Publications
Publications
- November 2009 (Revised March 2013)
- HBS Case Collection
PureCircle
By: David E. Bell and Aldo Sesia
Abstract
In December 2008, the U.S. Food and Drug Administration (FDA) determined that high-purity Rebaudioside A (Reb A), a natural and calorie-free product that a young company named PureCircle manufactured from the Stevia plant, could be used in beverages, foods, and as a table top sweetener in the U.S.—the largest market for sugar and sweeteners in the world. While the FDA's determination was the breakthrough the company had hoped for, much remained uncertain—most obviously, would consumers accept Reb A as a substitute for sugar or the myriad sweeteners already established in the market place? The potential seemed high given consumers' growing concerns about obesity and diabetes. Yet, nothing was certain. What worried the company's leadership was the prospect of Reb A taking off—that is, being widely accepted by consumers and used by food and beverage (F&B) companies in mainstream mass-market products such as carbonated soft drinks—and the timing of the take off. If Reb A did go mainstream PureCircle would need to at least double its capacity to secure its position in the industry. If leadership overbuilt the company's capacity and Rebaudioside A ultimately remained a niche product they would severely jeopardize PureCircle's viability. Yet if leadership waited too long, the opportunity to create substantial wealth for the company's shareholders would be lost. As it was, the company's founder and CEO had already gambled by investing in enough production capacity for acceptance in the niche beverage market—before a market for Reb A had been established.
Keywords
Customer Relationship Management; Investment; Globalization; Leadership; Risk Management; Product Launch; Production; Performance Productivity; Business and Shareholder Relations; Food and Beverage Industry; United States
Citation
Bell, David E., and Aldo Sesia. "PureCircle." Harvard Business School Case 510-032, November 2009. (Revised March 2013.)