'Our aspartame is traveling VIP': Sweetener suppliers adapt to COVID-19 supply chain shocks
FoodNavigator-USA spoke to aspartame supplier HSWT, stevia supplier Sweet Green Fields, and Cargill, whose sweetener portfolio includes glucose-fructose syrup, dextrose, polyols, and stevia. All stressed that forward planning had helped them avoid supply chain shocks.
Cargill said it has not seen a tightening in supply for sweetener raw materials and that it had a strong inventory of all its sweeteners.
However, Mike Wagner, managing director of Cargill North America, said the company has experienced shifts in demand for specific sweetener ingredients as a result of the pandemic and shelter-in-place orders in North America.
“Retailers are seeing a surge in demand while foodservice customers find themselves with more product than they need,” he said. “We are doing everything possible to connect customers together to move the extra product to where it’s needed most, while adapting our manufacturing plants to create a more agile supply system.”
Chinese stevia supplier Sweet Green Fields (SGF), which works with Tate & Lyle to bring stevia-based ingredients to the market, said it has two manufacturing sites (currently running at full capacity), stocks held strategically in four continents, and a diversified network of producers, which have helped it avoid supply chain shocks.
“China represents more than 70% of the stevia leaves grown globally and is, therefore, a key supply base for stevia sweeteners,” said Shasha Yu, marketing director. “Sweet Green Fields was among the first factories approved by the Chinese government to re-open post-COVID-19 and is currently producing and supplying customers.”
HSWT: 'We shipped aspartame by airplane'
France-headquartered HSWT (previously Hyet Sweet), which claims to be the third-biggest producer of aspartame in the world, said it had been monitoring the situation in China for several weeks before the pandemic reached Europe, which allowed it time to secure the main raw materials needed to produce aspartame, aspartic acid and phenylalanine.
However, the worsening pandemic meant that transporting the final product from its facility near Dunkirk in northern France to consumers, particularly those located in North America, was challenging.
The company found itself sending some batches by plane rather than standard freight ship, which takes between 20 and 30 days.
“People tend to consider aspartame as a commodity but [we] turned it into a fine ingredient that traveled by plane,” said Youssef Hamayet Elmili, global sales director at HSWT.
“The air shipments are extreme – it was really at the very start of the crisis when people woke up and found out they would be out of product – but it shows you how crucial the role of aspartame in food is. I turned it into a joke, saying that our aspartame is traveling VIP,” he added.
The value of a secure supply chain
While price is often a primary concern for purchase managers, the COVID-19 pandemic has shown the real value in having a secure supply, said Hamayet Elmili.
“We are not selling carton boxes of white powder, we are selling a feeling of security,” he added.
HSWT's air shipments were exceptional but even standard road transport is more expensive than business-as-usual in the current environment.
Lockdown measures across the globe mean fewer truck drivers are available to transport goods while food producers are implementing additional safety procedures – such as trucks remaining in quarantined areas and not entering factory sites to avoid contamination – that are more time-consuming and costly.
Eggs in different baskets
Despite this extra cost - not all of which HSWT has been able to absorb - the company said it has seen a 20 to 30% increase for its aspartame since the beginning of the crisis as it gains new customers unable to secure aspartame elsewhere.
Asked whether he thought these new customers would stick with HSWT after the crisis or revert to their original - perhaps cheaper - suppliers, Hamayet Elmili said: “Globalization is question marked right now because one country is the factory of the world. I think that many of [our] new customers have learnt that they should always have their eggs in different baskets.”
SGF: Increased focus on health with drive R&D
In such a strained business environment, with companies around the world facing drops in sales and added expenses, HSWT found that its customers have put all new product development (NPD) on hold. “Research and development is blocked,” Hamayet Elmili said. “People are really thinking about securing existing [supplies] rather than product development, and replacing other suppliers is already a big new development for a manufacturer.”
Sweet Green Fields, however, said that while some customers’ NPD has been suspended due to the quarantine, most are preparing for renewed consumer demand after the pandemic – particularly for health and wellness foods.
“We all know that the most vulnerable people to coronavirus are those with a compromised immune system. So, […] it is important to have a healthy lifestyle of eating and living,” said Yu.
“CPG manufacturers are formulating food and drinks with functional ingredients or herbal ingredients to strengthen our immune system or alleviate stress caused by the spread of coronavirus […] and we are working with our customers to offer better-for-you products that contain no or low content of sugar.”
Cargill: Working to understand evolving consumer attitudes
For Cargill, meanwhile, coronavirus has triggered changes in consumption and purchasing habits which means its consumer and market research has a renewed importance.
“We are being especially mindful of evolving consumer attitudes during this time. We recognize that we are in unprecedented times with the COVID-19 consumer climate,” said DeeAnn Roullier, marketing research insights lead.
“Our market and consumer insight work continues during this time of COVID-19 for both one-time, topical studies and for on-going, consumer perception tracking via our IngredienTracker,” said Roullier, adding that it would share these new insights with its customers.
