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Stevia Corp.
(OTCBB:STEV)
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Company Overview
Stevia Corp. is a Farm Management company with a strong focus on Stevia agronomics from plant breeding to good agricultural practices to post harvest techniques. Stevia Corp. invests heavily in R&D and IP acquisition and manages its own propagation, nursery and plantations as well as provides services to contract growers and other industry growers. Stevia Corp. was founded on the principal of implementing quality agribusiness solutions to maximize the efficient production of Stevia leaf.
Stevia is a perennial plant used for centuries as a natural sweetener in South America. In 2008 the U.S. Food and Drug Administration approved Stevia extract Reb-A for use in the USA. In less than a year, Stevia’s U.S. sales had passed sales figures for saccharine and aspartame. Today, Stevia is found in over 6,000 products including beverages, foods and medicines, and this number is growing rapidly as Stevia heads towards mass commoditization like sugar and high fructose corn syrup.
Their corporate center is located in the US with R&D operations in the US, Singapore, Vietnam and Indonesia and farm operations in Vietnam and Indonesia and planned operations in the US. The management team has extensive expertise in specialized farm management practices.
Their mission is to be a major grower of Stevia leaf and the global leader in servicing Stevia growers. Their vision is to be the preferred Stevia agri-partner creating global synergies to ensure a sustainable supply of Stevia leaf necessary to fuel the industry.
Projects Overview
Crop nutrition forms a core component of Stevia Corp.’s Farm Management system and it is a highly specialized field and requires extensive experience and know-how to apply on crop-specific and country-specific areas.
All plantation land and current farming practices differ even for the same Stevia crop because of soil condition, climate, terrain, rainfall and different varieties of the same crop. Each plantation is different and there is no one-size-fits-all approach to crop nutrition. However, there are fundamental crop characteristics that are similar for a specific crop sector across countries. This allows a successful model in one country to be replicated in another country.
STEV’s target markets are initially Vietnam and Indonesia where Stevia Corp. has contracted with growers and has established its own nurseries and test fields. Although Stevia Corp.’s priority is Asia, it has business opportunities in other Asian countries and the US and its services are not limited to specific countries.
So Why Now?
Historical technical challenges:
Stevia has been used as a sweetener for many centuries, without ever becoming mainstream. This is because the extract contains a mixture of different molecules that vary depending upon climate and growing conditions and it was historically impossible to produce consistent specifications necessary for a mainstream ingredient or for clinical trials to achieve FDA approval.
Technical challenges recently overcome:
This issue was only overcome in recent years by identifying the steviol glycoside molecules with the best taste profiles and by developing innovative and unique process technologies to separate and purify Stevia extract to pharmaceutical levels of purity on a reliable and consistent basis: and, importantly, to do so in commercially viable volumes.
Recent regulatory approval for major market:
Once these hurdles were overcome, Cargill and Merisant each submitted applications to the FDA in 1998 for GRAS approval. On Dec 17, 2008 the Stevia extract, Rebaudioside A (Reb‐A), received GRAS approval and since then there have been several hundred product launches by food and beverage companies globally demonstrating the widespread demand and acceptance.
Regulatory Approval Time Line
JFSA – 1971
Japanese Food Safety Commission approved Stevia as a safer alternative than Aspartame and Cyclamates.WHO/UN FAO – JUNE 2006/08
Joint Expert Committee of Food Additives(JECFA) WHO/UN FAO
Doubled the Acceptable Daily Intake (ADI) level for Stevia.FSANZ – SEPTEMBER 2008
Australian/NZ food authority (FSANZ) approved Stevia as a food ingredient.FDA – DECEMBER 2008
US FDA issued GRAS letter of no objection for high purity Reb‐AEU – APRIL 2010
The European Food Safety Authority passes a favorable opinion of Stevia to the European Commission for authorization in the EU. Full EU approval is expected in 2011.
In today’s market where consumers are requiring healthier, more natural choices and manufacturers are looking to meet this demand while continually driving cost efficiencies, stevia is a sweet solution.
Market Size
Originally it was thought that Stevia’s market would be restricted to zero calorie beverage applications and would primarily be a premium priced natural ingredient replacement for artificial High Intensity Sweeteners (“HIS”). While Stevia did make a large impact within the $8 billion HIS sector, overtaking Aspartame within its first year of launch, the potential market has expanded to the entire sweetener market and across all food & beverage categories.
Sugar consumed annually: 160 million tons worldwide. Current value over $50 Billion annually.
World Health Organization estimate: Stevia poised to replace 20% of the sugar market.
A Potential Multi-Billion market share for Stevia
There were two key developments that have opened the market:
First, there was proven consumer demand for all natural reduced calorie products where Stevia was blended with sugar reducing caloric value by 30 to 40 percent without sacrificing the functionality and taste of sugar.
