Icon Foods Preparing for Q3 & Q4

Good afternoon fellow food manufacturers, formulators, and enthusiasts of Clean Label Sugar Reduction. It feels like it’s been a while, so I will dig right in. Remember two years ago when the word “supply chain” made everybody cringe? Luckily, those days are waning.

Let’s acknowledge the 500 lb. gorilla in the room: the pandemic threw a wrench into the works. Factories shut down, shipping routes disrupted, and demand for certain ingredients like allulose and erythritol skyrocketed while demand for others plummeted. It’s no wonder the supply chain struggled to keep up.

Despite past challenges, the global food ingredient supply chain is still chugging along like the little-engine-that-could. It’s even gaining steam…I think I can, I think I can, I think I can.


KPMG Supply Chain Stability Index

KPMG Supply Chain Stability Index

Let’s not ignore the silver lining of all this—with supply chain disruptions came opportunities for innovation. Some companies found new and creative ways to get their ingredients and finished goods where they needed to go—whether that meant rethinking their production processes or finding new suppliers.

The food ingredients global supply chain is a complex and ever-evolving system that plays a huge role in our daily lives. There’s a whole world of logistics and innovation happening behind the scenes to make it all function. I know I have come out of this experience with a newfound appreciation for the humble shipping container.


What could be more thrilling than corn futures? Well, let me tell you my friends—not much. Corn is the primary input for most food ingredients—like allulose, erythritol, and most acidulants. It also comprises the substrate for most of the meat analogs that folks on a plant-based diet care so dearly about. The price of corn has that “trickle-down effect” if you will.

So, let’s talk about the state of corn futures. As of today, it looks like we’re seeing some steady prices. Corn futures for July delivery are currently sitting at around $6.70 per bushel—down from $7.35 last year at this time—which is decent considering all the craziness that’s been happening in the world (5).

There are always a lot of factors that can impact the price of corn futures. Weather patterns, global political unrest, and changes in demand can all play a role in determining whether we’ll see prices rise or fall. But for now, things are looking pretty darn stable.

As a matter a fact, this could be one of the most boring Market Intelligence Reports I have written. But, in this case, boring is good.


I, for one, am tired of high logistics costs. It’s about time we put on our happy dance shoes—there’s some good news. Logistic prices have been steadily declining for the past six months. But why the sudden drop in logistics prices, you ask? Well, it’s all thanks to technology, competition, and a massive drop in demand.

“China’s exports fell in May for the first time since February, adding to concerns that growth in the world’s second-largest economy could be faltering” (3). Here’s the top line on what is going on:

“Exports fell 7.5% in May from a year ago, far worse than the 0.4% decline predicted by a Reuters poll” (3).

“Imports for May dropped by 4.5% from a year ago—less than the 8% plunge forecast by Reuters” (3).

“The decline was so sharp that export volumes are below their levels at the start of the year, after accounting for seasonality and changes in export prices Julian Evans-Pritchard, head of China Economics, at Capital Economics, said in a note” (3).


China's Total Export Changes Market

China’s Total Export Changes, CBS News

Container rates have fallen for a sixth straight week and are now at the lowest they’ve been since May 2020, according to an index compiled by Drewry Shipping Consultants (7).

Ocean rates and reliability returning to pre-pandemic levels.

Ocean rates and reliability returning to pre-pandemic levels.

Container shipping rates are resuming their deflationary role.

Container shipping rates are resuming their deflationary role.

I think barring any unforeseen calamities, we should continue to see container prices fall. Good news for imported materials—particularly from China.


You might remember that former President Donald Trump imposed tariffs on thousands of Chinese goods in 2018 and 2019 in response to an investigation that found China was violating U.S. intellectual property laws and coercing American companies into transferring sensitive technology to Chinese firms as a condition of gaining access to China’s market. Shocking!

Deputy U.S. Trade Representative Sarah Bianchi, who oversees the USTR’s engagement with Asia said, “We are conducting the review from an analytical perspective. We’re not base casing any breakthrough in the trade relationship,” with China as part of the review (6).

No specific timeline for the completion of the tariff review has been indicated. However, Bianchi said it was “reasonable” to complete it by the end of 2023.

The Biden administration’s tariff review comes as inflation remains persistently high—although it has eased since the review began over a year ago. Treasury Secretary Janet Yellen had said that eliminating “non-strategic” tariffs would help bring costs for certain goods down to ease the strain on consumers; whereas Trade Representative Katherine Tai contended that the tariffs give the U.S. “significant leverage” over China (6). Ummm…ok. My thought is, “why can’t we just get along?” The president of the European Central Bank seems to agree with this position, and said that with rising political pressure on countries to choose between the U.S. and China, the result of such a thing would lead to less economic growth across the world and should be avoided by “all means” (4).


