Stevia Production Cost Analysis Essay

The cost of producing any commodity is borne by the farmer. Sugar cane-based sugar is not as profitable for farmers as stevia. The cost and price analysis of stevia and sugar clearly shows that stevia is technically possible and economically practical. When companies such as Redpath Sugars buy stevia plants from farmers to process, the margin for profit can be set higher as the product is a novelty and consumers are ready to pay a little extra for it. Therefore, the production of stevia will help the company in cost comparisons with sugar.

The sugar that is used in everyday life is highly processed and requires time, money, and energy to grow. It is cheaper to buy sugarcane molasses directly from the farmer, but this also lowers the profit margin.

Health benefits

Unlike other zero-calorie sugars that are produced in a lab, stevia is a plant-based sugar alternative that is 300 times sweeter than regular sugar. This means that less quantity is needed to sweeten food or drink. Stevia is extremely beneficial to those suffering from type 2 diabetes and obesity as it does not spike blood sugar rapidly.

As it is needed in exceptionally low quantities, consumption of stevia adds no meaningful calories to the diet. It aids in weight loss, increases appetite, and increases sensitivity to insulin. Sugar, on the other hand, has no known health benefits.

Consumer Demands

Consumers of today are mindful of their caloric intake and their desire to cut back on sugar without sacrificing taste, which is creating a perfect market for stevia sales. Given that stevia adds no significant calories to the diet, the demand for the product is skyrocketing in all age demographics.

Stevia is the holy grail for geriatrics suffering from diabetes. Parents are also concerned about their children’s sugar intake coming from candies and other processed foods. It is understood that the demand for such sugar substitutes is greater than ever before Because stevia cannot mimic the color, taste, or texture of sugar, bakers and other large-scale food producers would still need it.

Marketing techniques

Stevia can be marketed in a variety of ways. The first is as the healthier alternative to sugar, whether it be as weight loss sugar, zero-calorie sugar, or diabetic control sugar. The market is wide open for sugar substitutes as these are the needs of the hour. A novelty product such as stevia will be seen in a positive light as awareness of the ill effects of sugar is well known to consumers.

Conclusion

Sales are driven by consumer demands and the demands of the consumers change from time to time. To stay relevant in the business we must adapt to consumer trends. Stevia offers a myriad of health benefits and is easier to market than sugar. It supplies higher profit margins and is in demand by the consumers. 

Recommendations 

When comparing sugar and stevia, stevia comes out on top in every aspect of comparison. We at Redpath Sugar would benefit greatly if we shifted our major production from sugarcane-based sugar to plant-based sugar that is stevia. It helps the farmers, the processors i.e. Redpath sugars, and more importantly, our consumers.