Second, high purity total steviol glycosides with reduced Reb-A content were granted GRAS status by the FDA in 2010. This allowed for stevia products to be formulated across a wide range of sweetness at less than 50% of the cost of high purity Reb-A and costing less than sugar while becoming an economic advantage enabling a premium all natural low calorie product desired by the consumer.
Caloric Comparison in Various Foods
Product |
RebA |
Sugar |
Benefit |
| Carbonated Soft Drink (0.24 L) | 1 | 103 | 99% Reduction |
| Lemonade 0.24 L | 5 | 107 | 95% Reduction |
| Chocolate Pudding ½ cup | 90 | 172 | 48% Reduction |
| Hot Chocolate 0.24 L | 64 | 148 | 57% Reduction |
| Yoghurt ½ cup | 100 | 210 | 52% Reduction |
The two industry leaders, PureCircle and GLG Life Tech, have partnered with major sugar manufacturers in the US, Denmark, France, Great Britain, and Australia to market blended reduced calorie products. PureCircle joined with US sugar giant, Imperial Sugar, and formed a joint venture, Natural Sweet Ventures, to launch SteviaCane as a retail steviasucrose product for household consumption. The initial trial launch in 200 retail stores in Texas is outperforming expectations.
The entire sweetener market currently averages $80 billion split into three main categories: Sugar (82%), High Fructose Corn Syrup (HFCS) – (9%), and High Intensity Sweeteners (HIS) – (9%). Overall the sweetener market is growing, but HFCS and artificial HIS ingredients are being replaced with natural alternatives such as Stevia. In addition, Stevia is being blended with sugar to meet the low calorie consumer requirements while still maintaining functionality and taste.
Given that the standard product development and launch cycle is eighteen months to three or more years, it is expected that the true market size potential and consumer acceptance will only be confirmed in late 2011 and beyond. Additionally, regulatory clearances expected in 2011 (EU, Argentina, Canada, Indonesia, Thailand, Vietnam and others) will facilitate accelerating the roll-out of sizeable brands internationally.
STEV’s Market
All major markets have now approved the use of high purity Stevia or are expected to do so by the end of 2011. Data across all key indicators suggest that consumer demand and consumption of high purity Stevia sweetened products is accelerating.
High purity stevia is being consumed in more countries, more brands, more SKUs and with more repeat purchases and product roll-outs than in each period measured before.
Unprecedented Product Development
2008 – FDA Approval – Stevia launches in USA
2009 – Stevia U.S. sales share surpasses saccharine and aspartame.
Today – More than 6,000 food, drink, and medicinal products use Stevia.
Fact: 2010 saw 200% increase in Stevia product launches – momentum is growing
Mintel New Product Database confirmed that the number of new product launches in 2010 increased by 200% over the previous year with product launches across thirty-five countries. Nielsen data indicates that US sales totaled $809 million; an increase of 126% on the $357 million recorded in full-year 2009 and crossed 38 categories of Food & Beverages. Euromonitor reported an 87% increase in product launches in 2010 in Europe and because stevia has yet to win full regulatory approval across Europe, the market still remains relatively untapped.
This is the first year that independent retail consumption data for Stevia has been available. The Nielsen based data shows that Stevia is a rapidly growing industry and that Stevia is developing into a broadly mainstream ingredient in foods and beverages.
Investment Highlights
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STEV has entered into an Equity Purchase Agreement of up to $20,000,000 of the Company’s registered common stock by Southridge Partners II, LP (”Southridge”), an institutional investor based in Ridgefield, Connecticut. This funding will enable the Company to further accelerate its commercial development of stevia and related markets.
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STEV has broken ground for an all new research facility in Vinh Phuc province of Vietnam. Vinh Phuc province is located 1 1/2 hours northwest of Hanoi and within 1 to 2 hours of the recently announced government supported stevia projects in the region. The dedicated facility will complement the current cooperative research efforts with local institutes and partners and the location has been determined to be ideal for fostering cooperation and communications between all stakeholders in the project.
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STEV recently announced a cooperative agreement with Asia Stevia Investment Development JSC (” SV Group“), a grower partner based in the city of Vinh, Vietnam, and the Agricultural Science Institute of Northern Central Vietnam (”ASINCV”) to research and develop long term advanced agricultural techniques for large scale crop production of stevia.
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STEV in December announced that its entry into the Farm Management side of its business model has been met with rapid acceptance as the latest Farm Management Agreement has been entered into with its second Vietnam grower partner, Asia Stevia Investment Development Joint Stock Company (ASID), located in the city of Vinh, Vietnam.
Industry News
Naturally sweetened chocolate creates sugar high at candy show
Source: Yahoo! News (Philippines) http://ph.omg.yahoo.com/news/naturally-sweetened-chocolate-creates-sugar-high-candy-show-171931013.htm
A sugar-free chocolate made with natural sweetener stevia received top honors as the most innovative confectionery product at the largest sweets fair in the world this week, signaling what experts say will become a wider, more popular trend in the chocolate industry.