Here’s another 500 lb. gorilla—not that I would ever “fat shame” a gorilla, absolutely not. A few months back a critically flawed science paper hit the interwebs. It asserted that erythritol had been correlated with MACE—Major Adverse Cardiac Events. This includes heart attacks and strokes. The paper has been refuted and proven wrong over and over, but the consumers and retail buyers are going to hear what they choose to hear (6). If you would like to hear Icon Foods’ Position Statement regarding the safety of erythritol, please reach out.

I was trolling the floor at Expo West when erythritol was all the scuttlebutts. It was no laughing matter for those manufactures that were using this GRAS status healthy alternative to sugar. Now that some time has passed and buyers and consumers alike have shifted focus, I have many manufacturers asking if we have seen a pullback. This answer is no. In fact, we have seen a surge. Consumers have all but forgotten about the scare and are more focused on metabolic health, gut health, and losing that “Covid 19” they put on.

In the past, some buyers may have said the downside of erythritol was its relatively high cost compared to other sweeteners like sugar and fructose. That’s why the recent price drop is so exciting. According to industry reports, the price of erythritol has fallen by as much as 30% in recent months (2). While the exact reasons behind the drop aren’t entirely clear, some experts speculate that increased production and competition play a role. In early 2022, there was still a lot of hoarding by unscrupulous distributors and brokers who thought they were hedging the market. Those folks are now long in inventory and short on money. This is the first time in my 22 years in the industry that I have seen erythritol coming in cheaper than cane sugar and fructose. However, the low prices caused by excess supply will start to diminish in late Q3. I would get whilst the getting’ is good.

Icon Foods Erythritol Pricing Market

Of course, like any commodity, the price of erythritol could always go back up in the future. But for now, it’s a sweet deal for those who want a formula with a little sweetness without all the added sugar.

Call your Icon Foods representative and help us help you get your erythritol needs locked down through 2023.


There were several new high-quality producers of crystalline allulose that scaled in 2022. This created strong downward pressure on pricing. Prices dropped about 16% over the last quarter. There is a lot of over-stocked material available. However, prices remain high on crystalline allulose, while the price of allulose syrup remains stable. The conversion from glucose or starch is still not very efficient, so pricing could move out of reach with the price of corn. Allulose is one of the best non-nutritive sweeteners in my opinion. It is easy to formulate with and plays very well with other sweeteners and fibers. However, it remains pricey. With consumers tightening their belts for the new six months, keeping your COGS low should be a priority. Using monk fruit and or stevia with allulose will save you money and allow you to stretch the allulose further. If you need help with the conversion, Icon Foods can assist.

Icon Foods Allulose Pricing Market


Xylitol prices have been coming down and are stabilized. We get a lot of questions about why xylitol is so expensive. It comes down to water and power—a lot of water and a lot of power is required to get the d-xylose out of the corn cobs and corn by products. China also has a heavy tax on water usage and expensive electricity. The majority of xylitol is derived from corn cobs that do not birch as some people have been led to believe. Since xylitol is a corn derived ingredient, its cost will rise with the price of corn and when availability wains. This would be an ingredient worthy of hedging right now since polyols across the board are at historic lows.


Chicory root inulin is back in supply. While the war in Ukraine is not helping, supplies are good. The pricing is stable and even down some since a lot of manufactures moved away from chicory root inulin when the price was sky high and supply chains were non-existent. Jerusalem artichoke and agave inulin are certainly stabile, but somewhat pricey. It appears the abundance of chicory root inulin is putting downward pressure on the other inulin type fibers—but this may turn soon. Over the past couple of years, we have moved many of our customers to FOS. While FOS may not have the gelling properties of chicory, Jerusalem artichoke, or agave—mostly because of chain length—FOS still holds up well in most processes and is a fantastic prebiotic fiber. Mixing FOS with soluble tapioca fiber will give you excellent gelling and will stabilizes potential gastro-intestinal events that may occur from too much dietary fiber.

Icon Foods Fibers Pricing Market


Most of what I needed to say about FOS is in the inulin paragraph. Icon Foods is well stocked and well positioned with FOS. The price is very good and can save manufactures money compared to inulin. One of the best value propositions of FOS is labeling. It shows up well on the NFP, but also gives you flexibility on the ingredient statement. Because FOS can be called out as prebiotic fiber—when the market eventually shifts—you can go back and forth to inulin and FOS in your formula without having to change all your packaging. Food for thought when considering your fibers.

Soluble Tapioca Fiber

From an Icon Food prospective, soluble tapioca fiber is the gold standard for fiber. The price will not be driven up by the corn market. It is not manufactured in China, thus not subject to the 25% tariff. Functionally, it’s an RS4 resistant dextrose or resistant starch that adds fiber and works well in keto products, low-carb products, and in applications where fiber is needed to contribute to mouthfeel. Icon Foods is very well positioned in soluble tapioca fiber. Plus, the price is much lower than soluble corn fiber and you won’t have “corn” in your ingredient dec.

