In two years stevia, a plant used for centuries by Paraguay's Guarani Indians, has shot to prominence in products by Coca-Cola, Danone and Merisant.

Encouraged by distrust of artificial sweeteners and demand for natural products, they have turned to extract of stevia, which is up to 300 times sweeter than traditional beet or cane sugar.

The problems are the aftertaste, the cost, and possible hurdles in defining it as natural in some European Union markets.

Initial sales and projections are impressive but the plant's extracts have a strong aftertaste, often compared to liquorice, and are far more expensive than artificial sweeteners including aspartame, saccharin and sucralose.

To ease stevia's taste products like French sugar maker Tereos' Beghin-Say and Coca-Cola's Fanta Still - trialed with stevia - still include sugar in their recipe

Tereos PureCircle said that out of the 604 new products containing extracts of stevia launched worldwide in 2010 - up from 373 in 2009 - 60 percent still contained sugar.

Poor consumer feedback also led dairy giant Danone to work on a new recipe for its stevia yoghurts marketed under its leading low-calorie brand Taillefine in 2010.

"We are trying to find solutions to erase this liquorice taste but it's not easy," Marilise Marcantonio, communication director for Danone Fresh Products, said. "Consumers are looking for natural products - but not at any price."

Some scientists also note that a technique to extract Rebania-A, derived from stevia leaves, through ethanol, rather than water, to obtain purer and sweeter products could mean stevia may not be able to be marketed as "natural" in some EU countries, undermining the current marketing strategy.

"They are advertising stevia as a miracle," marketing consultant Sam Waterfall said. "If consumers begin to feel they are misled, this could be a real disaster."

KEY FRENCH MARKET

France is keenly watched as a testing ground for Europe, having cleared stevia-based products in late 2009. New checks and administrative hurdles delayed its approval at EU level until November 2011.

Stevia has been used for decades in Japan and has spread in the United States since 2008, where sales rose over 60 percent in 2011.

Since early 2010 its extracts have been used in France in low-calorie products ranging from soft drinks to yoghurts, jam and tabletop sweeteners, with some products recording triple-digit rises in sales last year.

"It's a revolution. In two years an ingredient has been able to turn the sweetener market upside down," said Olivier Badinand, marketing director for Europe of Merisant, maker of Canderel, leader in France's tabletop sweeteners market.

Stevia's market share among high-intensive sweeteners is still less than 1 percent but growth rates are impressive. Volumes jumped over 50 percent in France last year, and are expected to more than double in 2012 and quadruple by 2014.

"We are in a market that is really taking off," said Michel Laborde, head of sales and marketing at France's largest sugar maker, growers-owned Tereos, which has stepped into the stevia market through a joint venture with the world's leader PureCircle.

Paris will host on Thursday the World Stevia Organisation's fourth conference, gathering academics, industrials and sellers.

NEW PRODUCTS

Despite taste and cost misgivings, the surge in sales to date, EU clearance and growing demand for low-sugar products correlated with a rise in obesity, has prompted food giants to launch new products.

Coca-Cola's flagship drinks Sprite and Nestea's recipes have been modified to include stevia in a bid to cut the sugar level by up to 30 percent and will soon be available in French stores, Claire Meunier, nutrition manager at Coca-Cola France said.

The world's main producers of compounds from stevia's leaves like Rebaudioside A (Reb A) are Malaysia's PureCircle and U.S. agrigiant Cargill.

Tereos PureCircle Solutions, created in late 2010, sells stevia-based sugar products to food and drink makers in several EU countries including Belgium, Italy and Spain.

Tereos also replaced aspartame with stevia in some of its low-calorie tabletop sugar Beghin-Say Ligne and sales trebled in the year to March, Laborde said, adding that the firm was in the process of launching a stevia powder sugar in France.

"The French market was absolutely key. In light of the success, we had a model to apply, time to look at the results and adapt our strategy to other countries," Merisant's Badinand said. The firm has now deployed stevia in around 20 EU states.

Merisant sells a stevia version of its flagship product Canderel and created a separate brand, PureVia, whose products - powder and cubes - look like sugar but contain none.

PureVia sales grew by 81 percent and Canderel Stevia by 115 percent in the year to end-February to a total of 14.7 million euros and Merisant targets 20 million in 2012, Badinand said.

(Additional reporting by Naomi O'Leary in London; Editing by William Hardy and Veronica Brown)

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