Tate & Lyle builds up ingredients portfolio with new investment

- Last updated on GMT

Related tags: Sucralose, Tate & lyle

Race for the next high margin ingredient continues as the UK maker
of Splenda sweetener signs off €36 million over the next five years
to invest in "next-generation food and industrial ingredients".

The sucralose supplier said the investment, over the next five years, would be ploughed into a wholly-owned venture fund, Tate & Lyle Ventures.

"It will complement our internal research capability, which has an excellent track record in new product development, and allow us to stay even closer to external developments in our industry,"​ said Mark Robinson, business development director at Tate & Lyle.

Ingredients firms looking to improve returns, in a highly competitive market facing squeezed margins, are setting their sights on 'value-added' ingredients: products that can command a much higher price than the high volume, low value products also in their portfolio.

Tate & Lyle will undeniably be bolstered by the recent, and ongoing, success of its sucralose sugar replacer product Splenda.

This month the number one global soft drinks supplier Coca-Cola announced the launch of a new diet coke in its range, sweetened with Splenda and complete with the ingredient brand logo on the packaging.

The move suggests increasing consumer brand awareness for Splenda, as it perches on the supermarket shelf alongside Coca-Cola's flagship diet coke, sweetened with NutraSweet.

Sales for Splenda, are currently soaring and the battle of lawsuits may not be palpable in terms of sales loss. According to Datamonitor, the Splenda ingredient was used in some 1,436 new products worldwide in 2004, up from 573 in 2003 and 35 in 1999.

But all is not rosy. McNeil Nutritionals, marketer of the table-top Splenda sweetener, is facing a number of court cases in the US that claim its marketing slogan, "made from sugar, so it tastes like sugar," had mislead consumers into thinking the artificial sweetener was "natural."

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