Plant Stanol and Sterol Ester Markets Seek to Rebound with New Products

12 March 2001 00:00  [Source: ICB Americas]

By Carey Krause

Despite disappointing sales for the margarine-like spreads containing plant sterol and plant sterol esters and resulting overcapacity, raw material suppliers of these products are still optimistic about their long-term prospects in the functional food and dietary supplement market.

Plant sterol and sterol products are used in the margarine-like spreads Benecol from Johnson & Johnson's McNeil Consumer Health Care and Take Control from Unilever' Lipton. Sluggish sales in 2000 for Benecol, in particular, have led to an oversupply of sterols and stanols and the suspension of two sterol production ventures by the European leader in plant sterol and plant sterol esters production, Raisio.

Raisio procures phytosterols for Benecol from both the vegetable oil and wood processing industry. The main portion of the supply comes from the vegetable oil industry, and it is estimated that Raisio procures a significant bulk of the market. Raisio produces stanol and sterol ester at plants in Charleston, S.C., and Raisio, Finland, which operate under a combined utilization rate of roughly 40 percent.

Following disappointing sales last year, Raisio took a á37.9 million charge to revise its Benecol strategy. The Benecol division posted a decline in turnover to á23 million due to a substantial fall in stanol ester deliveries to North America because McNeil was using the large stocks it had purchased the previous year.

Raiso had projected that Benecol products containing stanol esters would become major functional foods. Raisio launched several projects to develop ways of separating sterol from wood. The largest project was a pine oil and sterol separation project (Detsea) in Chile, and the Westerol project planned for North America. Last fall, based on declining sales, Raisio released itself from the planned sterol separation project in Chile together with its partner Harting SA, suspended the Solex project in New Zealand and subjected other sterol separation projects to a reassessment on a case-by-case basis.

Raisio is now adopting a new approach based on functional food ingredients with the intention of building a worldwide network through which cholesterol-reducing stanol and sterol esters can be marketed to consumers. Raisio's first major sterol ester client as of December is the Argentine dairy Mastellone Hnos, followed by a Benecol stanol ester supply deal with Finnish meat and food processing company Atria and a December agreement with the Finnish company Valio.

In January, Raisio was awarded another US patent (applicable for sterols taken orally or as a food additive) for its substance for lowering high cholesterol level in serum and related methods, an improvement over its earlier US patents in 1996 and 1999.

In addition to Raisio, other suppliers of phytosterols include Cargill Inc., Archer Daniels Midland Company, Cognis and Forbes Medi-Tech Inc. The French turpentine producer DRT and Finland's UPM Kymmene are also producers of plant sterols and sterol products.

Last month, Forbes Medi-Tech started to wind down operations at its pilot manufacturing plant in Amqui, Quebec, following the build-up of its manufacturing capacity in Texas. In January, Forbes Medi-Tech and Chusei formed a $19.8 million joint venture plan to construct and operate a manufacturing plant scheduled to come on line in 2001, with 1,000 metric tons capacity for tall oil-based phytosterols, which included both commodity wood-based sterols as well as Forbes' proprietary plant sterol composition called Phytrol.

In February, Forbes Medi-Tech announced a deal with Pauls Limited, an Austrialian dairy producer, to launch Locol milk products enriched with branded Reducol, Forbe's proprietary plant sterol composition, Phytrol, which is exclusively licensed on a worldwide basis to Novartis Consumer Health. The first consumer food products containing Reducol were test marketed in the USA and Australia in the fall of 2000, and several additional food product launches are planned for this year.

Forbes has also acquired proprietary technology to extract phytosterols from pitch, a forestry by-product, from B.C. Chemicals, a division of the Canfor Corp. of Vancouver, B.C. The deal offers Forbes opportunity to purchase pitch as well as an option to build a manufacturing facility at the B.C. chemicals site in Prince George.

Forbes is also developing fermentation technology that converts plant sterols into pharmaceutical fine chemicals for steroids and anti-inflammatories.

Cargill, a marketer and seller of sterol esters worldwide uses vegetable oil, a co-product of their vitamin E production process. Cargill was awarded a recent patent that enables the formulation of sterols in emulsified systems. They will formulate sterols into food products that are not fat-based such as margarines and spreads.

Subject to FDA approval, Cargill plans to use their proprietary technology to produce spreads, dressings, yogurts and food bars. Cargill was the first to receive GRAS (generally regarded as safe) status for the use of sterol esters in these four categories. It is not known when the products will be in supermarkets, yet Cargill is working with food companies toward that end. A Cargill official identifies dietary supplements and foods as active growth platforms for the company's ingredients.

Also in February, Archer Daniels Midland Company and Lifeline Technologies announced a worldwide exclusive licensing agreement for phytosterol technology applicable to foods and beverages. ADM has developed a patent-pending phytosterol formulation that could be included in beverages, dairy drinks, and nonfat foods, while Monsanto recently received a patent on a "phytosterol protein complex" said to "increase the bioavailability of phytosterols."

Global raw material supplies of vegetable oil sterols are estimated at between 4,000 to 4,500 tons, and tall oil-based sterols add roughly 500 tons to the total. "A bit more capacity can be added worldwide to the vegetable oil sterols market, yet the real potential to enlarge the plant sterol market is within the tall oil or wood processing industry," says a Raisio official.

DRT was the first to produce beta-sitosterol extracted by solvents from tall oil pitch, a product of pine tree. A new DRT plant in Saint-Girons, France, is the only one in the world able to produce several tons of beta-sitosterol from pine tree. UPM-Kymmene of Finland produces wood-based sterols for Raisio and operates at full capacity--70 tons of sterols annually.

Cognis Nutrition and Health, a business unit of Cognis B.V. headquartered in The Netherlands, is a long-standing producer of the natural phystosterols brand Generol, which is supplied to food, pharmaceutical and cosmetics companies globally.

The US Department of Agriculture (USDA) is working with several US corporations toward an exclusive US license to manufacture and commercialize the esterified corn fiber oil, called Amaizing Oil, for use in cooking oils and dairy products, specifically, but also spreads and chocolates.

Kevin B. Hicks, research leader, plant science and technology research, Eastern Regional Research Center, ARS, USDA, says unlike phytosterols in soy or tall oil, most of the phytosterols in corn fiber oil, patented in 1998, are naturally esterified with either fatty acids or phenolic acids. "Corn fiber appears to be a rich source of natural stanols and contains gamma tocopherol and carotenoids, both antioxidants," and is being studied as anti-cholesterol agent.

Goodman Fielder's sterol product called Logicol is available in Australia as a spread, mayonnaise, coleslaw dressing, milk and breakfast bar and is distributed by the local food brands Meadowlea, Praise, Dairy Farmers and Uncle Toby's. Procter & Gamble has introduced a new line of phytosterol-containing cooking oils under the brand name Crisco CookSmart. These oils contain soy phytosterol esters. P&G is the first company to market a phytosterol containing cooking oil. Currently the company is testing the oil in only Sun City, Fla., and Cincinnati, Ohio. ADM's technology should provide for applications of phytosterols in beverages, yogurt and non-fat or low-fat foods.

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