DSM Food Specialties chief: “Cargill sweeteners deal takes our application knowledge to a new level”

12 Nov 2018 --- DSM’s sweeteners joint venture with Cargill (Avansya), which was announced last Thursday, is “a match made in heaven,” that combines DSM’s fermentation knowledge, with Cargill’s application know-how within this dynamic sector to offer reliability, consistency and affordability in supply. The upscaling of production for fermentation-based Reb-M & Reb D products will take stevia uptake to a new level, whereby the volume of these products will overtake that of the more traditional plant-sourced high-intensity sweeteners. This is according to DSM Food Specialties President, Patrick Niels, who is confident on the venture, despite the apparent paradox of creating an ingredient that has mainly been positioned as coming from a leaf through a fermentation process, from raw materials such as dextrose. 

“We have created a very interesting platform where we have a top-notch technology provider in fermentation together, with a provider of tremendous application know-how in sweeteners,” he says in an interview with FoodIngredientsFirst, noting that initial customer responses have been “extremely positive.”

In an interview after the venture was announced, Niels confirmed how quickly the partnership came into fruition in recent months. “We had a relationship, between the two companies for dozens of years, but this topic actually came up at the end of the summer. We came to a conclusion rather quickly, when you consider the intricacies of the project,” he notes. “That was all driven by the fact that we both very much appreciated the partnership synergies. We of course wanted the best and cleanest tasting steviol glycosides and to bring those to the market. But fermentation brings a consistent product that is reliable in supply. It produces it much more sustainably when compared to a plant-based product. Last but not least, it makes it affordable if you make it at a large scale,” says Niels.

The synergies quickly became apparent. “Our strength in biotechnology means that we have developed a very good process for this. And we were about to come to the point where we were going to invest in hardware and invest in building up application know-how, as that’s the step that we don’t really have now. Customers ultimately need to have your capabilities and support to replace sugars or other sweeteners with steviol glycosides. Cargill was very interested in our technology. So it was a match made in heaven. That is why, when we realized this, the process accelerated,” he confirmed. 

Last Thursday, we reported that Cargill and Royal DSM had formed a new sweetness joint venture known as Avansya. Together, the companies will produce highly sought-after, sweet-tasting molecules, such as steviol glycosides Reb M and Reb D, through fermentation. The move is aimed at giving food and beverage manufacturers an even more scalable, sustainable and low cost-in-use solution than if these same molecules were extracted from the stevia leaf. The new venture will combine both companies’ technologies for producing steviol glycoside products made through fermentation and will market its products under one brand name, EverSweet. Cargill already has an agreement in place with biotechnology and fermentation innovator Evolva for EverSweet, which will remain unchanged as a result of the upcoming joint venture. 

Avansya will make use of a new fermentation facility that is being built at a Cargill site in Blair, Nebraska. The plant is expected to be completed and operating in summer 2019. ”This is a ‘brownfield’ site, where we use some existing hardware but we are adding an awful lot of hardware to it. It is based at a Cargill site where we also have very efficient availability of dextrose as a raw material for the steviol glycosides,” Niels explains. While he wouldn’t be drawn into discussing exact capacity for sweetener production, he confirmed that volumes would be large. “When this is done it will be a while before we need to add fermentation capacity,” he adds.

The move means that Cargill will now offer both stevia products extracted from the stevia leaf and expand production of that created through fermentation, in addition to their Evolva agreement. “Cargill offers both products in their portfolio. But the division that we share is ultimately about fermentation-derived steviol glycosides that will be more reliable in supply, more consistent in quality and in the longer term also more affordable,” claims Niels. 

“To really enable a big conversion of the sweetener industry to Reb M & Reb D steviol glycosides, you need consistent quality and reliable supply and affordability that fermentation can give,” he notes. “There are a few advantages on the plant-based ones, specifically in terms of how you can position the product. And that’s why Cargill will keep both in the portfolio. But we have a shared vision that the fermented material will ultimately account for the majority of the market, by far,” Niels adds.

