By Marina Lopes
NEW YORK Dec 22 An obscure melon once
cultivated by Buddhist monks in China to sweeten tea could give
the $8 billion U.S. diet soda industry a shot at winning back
consumers concerned about artificial ingredients.
You won't find monk fruit in any of the soft drinks at your
local convenience store. So far, shaky supplies and limited
demand have kept the expensive melon on the sidelines of the
But some experts think the fuzzy green fruit, which ripens
to the size of an apple, could be the ingredient soda makers
have sought for decades: a natural product with great taste and
When "someone figures this out and gets a taste that is
low-calorie and natural, it could really be a silver bullet that
catapults that company ahead," said Ali Dibadj, an analyst at
Bernstein who follows the soft drink industry.
Soft drink makers are increasingly desperate for just such a
miracle ingredient. Once a booming sector, diet soda has become
a laggard. In the United States, consumption fell about 7
percent this year and could shrink by 20 percent through 2020,
according to Nielsen data.
Consumers, increasingly wary of the health risks of
artificial sweeteners, are ditching diet sodas for juices, teas
and naturally sweetened lemonades, according to a recent Wells
"We believe we are seeing a fundamental shift in consumption
behavior as diet drinkers leave the category altogether," said
Bonnie Herzog, an analyst at Wells Fargo Securities.
Beverage companies have struggled to hold on to customers
amid fears about the safety of FDA-approved aspartame, which has
sweetened diet soda for 30 years.
The aspertame debate continues to rage on the Internet, even
though the American Beverage Association says the artificial
sweetener is safe for consumption.
Five years ago stevia, a low-calorie sweetener made from the
leaves of a Paraguayan plant, was heralded as an ideal natural
sweetener. But it has had only limited success in the
Coca-Cola Co uses stevia in 45 products in 15
countries, including in Coke Life, a low-calorie alternative
available in Chile and Argentina. PepsiCo uses stevia in
Pepsi NEXT, a low-calorie drink it sells in Australia and
France. But customers have complained that stevia's bitter
aftertaste alters the sodas' flavors.
Now, some beverage manufacturers are pinning their hopes on
monk fruit, which is already used in protein shakes, snack bars
This week, Zevia, a premium-brand company based in Culver
City, California, introduced a new recipe for its no-calorie
sodas sweetened with a blend of monk fruit and stevia. The
company's drinks, which sell in 12-ounce cans for about $1 each,
were previously sweetened exclusively with stevia, which gave it
a bitter kick.
"We feel like we've really cracked the code," said Paddy
Spence, chief executive officer of Zevia, which sells its
naturally sweetened no-calorie soft drinks at about 16,000
high-end grocery stores in the United States.
"Using the two side by side, we were able to get a higher
level of sweetness without the bitterness," said Spence.
Zevia, which was founded six years ago, has seen its sales
quadruple in the past three years, to $60 million this year.
"If you do detect any kind of taste, it is a fruity taste,
which goes well with soda," said Linda Gilbert, CEO of EcoFocus
Worldwide, a consumer research company focusing on green and
Analysts say the company could be on to something because
monk fruit neutralizes stevia's bitter notes.
Coca-Cola, which uses monk fruit in its Core Power protein
drink, said it is exploring ingredient options but would not
confirm that monk fruit is among them. Aurora Gonzalez, a
spokeswoman for PepsiCo, said the company is not considering
monk fruit but would not provide further details.
STEP BY STEP
Monk fruit has been consumed for centuries in southern
China, especially by the Cantonese, but in recent years it has
become popular across the country, where it is marketed in dried
form and used to flavor soups and tea, and as a remedy for sore
One gram of the fruit extract replaces eight teaspoons of
sugar, allowing consumers to significantly reduce their calorie
intake, according to Laura Jones, a global food science analyst
at Mintel, a food and drink research firm.
While Procter & Gamble Co. patented monk fruit sugar
extraction as a potential substitute for sugar in 1995, it
wasn't until BioVicttoria, a New Zealand company, shepherded the
fruit through the U.S. Food and Drug Administration approval
process that it became available for mass consumption.
The FDA approved monk fruit for consumption in 2010, and the
fruit has no reported adverse side effects.
Monk fruit presents a number of challenges for beverage
makers. It is twice as expensive as stevia and is grown only in
some regions of China. It's also not yet approved by European
regulators for consumption.
Extracting sugar from monk fruit is a long and arduous
process that further increases costs.
Meanwhile, Chinese law prevents monk fruit seeds and genetic
material from leaving the country, according to BioVittoria,
confining production to China.
At BioVicttoria, the fruit's top exporter, monk fruit is
bred for maximum sweetness and is hand-pollinated. The company
mechanically extracts its sugar content.
As public concern about artificial sweeteners has grown,
demand for monk fruit extract has increased. Chobani recently
launched a line of its popular Greek yogurt that is sweetened by
monk fruit, and this year 91 public schools in Omaha replaced
sugar in its flavored milk with monk fruit extract.
Supplies have also steadied since BioVittoria began
producing monk fruit extract. The company has deals with local
farmers to produce 60 percent of China's yield of 400 million
monk fruits, distributed exclusively by global sugar and
sweetener giant Tate and Lyle < TATE.L>.
Ultimately, big soda companies may have to swallow higher
prices to hold on to diet soda drinkers.
"I'm not sure they have much of a choice," said Dibadj, the
Bernstein analyst. "The consumer is voting with their taste buds
and concern for wellness. Investors realize that they have to
shift their ingredient base not to be artificial and it is a
tough combination to get right."