Fengyang, Anhui - Sweetener producer GLG Life Tech Corporation unveiled its first zero-calorie beverage production facility over the weekend in China, following in the footsteps of international food and beverage giants to cash in on Chinese consumers' growing health awareness.
The Vancouver-based company invested $25 million in the facility in Anhui province, which will produce more than 30 types of zero-calorie beverages, including vitamin water and fruit juices.
The factory is part of GLG's new unit, All Natural and Zero Calorie Beverage and Foods Company (ANOC), a joint venture between GLG and China Agriculture and Healthy Foods Company Ltd. GLG holds an 80 percent controlling stake in the unit.
The beverages will use GLG's self-produced stevia sweeteners, which is 300 times sweeter than sugar with virtually none of the calories, and thus without sugar's unhealthy side effects.
GLG is the world's leading producer of stevia sweetener, accounting for nearly 80 percent of global production. It has supplied the sweetener to Starbucks, Coca-Cola Co and PepsiCo Inc for years. But it has decided to expand downstream in recent years after seeing great potential in China's healthy food and beverages industry.
"Diabetes, obesity and other chronic illnesses are on the rise in China. And people are growing more health-conscious as they get richer, creating a fast-growing market for selling health foods and beverages," said Wang Qian, president of ANOC.
According to a survey published in March in the New England Journal of Medicine, 10 percent of Chinese adults already have diabetes and another 16 percent are on the verge of developing it.
China has overtaken India to become home to the most cases worldwide, with 92 million diabetics, the survey says.
Wang said the products will be distributed throughout China - except for the Inner Mongolia autonomous region - by early next year, with total sales for 2011 estimated at 100 million yuan ($15 million).
Three more factories will be built next year in Jiangsu, Anhui and Shandong provinces to rev up production.
Over the next 10 years, the company plans to build 1,000 production lines in China and expects annual sales to reach 100 billion yuan ($15 billion).
"That estimate is a reflection of our confidence in the growth of China's wellness foods and beverages industry," Wang said. "And our dominant position in upstream resources gives us an edge in competing with our rivals."
In 2009, sales of health foods and beverages in China increased 28 percent from five years earlier to $1.5 billion, according to Euromonitor International, a market research firm.
International food and beverage giants are rushing to bring healthy products to China to grab a share of the growth.
GLG's downstream expansion came after the Swiss food giant Nestle announced this year that it would invest $500 million globally over 10 years to develop foods that can claim health benefits. The company is testing five of them in China.
Meanwhile, PepsiCo is also developing drinks and snacks inspired by traditional Chinese medicine, as part of a $2.5 billion expansion into China over the next three years.
Coca-Cola is hoping to attract customers to pay more attention to their health with its Vitaminwater, which it launched in China last year using stevia sweetener from GLG.