UK company Aleron is offering the new technology, which has been under development for the last nine years in Moscow, Russia.
James Baring, of Aleron, told BeverageDaily.com the new process could bring xylite down to the same price as ordinary sugar.
And, the process could also greatly help brewers and spirits makers to hit waste and recycling targets by using up leftover grains. Around 3.4m tonnes of spent grain come out of Europe's brewing industry every year, according to Eurostat.
Xylite, a natural sugar substitute also known as xylitol, is already used in a range of food and cosmetic products, including confectionery, gum and dental care goods. But, the ingredient is at least twice the price of sugar, making it very costly for manufacturers to use it widely.
The sugar substitute is extremely useful for diabetics, but can also be used more widely to attract health-conscious consumers.
The cost of xylite has risen as the wood chips used in its production process have become increasingly scarce. Russia is now almost the sole xylite supplier to European producers.
Yet, Russian scientists based near Moscow believe their new technology could supercede the wood-chip method and turn the situation around.
They claim they can use spent grains from breweries and distilleries to create a known compound, which can be used to make a higher quality xylite than that produced from wood chips. Tests have shown their new xylite to have a minimum 99.5 per cent purity, fully meeting EU standards.
"They decided brewing waste was ideal for the product," said Baring, adding that the scientists were "fairly quick to discover it was possible in theory but it took a long time, and some luck, to get exactly what they wanted in the right quantity".
Baring said the process had so far been developed to work the same grain type every time, meaning it would ideally situated in or next to a brewery or distillery.
Aleron has prepared a project plan for a new factory and developed a small-scale pilot plant to demonstrate the process, which it says produces vegetable protein and high-quality animal fodder as by-products with no secondary waste.
Baring said he had received some interest in the process from a leading brewing waste handler in Britain.
Waste disposal has increasingly found a place on government agendas recently. The EU announced last week that reducing the environmental impact of food waste, including cutting down on landfills, would form part of a multi-million euro, five-pronged research project aimed at the food and drink industry.
Aleron is now searching for industrial partners for licencing or joint-venture regarding its new xylite technology.
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