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4-Traders Homepage  >  Equities  >  Swiss Exchange  >  Nestlé    NESN   CH0038863350

NESTLÉ (NESN)
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Delayed Quote. Delayed  - 10/18 04:39:57 pm
84.9 CHF   +1.19%
10/16DJThe Search for Sweet -- WSJ
10/16DJThe Future of Protein (the Meatless Variety) -- WSJ
10/16NESTLE SA : quaterly sales release
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The Search for Sweet -- WSJ

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10/16/2017 | 07:54pm CEST

(Editor's Note: This item originally appeared earlier today. It is being sent to run on additional wires.)

 
By Annie Gasparro 

Food makers are racing to find acceptable alternatives to sugar. But it's hard to replace a taste that so many Americans have grown to love.

Traditional sweeteners -- from sucrose, or table sugar, to high-fructose corn syrup -- are an increasing concern to consumers and lawmakers, who see them as a key culprit in America's obesity and diabetes epidemic.

Now researchers at food giants, startups and universities are looking for new ways to make foods sweet without putting people's health at risk. Some are testing out natural zero-calorie ingredients like monkfruit and South American root extracts that are so intensely sweet that they can add flavor without calories. Others are manipulating granules of sugar to make them taste sweeter. They're also developing new ingredients that will block bitter taste receptors and make food seem like it has more sugar than it does.

Nestlé SA scientist Olivier Roger, who's leading the food titan's sugar-reduction effort globally, says many companies are working on finding answers. Adding to the urgency: Some companies, like Nestlé, have self-imposed deadlines for lowering sugar content in food.

But there are big challenges to removing what has been a key ingredient in processed food for over a century.

For one thing, there are side effects to removing sugar: It not only adds sweetness but also functions as a preservative and adds texture, as well as contributing to the overall volume of food. Whole recipes have to be rethought when it is removed. And after finding an alternative, companies may face higher costs, supply constraints or regulatory hurdles related to the substitute ingredients.

"It's very difficult, very complex. We still don't have the magic solution that would replace sugar," Mr. Roger says.

The push comes amid a widespread effort to put the brakes on sugar consumption. In a survey released by market-research firm Nielsen earlier this year, 22% of respondents said they already restrict their sugar intake. Most major food makers, including Mars Inc., General Mills Inc. and Kellogg Co., have pledged to reduce sugar in candy, children's cereals and other products.

Last year, the federal government called out sugar consumption as a problem in the U.S. Dietary Guidelines, recommending for the first time that people consume no more than 10% of their daily calories from added, or refined, sugars. Americans currently average 13% of their calories from added sugar, the report says.

Regulators also said last year that food and beverage makers will be required to disclose on nutrition labels how much sugar has been added to products, as a distinct item within the total sugar content. The FDA recently extended the deadline for the new labels to Jan. 1, 2020 from July 2018.

Cutting the amount of sugar will be a steep task. More than 22,000 products in the U.S. contain high-fructose corn syrup, according to food labels cataloged by Nielsen and Label Insight, a provider of food-label data. Even foods widely seen as healthy contain added sugars. For instance, among yogurt products, 86% contain added sugars of some kind, as do 79% of shelf-stable juices and drinks.

Years ago, when consumers were trying to cut calories in general, artificial sweeteners such as aspartame (Equal) and later sucralose (Splenda) gained popularity, and scientists thought they had cracked the code. Now those products have come under scrutiny by consumer advocates over health concerns. While there is still a debate among the scientific community, the Center for Science in the Public Interest, CSPI, warns that artificial sweeteners may post a slight risk of cancer. More than half of Americans surveyed by Nielsen said they avoid those artificial sweeteners.

One avenue researchers are exploring is altering sugar itself. Nestlé, which adds sugar to chocolate bars, ice cream and less-obvious products like frozen dinners, says it has discovered a way to make sugar particles dissolve faster when people eat them. That allows people to taste the sugar immediately so that the product seems sweeter, allowing the company to reduce sugar content by up to 40%.

Hershey, meanwhile, says it has patented technologies that boost sweetness by altering the surface area and shape of sugar particles in chocolate. It wouldn't provide details of how shape impacts taste, but some scientists say that when there's more surface area to touch the tongue's taste receptors, a food can seem as sweet with less sugar.