Icon Foods Low Intensity Sweeteners Pricing Market


China produces over 80% of stevia extract distributed around the world—having a finger on the pulse of this sweet commodity can really help with predictive analysis when it comes to pricing (1).

Until the year of 2021, the total cultivated area of stevia in China was 120,000 Chinese Mu (about 7,546 HA). The total inventory of stevia dry leaves in China reached its lowest level in 2022 due to undersupply and the larger consumption. In the past two years, the stevia cutting seedling and cultivation in China were hindered by the Covid-19 pandemic. During that time, most manufacturers consumed their dry leaves stocks. The supply volume of stevia leaves in 2022 was at an intermediate level. In the short term, some factories rushed to sell the stevia extract at a discounted price to get return capital in order to purchase raw stock inventory—thus applying downward pressure on the price of the finished product. This downward pressure is about to lift.

The cost of stevia cultivation includes cutting and propagating clones, land rent, labor costs, and fertilizers costs. The total costs can be 15,000 Yuan/tonne and the final price for the arrival at stevia factory is around 18,000-19,000 Yuan/tonne. In general, the cost of stevia dry leaves accounts for 55%-70% of the final product according to the different grades of stevia products. All interesting stuff.

Harvest usually occurs in early September. That means what extract is in stock now won’t be replenished until sometime in October. Bioconversion and enzymatic process will take some of the pressure off, but if your need is leaf extract or organic, I would lock in now. Prices will go up in the next few months, but should pull back in the late first quarter or early first quarter 2024.

Monk Fruit

Monk fruit remains the belle of the ball for natural high intensity sweeteners. There was a significant spike in price in 2022 followed by stabilization in Q2 of 2023 after a very solid harvest in September of 2022. There continues to be slight downward pressure on pricing, but mostly stabilization. The excellent harvest is helpful. There is a selloff of 2022 material that is putting some nice downward pressure on pricing as suppliers try to churn remaining stocks. Prices are stable right now, but around August 2023, supplies will become eager and this will put upward pressure on pricing. You probably have until the end of July to scoop up some deals.


I had some high hopes and optimism for the first half of 2023 and, guess what? I wasn’t disappointed. Private equity has put the pinch on some of the start-ups, but they are bootstrapping and getting by. Raw materials are affordable, and in the case of erythritol—darn cheap. Freight has come down a whole lot, making logistics run a lot smoother. Once the trucker strikes are over, that will stabilize things even more. Get while the getting is good. The low prices aren’t going to stick around forever. Stock up, but don’t let yourself get cash strapped. Money is not cheap right now and PE is tight fisted.

Thank all of you for your kind comments regarding my last market intelligence report. That means a lot, but what would mean even more is if you told me what I can do better and how Icon Foods and I can be a resource for you.

Thank you for your continued support.


  1. “About Stevia.” Xi’an GreenHerb Biotech Co., Ltd., www.greenherb.cn/about-stevia/. Accessed 30 June 2023.
  2. Cervera, Marc. “Scarce EU Sugar Supplies Push up Prices as Farmers Stop Planting and Import Costs Climb.” Food Ingredients First, 1 May 2023, www.foodingredientsfirst.com/news/scarce-eu-sugar-supplies-push-up-prices-as-farmers-stop-planting-and-import-costs-climb.html.
  3. Cheng, Evelyn, and Clement Tan. “China’s Exports Plunge by 7.5% in May, Far More than Expected.” CNBC, 9 June 2023, www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7point5percent-in-may-far-more-than-expected.html#:~:text=BEIJING%20%E2%80%94%20China’s%20exports%20fell%20in,predicted%20by%20a%20Reuters%20poll.
  4. “Choosing between US and China Would Result in ‘Less Prosperity,’ ‘More Poverty’: Eu Central Bank President.” Az, 17 Apr. 2023, www.azernews.az/region/208792.html.
  5. “Corn Prices – 59 Year Historical Chart.” MacroTrends, www.macrotrends.net/2532/corn-prices-historical-chart-data#:~:text=The%20price%20shown%20is%20in,2023%20is%20%246.2300%20per%20bushel. Accessed 28 June 2023.
  6. Hazen, Cindy. “Erythritol: Is It Really That Bad?” Food Beverage Insider, 14 Mar. 2023, www.foodbeverageinsider.com/sweeteners/erythritol-it-really-bad
  7. Lawder, David. “US Review of China Tariffs Won’t Depend on Trade ‘breakthrough,’ Official Says.” Reuters, 30 May 2023, www.reuters.com/markets/us/us-review-china-tariffs-wont-depend-trade-breakthrough-deputy-ustr-2023-05-28/.
  8. “World Container Index – 22 Jun.” Drewry, www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry. Accessed 28 June 2023.
Up Next: Icon Foods Introduces a Reb M Ingredient called SteviaSweet RM95 with Nutritional Outlook