A Fresno County, Calif., alfalfa seed breeding company and dealer is investing millions of dollars in what it believes is a global cash crop that will sweeten its bottom line big time – stevia.
S&W Seed Co., based in Five Points, has entered into a five-year agreement with PureCircle Limited, said to be the leading producer and marketer of stevia, a sweetener that has drawn significant interest because it is 300 times sweeter than sugar, has no calories and has no negligible carbohydrates.
Although the growing of the plant remains in the research stage in neighboring Madera County, Mark Grewal, CEO and president of S&W, is bullish on the new crop.
Asked if it could be “the next hot crop” to rival almonds - which replaced thousands of acres of grapes, tree fruit and row crops statewide – Grewal said, “I think it’s bigger than almonds; it will replace sugar cane and sugar beets.”
But many questions remain to be answered, acknowledges Grewal, a self-acknowledged risk taker who welcomes change and who was formerly vice president of ranching and a member of the board of directors of the J.G. Boswell Co. farming operation in Corcoran.
“This is one that will happen,” he says.
But he doesn’t know:
- What the acreage will be. (His company is preparing a 100-acre site to be planted this fall for harvest next spring.) “It could be 1,000 acres by next year,” Grewal says.
- What the yields will be.
- What farmers who contract with S&W can make out of growing the popular sweetener. “We don’t have a profit model for the farmer,” Grewal says.
Among the other variables still to be sorted out are just how many cuttings a grower can make from the crop. It may be possible to get up to four or five cuttings, and the crop – like alfalfa – can last for five years.
It is believed to be the first large scale planting of stevia in the U.S. Currently, PureCircle, which has its global headquarters in Kuala Lumpur, Malaysia, sources its stevia from countries that include China, Thailand, Paraguay, Kenya and Indonesia. But its biggest market for stevia-derived sweeteners is the U.S.
In a press release, Dorn Wenninger, PureCircle vice president of supply chain, said, “We’re committed to sourcing stevia in areas as close to our customers as possible. Our agronomists are sharing best practices from our operations in Asia, Africa and South America with S&W Seed Co. as we work to provide large scale volumes of stevia leaf for American consumers.”
Stevia market at $12 billion in 2012?
Grover Wickersham, chairman of S&W, said the market for stevia is projected to be more than $2 billion by 2012.
PureCircle is traded on the London Stock Exchange. In May, S&W went public, selling stock traded on the NASDAQ exchange, to raise $15.4 million from Wall Street to launch stevia production and to explore other crop possibilities. Grewal does not say exactly how much is going into stevia research and development, stating that it is “in the millions.”
One of the keys to that research is finding ways to mechanize the harvest in order to make it economically feasible in the U.S., where labor costs far exceed those in most of the supplier nations.
“This is like cotton in the Civil War days, it’s in its infancy,” Grewal said. But just as cotton picking and processing was mechanized, he believes, the same can happen with stevia.
Koren Sihota, stevia program director for S&W, said a modified spinach harvester will likely be used to harvest the company’s first crop. The plants will be mechanically dried and equipment will be used to for de-stemming.
Sihota said S&W is working with a Fresno nursery that will grow transplants from seed and in time S&W “is prepared to build a nursery as well if necessary.”
Dried material would be shipped to PureCircle for processing out of ports that could include Stockton, Oakland and Long Beach. In time, Sihota said, S&W may develop its own processing facility in the San Joaquin Valley.
Sihota showed how the plants are grown on 12 acres near Chowchilla where S&W has test plots and plans to step up acreage at the huge Triangle T Ranch. The ranch covers 21 square miles, 13,000 acres devoted to alfalfa, cotton, feed lot operations and other uses.
The initial plantings look very little like a field of dreams. There were setbacks early on in the research when deliveries of seeds and plants were delayed because of questions raised by customs, issues that have since been resolved.
“There was some die-out,” Sihota said, “because some seedlings were delayed in planting until July; we wanted to transplant in spring.”
Stevia expected to thrive in Central Valley
But, he adds, stevia is a hardy plant that is expected to thrive in Central Valley conditions that include adequate chilling hours, temperatures that usually do not bring a hard freeze and long summer days.
To keep weeds out, drip tape is buried beneath the plants. The plant’s roots only extend about 6 or 7 inches into the soil.
The plant can grow to between 2 and 2.5 feet tall. Sihota said he working with five varieties – including material that came from China and India – to find out what will work best in the Valley. Plant breeding continues.
As with alfalfa, thick plant density is not desirable, resulting in fewer leaves and more stem material. The plants could range from 20,000 to 50,000 per acre. It’s not unusual to get a harvest of 2 tons per acre of dried leaves.
Clinton Shock, an Oregon State University professor in crop sciences and a consultant for S&W, wrote an article on stevia that was featured in California Agriculture magazine for September-October 1982.
Then a graduate student at the University of California at Davis, Shock worked with a stevia plantation in Paraguay and grew plants in Davis, Southern California, and later, Louisiana.
But much of Shock’s work came before consumers turned to artificial sweeteners like stevia. It was an idea before its time.
“Look at where we were 30 years ago,” Grewal said. “We were not as obese; there was not the problem with diabetes. Look at how we eat now, with sodas replacing milk.”
Another key to the intensified interest in the plant is the federal government’s approval of stevia for human consumption less than two years ago.
Until then, said Rod Cook, PureCircle’s director for agricultural development, the plant was recognized as an herbal supplement. It was grown mostly by backyard gardeners and suppliers to farmers markets.
Cook, who is based in Olympia, Wash., said the industry received a significant boost 30 years ago when Japan banned some artificial sweeteners and a Japanese company called Morita Limited turned to use of stevia out of China.
“It became a consumption hot spot,” Cook said.
Another breakthrough, he said, was PureCircle’s ability to refine the product using new technologies to extract the key components of the finished product, “filtering molecule by molecule.”
“I think the future for growing stevia in California looks quite bright if a few challenges can be met,” Cook said. “Currently, it’s gown in Third World nations and requires a lot of labor. If we can adapt our mechanical knowhow to do it economically, that will be important.
“Another challenge will be the source of plant material. But once that is established and once it is known that it is adapted to a particular location, it should do well. Early on, it does need water.”
As for growing the plants in Fresno County, Cook said that’s a decided plus: “The entire world wants to know about where their food comes from. It shortens the carbon footprint, and those with large beverage firms and bakeries will be happier when they can get on a plane, fly to Fresno, walk into a field and say, ‘This is where our stevia is coming from.’”