By James from Yamei
Aspartame market in 2014
Many people heard the news that the biggest and reputable Aspartame producer in the world, Nutrasweet, in the end of September has announced that it would close the Aspartame plant by the end of 2014 in Augusta, Georgia, US. Nutrasweet’s annual output is around 6,000 Metric Tons,so the market for 6,000 Metric Tons will be shared by other Aspartame manufactures since 2015 on the basis of Aspartame market will not be replaced by Sucralose, Stevia or other sweeteners.
And who will get the largest part of the 6,000 MT cake?
We estimate another biggest Aspartame manufacturer in Japan-Ajinomoto will get the biggest part of it, for many Nutrasweet’s customers are willing to cooperate with a abroad company, quality and brand reputation are the same with Nutrasweet. Some think China Aspartame is made with low quality and it is unnessary to try it. Others know Aspartame manufactured in China is okay, can also be used in production, but the quality standard cannot reach to Nutrasweet and Ajinomoto standard, such as mesh distribution, flowability, solubility, squeezability or other chemical and physical items.
To the top user, they held the view that Nutrasweet and Ajinomoto brand is more reputable than any other Aspartame manufacturers in China. Besides the brand reputation, the most important is that these two companies not only offer you Aspartame, but give you a solution according to your production. So they choose these abroad brand priority. Maybe this view is the same meaning as Chinese proverb “be matched for marriage”.
Of course, Ajinomoto is the best Aspartame manufacturer as Nutrasweet, and Ajinomoto have many products and its branches are over the world.
However, there are three question for Ajinomoto to get large part clients from Nutrasweet.
Question 1:At present, Ajinomoto’s main market is in Europe and South America, but Nutrasweet’s main market is based on US, how should large US clients turn to Ajinomoto in US market, we think this would be a problem need Ajinomoto to overcome in this year.
Question 2:From our estimate, Ajinomoto now the capacity is around 10,000 Metric Tons, and the present production is 8,000 MT, so it can only get 2,000 MT in the most degree.
Question 3:With the intense competetion from Chinese manufactures, Aspartame price now is at a low level, Ajinomoto said it make little profits than before. With so little profits, is Ajinomoto still interested in enlarge their production to get more orders?
How about China manufacturers opportunity for this cake?
Of course, Nutrasweet’s stop manufacturing Aspartame news is definitely a happy news to China manufacturers, but here we will confront three problems:
These days, as a reason of many disorderly emissions from industrial production, many provinces was covered with hazein recent two years in China.Now the government put much force in Environment protection, many corporations based on chemical production along Changjiang River / Yangtze River have to be shut down because of the pollution. And four China Aspartame manufactures,their factories are located near Changjiang River / Yangtze River, so the pollution problem will restrict their production more or less.But we, Yamei, put 20,000,000RMB to improve environment protection, and set up a 6,000 cube meter sewage treatment tank in 2011, ensuring deal with engough waste water and make sure the waste water complies with emission standard everyday. So stable supply is also the main focus when a buyer audit a supplier.
2)Demand exceeds supply
There are seven manufacturer in mainland, the total output around 17,000 MT per year, and 2,000 MT will be remained to see in the next year.So if next year Nutrasweet stop production Aspartame, I think this remained 2,000 MT would be digested.
The global market demand: 15,000 MT(China) + 6,000 MT(Nutrasweet) + 8,000 MT(Ajinomoto)=29,000 MT
This year, global Aspartame supply: 17,000 MT(China) + 6,000 MT(Nutrasweet) + 8,000 MT(Ajinomoto)=31,000 MT
Next year, if no accident, the supply will be 17,000 MT(China) + 10,000 MT(Ajinomoto)=27,000 MT
Just from the digits, the market needs another 2,000 MT. So it is a good opportunity for Chinese manufacturers to share it.
3) The quality challenge for some manufacturers
Nutrasweet provide many Aspartame types,different mesh size,different solubility and so on for various applications. Some simple type, such as Aspartame regular Powder, we think almost every manufacturer can do the the quality similar with them. But some other types maybe a little difficult for some suppliers.
In addition, For many clients, Nutrasweet not only provide Aspartame for end users to satisfy with their production, but also give a solution to solve their problems. Ajinomoto also do well in the aspect.
Giving solution is playing more and more important in the market for manufacturers, as it is a core competitiveness.
To improve ourselves, We Chinese manufacturers need put more energy to innovate Aspartame new types for different applications or have special advantages over other competitors.
We, Yamei, 15 years in the market, main market is US and Europe, realising new types or quality similar to Nutrasweet and Ajinomoto will help us a lot when a customer need good quality but lower price than Nutrasweet and Ajinomoto. When confront with such situation, we send our new R&D Aspartame samples with good solubility or good fluidity to them according to their application. It is obviously will enhance samples approved chances and help us to get the orders.
How about the market price trend?
People are easy to accept the price go down, but are not willing to hear the price will go up.
Generally ,the market average price in 2015 will not go up much or even will go down.
When a buyer want to buy Aspartame from a seller, many buyers try to get a lower price if possible, plus there are many choices in the market, so the seller is willing to offer a low price to get the order. This is for Ajinomoto and China biggest manufacturer Sinosweet.
We Yamei are appreciated when clients who used Nutrasweet before turn to try to us. We also would like to offer better price for them.
How about Sucralose and Stevia market, it will influence Aspartame market share?
Though Aspartame is proved safety by FDA and EFSA, there are some opinion that eating foods with aspartame would lead to cancer or other body problems.
Sucralose can be used wildly in bakery products while Aspartame is limited in this fields as Aspartame is not stable in high temperature. But Sucralose have much metal aftertaste.
But now the price is nearly three times higher than Aspartame, so some clients will choose it replace aspartame, not other reasons only they think Sucralose is much safe than Asparatme.
Stevia taste is not good, too bitter, so if you want the products with low calorie, Aspartame, Sucralose or Acesulfame-K is necessary be added together. If you do not very strict in controling low calorie, you can put sugar together. Stevia market will not influence Aspartame market very much.
How about the large end users’ thinking of Aspartame market?
Coca-Cola, Pepsico and Kraft are the biggest Aspartame end users in the world, their annual bids are signed every three years, no much aspartame usage reduction from these companies, so in the next three years Aspartame market will be better than now.
But what if some guy buy Nutrasweet Aspartame and L-Phenylalanine plants and still manufacture Aspartame? It is hard to estimate about it.
Aspartame market in 2015
Aspartame tax rebate changes from 9% to 13% in 2015, some buyers want to get the 4%, and some suppliers are willing to offer 4% to buyers to get more market share. So it make the maket more competitive.
Which makes the market more worse, Pepsico announced it will not use Aspartame in diet coke in April, 2015. Pepsico said Aspartame was not safe and they would like to replace aspartame with sucralose.
The safety of APM has been approved by U.S. FDA and the Europe. It should not be the main reason for the sales drop and the change of APM of diet Pepsi.
This is driven by consumers. It’s out of our control. What we can do is to make the quality better.