PureCircle said that a “delay” in regulatory approval for stevia in the EU was a factor contributing to lower-than-expected sales for the year.
The company has just announced its full year results for 2011, which showed that high purity stevia sales were $53.2m, 12 per cent lower than 2010.
And a bumpy road is ahead, according to its chairman, Paul Selway-Swift, who predicts more sales and profit volatility to come.
In the full year report, PureCircle states: “The sales were lower than anticipated due to the delay in EU approval (now expected in November/December 2011), delays in launch of major Carbonated Soft Drinks with stevia (now expected in FY2012) and estimated current inventory at Beverage Global Key Account's.
“We believe these delays are related more to phasing issues than to fundamental problems and therefore it is just a matter of time before we see required approval and major launches fall into place.”
The European Food Safety Authority (EFSA) gave a positive safety assessment of stevia in early 2010. Then in July this year, EU member state experts at the month's Standing Committee on the Food Chain and Animal Health (SCoFCAH) meeting backed the EC proposal to authorise stevia.
Jason Hecker, vice president Global Marketing & Innovation, PureCircle, told FoodNavigator-USA.com: “The EU approval is a very important milestone for our company and the industry. The EU is one of the largest markets in the world in terms of sweetener use.
“We have already seen real success from the early approval in the French market where 47% of the general population is already aware of stevia. We expect similar positive results across Europe upon stevia approval.”
In anticipation of this, PureCircle recently announced that it will base its European headquarters in London to support customer launches throughout the region.
Similarly, PureCircle believes it is likely that high purity stevia will have been approved for use in all major remaining markets within the next 12-18 months.
The company’s annual figures showed a net loss after tax before exceptional costs, at $3.7m compared to $1,2m gains in 2010. Exceptional costs, all attributed to a temporary slow-down in production, were $14.8m (nil in 2010).
Selway-Swift said: “Our FY 2011 results were impacted by the tough but important decisions we have taken to reduce production until inventories are better aligned with current market demand.
“Having scaled production across 2009 and 2010 to demonstrate that high purity stevia could be produced in mass market volumes, it was right to slow production in FY 2011.”
He expects sales to benefit from growing retail consumption of stevia, the opening of the EU market, an increasing customer base (up 50 per cent on the previous year) and an enhanced product portfolio.
Selway-Swift said: “We remain confident of the long term future of stevia, but it remains a mid to long term growth story and there may continue to be some sales and profit volatility along the way.”