Sucralose Takes Aim At Sweetener Arena With Soft Drink Entry

27 April 1998 00:00  [Source: ICB Americas]

The high-intensity sweetener market is seeing new activity as sucralose, a product from McNeil Specialty Products Company (MSPC), a subsidiary of Johnson & Johnson, takes aim at the US beverage market.

Sucralose, which holds only a small share of the global market, will compete with industry leader aspartame, from Monsanto Company's NutraSweet Kelco division. Monsanto is also developing neotame, a new high-intensity sweetener.

Sucralose has received Food and Drug Administration approval in 15 product categories (CMR, 4/6/98, pg.4) and will first target soft drinks. "It is easiest to introduce sucralose through the beverage market because the beverage market is so huge," notes Leslie Steiner, director of international marketing for MSPC.

Royal Crown Company, a subsidiary of Triarc Beverage Group, White Plains, N.Y., and Veryfine Products Inc., a privately held company in Westford, Mass., will launch sucralose beverages by the end of April. Royal Crown will use the sweetener in Diet RC Cola, and Veryfine will feature it in a line of five different flavored drinks.

In addition to non-alcoholic beverages, sucralose has FDA approval for use in baked goods, baking mixes, chewing gum, coffee and tea products, confections and frostings. The sweetener is also approved for salad dressings, frozen dairy desserts and mixes, fruit and water ices, gelatins, puddings, fillings, jams and jellies, milk products, processed fruits and fruit juices, sugar substitutes, sweet sauces, toppings and syrups.

MSPC, through a licensing agreement with UK-based Tate & Lyle PLC, shares the development, manufacturing and marketing of sucralose, which has been available internationally since 1991.

MSPC offers sucralose in the US, Australia, New Zealand, Latin America, the Caribbean and the Middle East. Tate & Lyle, which discovered sucralose in 1976 under a collaborative research agreement with Queens Elizabeth College, University of London, sells the sweetener in Africa, Asia, Europe and Canada.

FDA surprised the high-intensity sweetener industry by approving sucralose but not Hoechst Food Ingredients' acesulfame K, which is awaiting FDA approval for use in non-alcoholic beverages. However, some market observers doubt that sucralose will have a major impact on the US beverage market.

In gaining FDA approval, sucralose will compete directly with Monsanto's aspartame. Sebastian Bizzari, market analyst with Menlo Park, Calif.-based SRI Consulting, explains that the large beverage companies may not be so quick to replace aspartame, which has been very successful and has a lock on the beverage market.

Mr. Bizzari adds that large-scale use of sucralose in beverages will depend on how well consumers accept it, how adequately MSPC can supply it, and its cost to beverage companies.

Monsanto's aspartame, which is 200 times sweeter than sugar, leads the high-intensity sweetener market in the US. Domestic consumption of such sweeteners--which include aspartame, sucralose, acesulfame K and saccharin--is nearly 32 million pounds and worth $550 million, according to Decision Resources, a Waltham, Mass.-based consultancy. Global consumption of high-intensity sweeteners, which also includes cyclamate, is roughly 141 million pounds at a value of $860 million.

Other producers of high-intensity sweeteners are taking a wait-and-see approach in assessing sucralose's impact. "It is difficult to assess the effect sucralose will have on the market," notes a spokesman for PMC Specialties Group Inc., whose Cincinnati-based subsidiary, Cincinnati Specialties Inc., is the only US producer of saccharin. Although advertising, cost and market acceptance are big factors, taste will "strongly influence" sucralose's success in the high-intensity sweetener market, he says.

Monsanto does not expect sucralose to cause a significant shift in the high-intensity sweetener market and notes it has had little impact in foreign markets. Sucralose accounts for only 2 percent of the global high-intensity sweetener market on a value basis, compared to 73 percent for aspartame, 13 percent for acesulfame K, 8 percent for saccharin and 5 percent for cyclamate.

Monsanto is looking to strengthen its position in the high-intensity sweetener market by introducing neotame, which is 40 times sweeter than aspartame.

