Sept. 24 (Bloomberg) -- The once-idled leaf-processing machines at a former tobacco trading house in Alma, Georgia, are coming back to life. Except now the warehouse, which still smells like tobacco leaves and cigarette smoke, is becoming a hub for a sweeter crop: stevia.
Approved for commercial use in the U.S. five years ago, stevia extracts are fast becoming the sugar substitute of choice for a population trying to slim down and avoid artificial options. The no-calorie, natural sweetener, grown mostly in China and South America, is creating an opportunity for U.S. farmers and processors looking to make up for dwindling tobacco demand and win business from Cargill Inc. and Coca-Cola Co.
Stevia may one day command about a third of the $58 billion global dietary sweetener market, according to Stevia First Corp. in Yuba City, California, citing World Health Organization data. By contrast, U.S. tobacco output has slid by half in the past 20 years. Since the two leafs are handled similarly, processors are urging farmers to switch to stevia production.
“I can remember 25 years ago when there were 300 tobacco farmers here,” Julian Rigby, a 62-year-old farmer who is trading tobacco fields for stevia, said in an interview at the Alma facility. “Today there’s one.”
Stevia and tobacco have a lot in common. They grow in a similar climate and soils. Both leaves are picked, separated from their stems and dried for use. Stevia was named after the 16th-century botanist Petrus Jacobus Stevus, according to the British Broadcasting Corp.
Certain extracts from the Stevia herb are “generally recognized as safe” by the U.S. Food and Drug Administration. Whole-leaf stevia or crude extracts haven’t been approved for use as a food additive due to research that raises concerns about its effect on blood sugar, as well as reproductive, cardiovascular and renal systems, according to the FDA.
Food manufacturers, fighting a backlash against sugar, fat and salt after global obesity rates ballooned in recent decades, are using stevia to sweeten Smucker’s jams, Crystal Light drink mixes, ice cream and even Malibu Spiced Rum. The sweetener -- used for centuries by the Guarani Indians of Paraguay’s jungles to sweeten drinks -- is often mixed with sugar by food makers to reduce calories while cutting a bitter aftertaste manufacturers haven’t been able to eliminate.
Coca-Cola uses stevia in more than two dozen products globally, including Sprite and Fanta in some European countries to cut calories by 30 percent. Stevia-sweetened Coca-Cola Life introduced recently in Argentina boasts a green label. PepsiCo uses stevia in its Next cola in Australia, some Tropicana orange juices and SoBe Lifewater. Coca-Cola shares rose 0.1 percent to $38.68 at 10:21 a.m. in New York, and PepsiCo was little changed at $81.05.
One of Stevia’s biggest markets is the U.S., said Mark Brooks, global business director for Truvia, the stevia brand owned by Minneapolis-based Cargill. About 55 million U.S. households purchased a stevia product in the past year, Brooks said, citing March data from Nielsen. Truvia is now the best-selling sugar substitute in the U.S. after Splenda, which has more than twice the market share.
Still, the vast majority of the world’s stevia, a green leafy plant that looks like a small bush, is grown and processed in China and South America. The leaves are picked and separated from the stem mostly by hand and processed in special factories to extract rebaudioside A, a compound hundreds of times sweeter than sugar. Brooks said he’d welcome more U.S. production.
“It’s great to know some of that can be homegrown -- it would resonate with consumers,” said Brooks, who also would like to diversify his stevia supply.
Farmers have experimented with stevia in warm states such as California, Georgia and North Carolina, with hopes of capturing a share of the industry. Rigby is getting help from stevia producer Sweet Green Fields LLC, based in Bellingham, Washington, which is working with the Georgia Center of Innovation for Agribusiness, run by the state’s economic development department.
Domestically produced stevia now is sent to China for extraction and then returned, said Hal Teegarden, Sweet Green’s vice president of agriculture operations. He hopes to generate enough U.S. production to justify a multi-million dollar processing plant in the country “in the near future,” he said.
Stevia has in many ways been an easy switch for Rigby, who smokes Camel cigarettes and sometimes wears a straw hat. He can use his existing tobacco planters, harvesters, drying barns and loaders for the operation, after a few tweaks and experimentation. Stevia also uses no pesticide, unlike tobacco, because bugs don’t like the sweet plants.
The new crop has presented some challenges in his three years growing it. The toughest part is germination. Rigby has a greenhouse filled with trays of tiny stevia plants with their roots submerged in a shallow pool. The setup is used to germinate stevia seeds before they’re transplanted to a small section of the largely dormant 1,100-acre farm.
This year he is working to successfully germinate 75 percent of the plants he incubated. Last year he got 55 percent. The eventual goal is as much as 90 percent.
“If you’re a farmer, you always have doubts,” said Rigby, who likes to chew the sweet raw stevia leaves while working. “You put the doubts aside and go ahead.”
To contact the reporter on this story: Duane D. Stanford in Atlanta at firstname.lastname@example.org
To contact the editor responsible for this story: Robin Ajello at email@example.com