Purecircle to be a winner from sugar concerns, suggests Macquarie
13:25 08 Dec 2015
Sugar’s growing demonisation should drive the market for Purecircle’s (LON:PURE) stevia sweetener alternative, according to Aussie broker Macquarie.
Mexico has been in the vanguard of this health drive with its introduction of sugar taxes in 2013.
Since then, volumes at the leading fizzy drinksupplier are down by 5-7% with prices raised by some 15% to maintain the margin.
Attempts to reduce the tax met with a wave of protest said Macquarie and academics now suggest a sliding scale for the worst offenders on the sugar front is a more elegant solution.
A plant extract, stevia, is already being used as an alternative to sugar by drinks manufacturers and taxes will force food and drinks groups to consider it even more.
The broker believes European governments, and the UK in particular, may follow Mexico and impose a sugar tax or at the very least a labelling system that makes it clear how much sugar a particular drink contains.
Macquarie says that either way, tax or labelling, these efforts can only speed up research into calorific reductions, ultimately increasing stevia adoption and usage.
Purecircle had a tough 2015, acknowledges the broker, due to tight stevia leaf supply which squeezed margins, but with prices now stabilising and the sugar debate underpinning the long term appeal, the shares trade on an unjustified discount to other sugar and sweetener groups.
The broker reckons 30% sales growth annually is possible over the mid-term especially with India’s approval of stevia in November and the new US patent for Reb-M (zero-calorie) use in beverages.
‘Outperform’ with a target price of 580p, it concludes.
This is very positive as it differentiates the Pure product offering and cuts time to market. Great to see this kind of innovation happening. Superb long term buy at these levels. Director purchases and recent placing at 550-600p+.
PureCircle Announces New Family Of Stevia Ingredients For Category Taste Breakthroughs At IFT 2015
CHICAGO, July 13, 2015 /PRNewswire/ -- PureCircle announced a new line of stevia ingredients at the 2015 Institute of Food Technologists Annual Meeting & Food Expo that delivers taste innovation surpassing other options available today. PureCircle Matrix Solutions is a new family of stevia ingredients that have been optimized for specific category applications and performs more similarly to sugar enabling deeper calorie reductions.
"We are truly proud to be able to bring our customers this great new line of products," said Jason Hecker, PureCircle's President of Group Sales and Marketing. "Our tailored approach to innovation is unique in the industry. Matrix Solutions brings together more than a decade of PureCircle research and development and offers the very best of taste innovation to our customers."
The PureCircle Matrix Solutions family includes new stevia ingredient Sigma-T, an ingredient with a clean sweetness profile, reduced astringency and bitterness and a sweet aftertaste that performs parity to sugar at mid-level sugar reductions. It joins the first product in the Matrix Solutions Family, Sigma-D, a dairy specific ingredient with a clean sweetness profile and preference to Reb A on key attributes, such as bitterness and licorice aftertaste. It has enabled customers to achieve no sugar added solutions with natural-origin, zero calorie sweeteners for the first time and was launched at Health Ingredients Europe in December 2014.
"The ingredients significantly outperform first generation Reb A solutions and come from our deep understanding of steviol glycoside research," saidJohn Martin, PureCircle's Global Director for Technical Development and Innovation. "To see them perform similar to sugar on key attributes in our sensory panels is really an accomplishment."
PureCircle Matrix Solutions brings together the company's expertise in working with the stevia leaf and its proprietary, predictive modeling technology to give customers a superior stevia solution for different food and beverage categories that cuts development time by 30 - 50 percent.
"Understanding the complexity of the leaf and how it works in specific product applications can take up a lot of development resources and time, but these solutions take the guesswork out of stevia development," Martin said.
PureCircle's food scientists at its Centers of Category Excellence have spent years working on Matrix Solutions, building upon steviol glycoside research learnings since the company's inception. PureCircle expects to expand the family of ingred
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