Zsweet sugar substitute to launch this month

[Guest guest]

Tuesday, January 17, 2006

Zsweet sugar substitute to launch this month

It is the first of several diet food products for San Clemente

company Ventana Health Inc.

By NANCY LUNA

The Orange County Register

Tim Avila toiled for months in his San Capistrano kitchen

concocting a diet food using an old favorite: sugar.

A consultant with no academic training in food science, Avila set

out in 2001 to create an all-natural, zero-calorie sweetener using

erythritol, a little-known sugar alcohol. Avila, chief executive of

Ventana Health Inc. in San Clemente, eventually formulated Zsweet

and began selling the diet sweetener this month online and at health-

food stores in five states, including Florida.

It has not hit grocery shelves in Orange County but is expected

soon, Avila, 40, said.

" It's just about ready to explode, " he said.

Avila and his partners raised nearly $1 million in capital to form

Ventana in 2004. It plans to manufacture and market diet smoothies

and nutrition bars made with Zsweet. The company is making a grab at

health-conscious dieters who have long complained of a lack of

natural, zero-calorie sugar substitutes on store shelves.

" There's a huge market out there wanting natural noncaloric

products, " said Janet Little, a nutritionist for Henry's Farmer's

Market, which runs five grocery stores in Orange County.

That makes Zsweet well-positioned to become a food marketer's dream:

a category pioneer.

" If this is a healthy alternative that really is natural, then it

might have a great chance, " said Hillari Dowdle, editor in chief of

Natural Health magazine.

Still, Dowdle said Ventana will have some " consumer-education

hurdles " marketing Zsweet against Splenda, which has turned the

sugar-substitute market on its head. In 2003 Splenda sales accounted

for one-third of the $309 million market, according to the latest

market-research data from Packaged Facts.

Industry watchers say Splenda's appeal with consumers has been

its " made from sugar " campaign and its ability to be used in baking.

" Splenda is not natural, but they've marketed it so well that people

think it is natural, " said Little, adding that consumer demand

forced Henry's to stock Splenda.

Avila said he has no desire to persuade loyalists to Splenda or

aspartame-based sweeteners to buy Zsweet. Instead, he's going after

people who reluctantly use artificial sweeteners because they have

few natural alternatives.

" This is an all-natural, worry-free solution, " Avila said.

But nutrition experts caution that most artificial sweeteners such

as Splenda are safe and promote a healthier lifestyle because they

reduce caloric intake.

" I'm a proponent of tools that people can use to lose weight, " said

Stacey Bell, registered dietitian with Ideasphere, the New York

maker of nutritional supplements under the brands Twinlab and

Nature's Herb.

Bell and Little also cautioned of the side effects of sugar

alcohols, frequently found in sugar-free candy, chewing gum and low-

carb products. Zsweet is made with erythritol (pronounced ee-RITH-ri-

tol), which Little said " can cause intestinal distress " that leads

to gas, diarrhea and bloating.

The other hurdle Zsweet must face is price.

A half-pound of Zsweet sells for $15, compared with $7.49 for a

package of Splenda of roughly the same size.

Still, Ventana is betting its consumer, whom Avila describes as an

avid " label-reader " with a household income of $75,000 or more, will

be willing to pay the price.

" We want to present this as a lifestyle product, " said Corella,

Ventana's vice president of marketing and Avila's high school buddy.

Avila drummed up the idea of creating a zero-calorie natural

sweetener eight years ago after stumbling upon the granular

erythritol while working as a salesman at Metagenics, a privately

held dietary supplement maker in San Clemente.

Avila's job required him to bone up on ingredients on the company's

400 natural products sold to medical providers.

" I gave myself an instant education in food science, " said Avila, a

high school graduate who never went to college.

He soon learned that erythritol was a rarely used sugar alcohol, or

polyol, that looked, tasted and felt like sugar. He immediately saw

its potential because it didn't have a powerful, sweeter-than-sugar

taste like some artificial brands.

After quitting Metagenics to become a food-manufacturing consultant,

Avila began experimenting with erythritol in his home. He tried to

craft a perfect blend of natural ingredients to make it taste and

measure spoon for spoon like sugar.

In 2004, he formed Ventana in preparation of this month's Zsweet

launch.

The market seems ready.

In 2003, retail sales for sugar substitutes jumped 18 percent to

$309 million, according to Packaged Facts, a division of

marketresearch.com. In 2004, shoppers also shelled out $45.8 billon

on natural foods.

To create a buzz for Zsweet, Corella, a former music promoter, is

turning to guerilla marketing tactics such as posting information

about Zsweet on Web logs and developing search-engine formulas to

ensure the brand is the top hit on Google.

The company plans to hit the road with the Zsweet van to gain street

credibility by offering samples to people outside health-food

stores. By the end of the year, Ventana expects to launch a line of

smoothies and powdered drink mixes made with Zsweet. Avila also

hopes to license the use of Zsweet to diet-beverage makers.

The product is already gaining buzz.

The best-selling book " The Perricone Weight-Loss Diet " mentions

Zsweet as an option for consumers looking for a natural diet

sweetener.

A popular health-food chain, Akins (not to be confused with low-

carb's Atkins), has been one of the first retail outlets to give the

product a shot. The Oklahoma-based chain began stocking Zsweet

earlier this month at its 13 Florida, Oklahoma and Midwestern stores.

Ann O'Dell, Akins' nutrition director, said it's too soon to

tell how well the product will do, but acknowledged the need for it

on shelves.

" This category has been evolving, " O'Dell said. " We were excited to

see something to come out like this because this measures like sugar.

" For us, that's a real selling point. "