccharin: Chinese, PMC in US
Neotame: NutraSweet

11. Approved Sweeteners In US
Sucralose
Aspartame
Saccharin
Acesulfame-K
Neotame

12. ASPARTAME

13. Aspartame: Key Developments
Rationalisation in production
Strong price competition
Strong product competition - Splenda
A short-lived resurgence in demand spurred by Low carb/Atkins food trends
Aspartame continues to lose out in the trend towards blending sweeteners
Lingering safety concerns that affected sales in 2005

14. Diet Share of US CSD Market, 1970-20060% 5%
10%
15%
20%
25%
30%
35%
40%
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006

15. US Diet CSD Market
Aspartame is the leading sweetener - sucralose is making some inroads
Flat to negative growth over past two years - direct impact on aspartame sales
Diet CSDs have an increasing share of a declining market

16. SUCRALOSE
SPLENDA

17. Sucralose: Key Developments
2007 is not 2004
Atkins/low carbs kick started market
Multiple capacity expansions
Inspired marketing by McNeil - rapid growth
Price premium

18. Sucralose: 2007
Tate has reduced sales forecasts - slower rate of uptake
Splenda is a US phenomenon: 60% of table top mkt.
<1/5 the size of aspartame market s.e. basis
4X as expensive as aspartame - Branded food additive

19. Sucralose: 2007 Post Atkins depression
Generic production - on sale in US
Lawsuits - both sides of the court
New plant ready this year but…
What will drive growth?
International Expansion - Declining share of UK TT market
Marketing constraints
Slow growth in end use markets
Superior functionality (stability, etc., ) will ensure it has a place in the market

20. SACCHARIN
125 Years Young

21. World Consumption of Saccharin, by Region

22. Saccharin Asia has about 60% of the market
Prod & Cons dominated by China
Strong growth in Europe:
Growing popularity of blending within EU
Rising demand in Eastern Europe
In US, <50% of US intense sweetener market

23. Saccharin: Key Developments
250% anti-dumping duties on Chinese saccharin in the US market since 2003
Some trans-shipments possible
Korean producers – major beneficiaries
No change expected anytime soon
The enduring appeal of saccharin and its expanding role in blending

24. NutraSweet’s Latest Sweetener
NEOTAME
NutraSweet’s Latest Sweetener

25. Neotame: Key Developments
8,000 times sweeter than sugar
Approved in US, July 2002
Very rapid growth of sales
Positioned as a sugar/HFCS substitute in caloric/intense blends so as not to cannibalize aspartame market.
Under the radar. No branding, unlike NutraSweet & Splenda
Phenylketonurics

26. Natural Sweeteners: The Holy Grail?
Sucralose has generated a lot of interest in revisiting the potential of truly natural sweeteners
Holy Grail – a natural sweetener that tastes like sugar but has no calories

27. Stevia / Stevioside
Stevia is mainly grown in China but processed in other Asian countries such as Japan and Korea
Market largely confined to China, Japan and Korea but expanding in US as food supplement
Development held back by lack of regulatory approval
One glycoside, Rebaudioside A, has an excellent taste profile if refined to a very pure form. But expensive.

28. Other Natural Sweeteners
Often used as flavorings:
Glycyrrhizin (from liquorice)
Lo Han Guo (P&G involved)
Thaumatin
Natural sweeteners less sweet that sugar:
Tagatose

29. Future Market Drivers Price competitiveness New sweeteners
Functionality
Greater blending
Greater use in non-diet applications
Wizardry of food scientists
New Food trends?
Dia-besity epidemic (obesity and Type II diabetes)