Monsanto has completed the first step toward obtaining FDA approval for neotame, having filed a petition to use neotame in tabletop sweeteners late last year. It expects to submit a second petition for the product's use as a general purpose sweetener by the end of the year. After filing for general purpose approval, Monsanto will seek approval in other countries.

Aspartame gets its intense sweetness from the combination of its two main components--L-aspartic acid and L-phenylalanine methyl ester. Aspartame is approved for use in all beverages and foods in the US and is available in more than 5,000 products worldwide. It is also available in a heat-stable form for use in commercial baking applications, but the market for heat-stable sweeteners is "relatively small at the moment," according to Monsanto.

Sucralose, which is 600 times sweeter than sugar, differs from other high-intensity sweeteners in that it is derived from sucrose. Sucralose is made by substituting the three hydroxyl groups found in sucrose with three chlorine atoms. This not only gives sucralose its sweetness but also allows it to withstand heating.

Business Communications Company Inc., a consultancy based in Norwalk, Conn., expects strong growth for high-intensity sweeteners in foods and beverages. BCC estimates that sales in the high-intensity sweetener market will rise from $6.2 billion in 1997 to $7.4 billion in 2002, representing an average annual increase of 3.8 percent.

High-intensity sweeteners account for 5 to 6 percent of the $47 billion global market for caloric and non-caloric sweeteners. The US market is worth $7 billion, roughly 15 percent of the world market, and is the leader in dollar sales of low-calorie sweeteners.

China leads the low-calorie sweetener market in terms of sheer volume and Europe and Latin America rank third and fourth, respectively, in both dollars and volume.

ACIDULANTS--HRA Inc., a consultancy in Prairie Village, Kan., has released a global study on acidulants.

ANTIBIOTIC DOXYCYCLINE--Food and Drug Administration has sent Atrix Laboratories Inc. a letter of approval for using its Atridox drug to treat periodontal disease. The letter states that Atridox has met the necessary requirements for final approval. The product combines the antibiotic doxycycline with Atrix's proprietary drug delivery system.

Pending final FDA approval, Block Drug Corporation will market Atridox in the US, according to its North American marketing agreement with Atrix. In return, Block will give Atrix a $7 million milestone payment as well as manufacturing margins and sales royalties. Atrix is also developing a strategic distribution channel for marketing its dental products outside of Block's licensed territories.

DECISION RESOURCES a consultancy in Waltham, Mass., has published an analysis of the pharmaceutical industry in Western Europe.

DISODIUM/DIPOTASSIUM Fluor-escein--Nalco Chemical Company has filed a petition with FDA asking that it modify disodium and dipotassium fluorescein use in boilers where steam may contact food.

ICN--The Montenegrin government has agreed to let ICN Pharmaceuticals Inc., Costa Mesa, Calif., acquire, through ICN Yugoslavia, a 33.7 percent stake in a government-owned healthcare center in Igalo in the Republic of Montenegro. ICN will only be a shareholder and will pay the government 147 million Yugoslavian dinars and $1.2 million cash. ICN calls the transaction another step in its plan to help privatize the region's healthcare industry.

INFLIXIMAB--Centocor Inc. is giving Schering-Plough Corporation exclusive worldwide marketing rights, excluding the US, Japan and portions of the Far East, to Avakine (infliximab), Centocor's monoclonal antibody for the treatment of Crohn's disease and rheumatoid arthritis.

Centocor will receive a $20 million payment up front and could receive additional milestone payments of as much as $30 million. Schering-Plough and Centocor will divide profits related to Avakine and share internal and external development expenses related to the product. Centocor retains US marketing rights to the drug and reserves the right to co-promote it with Schering-Plough.

MALIC AND FUMARIC ACID--Haarmann & Reimer Corporation's food ingredients division, Elkhart, Ind., is raising its prices for all grades and granulations of malic and fumaric acid by 4c. per pound. The increase is the first in more than a decade and is attributed to strong growth in demand, tighter market supplies and higher raw material costs.

REPLENS--Columbia Laboratories Inc., Miami, Fla., completed a $4.6 million transaction to reacquire the rights to Replens (vaginal dryness medication) from Warner-Lambert Company. Columbia expects to increase its gross margin on product sales from 25 percent to 80 percent now that it will sell Replens directly.

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