At the 42nd annual International Sweets and Biscuits Fair in Cologne, Germany this week about 80 food journalists named Belgium-based Cavalier chocolates their favorite confectionery for the quality of the brand’s stevia-sweetened chocolate. Overall, 112 products were entered for consideration.
After getting the green light for use in Europe last year, confectionery and food worlds have been introducing a slew of products that make use of the zero-calorie sweetener that is 200 times sweeter than table sugar and has a long history of being used in Asia and South America.
Stevia is also known as sweetleaf or sugar leaf.
The Cavalier brand comes in a range of eating bars that include flavors like milk, dark, hazelnut, rice crisp, barley — for healthy alternatives — and praline.
Last year, Cavalier partnered with premium chocolate maker Barry Callebaut to develop a range of semi-sweet chocolates sweetened with stevia which the judges say has resulted in a refined and top quality product.
In the US, Coca-Cola’s Odwalla juice line is sweetened with stevia from Truvia, while PepsiCo uses PureVia to sweeten its SoBe Lifewater and Tropicana Trop50.
The journalists were also impressed with ültje Crispers from Germany for their curry sausage and hamburger flavors, developed especially for the European Football Championships which take place in Poland and Ukraine this summer.
The crispy coated peanut snacks will be available in Europe between May and July.
Austria’s soft fruit gums from PEZ rounded out the top three most popular and innovative confectionery picks at the show. The gluten- and lactose-free soft chews are made with natural flavorings and colorings.
The New Product Showcase was revealed February 1, the final day of the show.
Stevia: Economically viable in Vietnam – Dec 15, 2011
EUROPE: EU approves stevia sweetener use – Nov 14, 2011
Sweet facts About Stevia; The Calorie Control Council – Nov 01, 2011
Stevia Market Share to Explode in 2011, Says Report – Sep 06, 2011
Commission flags up November for EU-wide approval of stevia – Jun 27, 2011
Recent STEV News:
January 31 – Stevia Corp. Secures $20 Million in Financing
Stevia Corp. Enters Into Equity Purchase Agreement With Southridge Partners II
Stevia Corp. (OTC.BB: STEV.OB – News) (”Stevia Corp.” or the “Company”), a farm management company focused on the economic development of stevia, the fastest growing product in the alternative sweetener sector, is pleased to announce it has entered into an Equity Purchase Agreement of up to $20,000,000 of the Company’s registered common stock by Southridge Partners II, LP (”Southridge”), an institutional investor based in Ridgefield, Connecticut. This funding will enable the Company to further accelerate its commercial development of stevia and related markets.
Pursuant to the Agreement, the Company has the right, at its discretion, to sell to Southridge up to $20 million of its common stock from time to time over a 36-month period. The Company will have the right, but is not obligated, to sell stock to Southridge depending on certain conditions as set forth in the Agreement. Both parties have also entered into a Registration Rights Agreement under which, the Company agreed to file a registration statement with the Securities and Exchange Commission with respect to the Shares.
Mr. George Blankenbaker, Stevia Corp. President, comments, “This is an important milestone for Stevia Corp. to have accomplished. We have attracted and won the confidence of a forward-thinking institutional investor which says a lot about their conviction regarding our vision, management approach, and overall market demand. Having a flexible and low cost funding instrument in place allows us to efficiently accelerate our commercialization and acquisition strategies.”
Further details of the Company’s business, finances, appointments and agreements can be found as part of the Company’s continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission’s (”SEC”) EDGAR database. For more information visit: www.steviacorp.us.
About Stevia Corp.
Stevia Corp. is a farm management company focused on best practice agronomic competency in order to deliver high value stevia through proprietary plant breeding, excellent agricultural methodologies and innovative post-harvest techniques. To date, the Company has acquired two grower supply contracts and three nursery fields in Vietnam. For more information visit: www.steviacorp.us.
About Southridge
Southridge is a diversified financial holding company specializing in direct investment and advisory services to small and middle market companies and seeks investments in emerging growth areas, domestically and in international markets. Southridge has successfully participated in providing over $1.7 billion in capital to companies in the United States, Asia, Canada, the United Kingdom and Australia amongst other markets. For more information visit: www.southridge.com.
About the Stevia Industry Sector
Within two years of the USA market opening, Nielsen-based retail consumption data indicated almost $1 billion of retail sales for the sector. Market research group, Mintel, has said it expects sales of stevia sweetened products to top $2 billion in 2011. In 2010, stevia products were launched across thirty-five countries and in 38 categories. Zenith International estimates worldwide sales of stevia extract reached 3,500 tons in 2010 with an overall market value of $285 million and forecasts the global market for stevia will reach 11,000 tons by 2014 requiring the tripling of stevia leaf production at the farm level to keep pace with consumer demand. For more information visit: www.steviacorp.us.
Stevia Corp.
7117 US 31 S
Indianapolis, IN 46227
Website:
http://www.stevia.co/
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