Olam has increased its stake in stevia company PureCircle to 20 percent, citing strong growth prospects for the company, and making PureCircle an associated company of Olam.
The Singapore-based company had been working with Wilmar under the joint name Olam Wilmar Investment Holdings (OWIH), and together OWIH held 20 percent of PureCircle’s shares.
They reached an understanding with PureCircle in 2008 for the development of a strategic partnership for future stevia development, focusing on managing commercial scale stevia plantations, assisting in the development of crude extraction facilities to support plantation activities, and developing a sales and marketing strategy.
Now, Olam and Wilmar have agreed to wind up OWIH, and Olam will take on the full 20 percent stake.
Announcing the move, Olam said that it sees a strong future for PureCircle, and for stevia in general, following the Food and Drug Administration’s decision last December that it considers Reb A – a natural, high-purity component of stevia – to be GRAS (generally recognized as safe).
“A range of stevia-sweetened products have been launched in the US and performed well, securing strong sales,” it said.
It gives the example of PepsiCo’s SoBe Lifewater sweetened with PureCircle’s PureVia-brand Reb A – as well as the success stevia has seen in the tabletop sweetener domain, where it now accounts for more than ten percent of the market.
Artificial non-caloric sweeteners have started to lose popularity as consumers place increasing importance on natural ingredients. Stevia sweeteners are seen by some as the ideal alternative because they are natural as well has having zero-calorie and low glycemic index attributes.
Olam also said that PureCircle is in discussion with several large-scale manufacturers and it expects wider ranges of stevia-sweetened products to be rolled out during 2010 and 2011.
“Olam therefore believes that PureCircle will benefit directly from these expected product launches,” the company said.