DouxMatok, an Israel-based food-tech company, says it has patented technology that intensifies the sweetness of sugar by attaching sugar molecules to what it calls a carrier that targets certain taste buds and makes the sweetness linger. That can reduce the sugar content in food by up to 40%, depending on the product, the company says.

More than sweetness

Even if scientists find a way to reduce sugar, that isn't the end of the problem. For one thing, if you take out sugar, you end up with a product that isn't, well, as big as it used to be.

The high-tech sugar Hershey has developed allows the company to use less, but it needs to add something to make up the volume, or its chocolate bars would shrink. Replacing sugar with more of the other ingredients -- such as milk or cocoa butter -- can add fat, and that's viewed as a negative.

If you take out 30 grams of sugar, you have to put in 30 grams of something else, and it also has to be healthy, says DouxMatok Chief Technology Officer Alejandro Marabi. "Every category has different challenges. Chefs and food scientists every day will have recipes they try and test," he says.

Sugar also serves a lot of functions in food beyond making it sweet, and they aren't easy to replicate. "What many people may not realize is that sugar plays several roles in chocolate," like affecting the texture, a Hershey spokesman says.

For instance, Nestlé's Mr. Roger says, "if you remove sugar from ice cream, you have an ice cream that is very, very hard."

Adding fiber, however, can soften it. "You have to have a combination of different ingredients to overcome different gaps that we have when we reduce sugar," he says.

Sugar also acts as a preservative because it binds with water, not allowing bacteria to grow. Removing it from bread can enable mold to grow faster.

Some researchers now say natural, high-intensity sweeteners that come without calories are the future of sweetness. But current alternatives such as stevia and monkfruit can have a bitter aftertaste.

Researchers around the world are testing ingredients derived from mushrooms that block bitterness. They can be added to coffee drinks and dark chocolate to reduce the amount of sugar. Or they can offset the unwanted aftertaste of those natural zero-calorie sweeteners.

But even when they find the right combination of ingredients, it can be difficult to source them. One all-natural sweetener that has recently become a popular candidate for tests is a syrup from yacon, a South American root that is relatively hard to find in the U.S. Even if it works great, it's currently too expensive, one food-company scientist says.

Some companies are finding solutions closer to home. Ahold Delhaize NV, a European grocer with nearly 2,000 stores in the U.S., says it removed 500,000 pounds of sugar from its own brands in 2015 and 2016. For its juices, food scientists found sweeter varieties of apples and other fruits, says Jacqueline Ross, director of product development for Ahold USA. "It's important to take out [added sugar], but also to not replace it with something else that may not be liked, like artificial sweeteners, " she says.

Allison Fickett, a dietitian and regulatory manager at Daymon Worldwide, a grocery consultancy, says some of the company's clients are reducing added sugar in products that contain fruit by picking it when it's riper and cooking it a bit longer to enhance caramelization. That method "doesn't require reformulating or investing in new food technology," she says.

Eve Crampon, senior product developer at Stonyfield yogurt, says she and her team have worked for more than two years to reduce the sugar in its yogurt. They screened the thousands of strains of bacteria cultures until they found the right combination that produced a less tart yogurt and thus required less added sugar. "Finding the right strain that would be mild without posing other challenges took a while. We had to test a lot of strains," she says.

---

Ms. Gasparro is a staff reporter in The Wall Street Journal's Chicago bureau. Email [email protected]

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Financials ( CHF)
Sales 2017 90 354 M
EBIT 2017 14 100 M
Net income 2017 9 978 M
Debt 2017 14 216 M
Yield 2017 2,85%
P/E ratio 2017 25,59
P/E ratio 2018 23,42
EV / Sales 2017 3,05x
EV / Sales 2018 2,97x
Capitalization 261 B
Chart NESTLÉ
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Nestlé Technical Analysis Chart | NESN | CH0038863350 | 4-Traders
Technical analysis trends NESTLÉ
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 29
Average target price 87,5  CHF
Spread / Average Target 4,2%
EPS Revisions
Managers
NameTitle
Ulf Mark Schneider Chief Executive Officer & Director
Paul Bulcke Chairman
Magdi Batato Executive Vice President & Head-Operations
François-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
Stefan Catsicas Chief Technology Officer & Executive VP
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