Specialty foods sales growth slows at Tate & Lyle
Feb. 9, 2012
by Jeff Gelski
LONDON — Facing sucralose competition, Tate & Lyle, P.L.C. saw steady slows growth within its Specialty Food Ingredients (S.P.I.) unit in the third quarter ended Dec. 31, 2011, but as expected volume growth in the unit was lower than the first half’s rate, the London-based company said in an interim management statement Feb. 9.
Higher volumes and good sales growth in corn-based specialty sweeteners and starches came in the third quarter. Sucralose volumes grew, but they were below strong levels seen in the first half. In the first half ended Sept. 30, 2011, sales within Specialty Food Ingredients were up 9% (12% in constant currency).
“For the full year, we’re looking in Specialty Food Ingredients of margins probably in the mid-single digits, which is in line with the market growth of about a 4% to 5% range” said Javed Ahmed, chief executive of Tate & Lyle, in a Feb. 9 conference call.
Tim Lodge, chief financial officer, added, “Given that we have a number of sweetener products within that specialty portfolio, you tend to get the launches and the big noise around the beginning of the summer, and so that typically affects the first half more.”
The company is facing competition from other suppliers of sucralose, a high-intensity sweetener.
“We see our competitors, the generics, mostly from China, and we’re coming up against them all over the place,” Mr. Ahmed said.
He said Purefruit, a natural high-intensity sweetener offered by Tate & Lyle, is not a competitor of sucralose. Purefruit, which Tate & Lyle began supplying last year, is sourced from monk fruit, also known as luo han guo.
“At least in the medium term, nobody would see this as a replacement for sucralose at all,” Mr. Ahmed said. “This is a completely different proposition. This is all about natural, and (Monkfruit) would compete much more in the natural space as opposed to the sucralose space.”
Mr. Ahmed also gave an update on a new commercial and food innovation center in Chicago, which will be the regional headquarters for the Specialty Food Ingredients business in North America. Tate & Lyle employees based in Decatur, Ill., are moving to the Chicago center.
“We’re going to be moving people in, literally, in the next week to 10 days,” Mr. Ahmed said. “Obviously, it is a big move for us, and that move itself we will talk about in probably two to three weeks.”