The issue raises questions about the paradox of offering a chemically identical product that has been derived through a fermentation process to an ingredient that was traditionally marketed as coming from a leaf. Niels believes that this will not create a marketing problem. “It is ultimately the decision of the customers to decide which product they are going to use. I think it’s more about presenting a broad offering rather than a contradictory one,” he notes. 

Price of raw material is clearly one of the main reasons to switch. While no specifics are being given on how much cheaper a fermented alternative can be, it is clear that variable material costs are lower than when relying on the delivery of a specific leaf for extraction. “For fermentation, the raw material we use is dextrose or other sources, so your variable costs are mainly those in terms of sources and energy. So you can imagine that once investments have been made and a level of scale applied, you can compete against plant-based derived products that have, for example, been bioconverted. While there’s a difference in starting costs, when we get to full scale, the cost differential will be material,” he adds. 

Niels would not comment on specifics “both for competitive reasons, but also because of issues around variable costs and fully overhead costs etc. We have slightly higher fixed costs but lower variable material costs,” he explains. 

Niels confirmed that the initial aim of the venture will be around producing natural high-intensity sweeteners, as opposed to replicating others such as aspartame or sucralose. This suggests that other sweeteners such as monk fruit or brazzein could be considered in the future. Erythritol, which Cargill produces through fermentation is outside of the scope of the arrangement and will remain a purely Cargill activity that may be used in application work. 

In June 2016, the US Food and Drug Administration (FDA) issued a GRAS (generally recognized as safe) No Objection Letter, for Cargill’s next-generation sweetener, EverSweet, qualifying it for use in food and beverages. EverSweet was introduced in October 2015 and is made with the same sweetness found in the stevia leaf, Reb M and Reb D. It went into production in March 2018. While it is also approved in Mexico, European approval looks further away. The initial focus for Avansya will therefore be on the US and Mexico, until the ingredient gains a European green light. “It is difficult to predict the exact timeline [for European approval], but not something that will be done next year,” Niels admits. 

Assuming upcoming regulatory approval in Europe for fermentative stevia happens further down the line, what then would be the plans for European expansion? Would it require the building of a facility in the region too? The advantage of high-intensity sweeteners is that the volumes for distribution are relatively small when compared to bulk products – which means that a supplier does not necessarily need to be located in close proximity to their customer for distribution. “We have to see how that would work financially,” Niels says when asked about a possible European plant. “We can also make one mega site. It is all a matter of how do we look at the manufacturer strategy. Because the cost of all of these high-intensity sweeteners is one that you have to produce them in a range of two hundred kilometers before you market them. To put it this way, if the take-up and the success are such that we are looking at building new plants elsewhere, we will be very happy,” Niels quips. 

When Reb A stevia gained approval in Europe in 2011, there was a lot of initial hype in the air around the potential for a natural high-intensity sweetener. This momentum fizzled out somewhat in the ensuing years, however. For example, the heavily marketed Coca-Cola Life failed to enjoy mainstream appeal and was dropped in certain markets, including the UK. 

Niels is confident about stevia in general, however, particularly as this new generation of Reb M products comes to market. “We are very confident and put some serious effort and money into this. In the past, we had Reb A, which clearly is a plant-based product that does not have the most optimal taste profile. Reb M is significantly better, and in combination with Reb D, we think that that helps a bit. The other thing is consistent quality and reliable supply. With plant-based products you have to rely on agricultural conditions . For the larger consumer packaged goods companies to stake their future on that is worrisome for them. I believe that the solution that we can offer with this partnership will accelerate the penetration of stevia in the market,” he concludes.

Taste is king for consumers of lower-calorie products, while costs are a central concern for manufacturers. If this sweetener partnership between two ingredients powerhouses succeeds in the mass uptake of stevia and other high-intensity natural sweeteners, it would raise interesting discussions around the sourcing of nature-derived ingredients when they can ultimately be replicated more sustainably and cost-effectively in a fermentation facility.

By Robin Wyers