The seismic effects of sucralose

by Jeff Gelski
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The recent supply shortage for the alternative sweetener sucralose has food and beverage manufacturers seeking alternatives. In response, at least one sucralose replacement has entered the market.

To take advantage of the current supply situation, other sweetener suppliers are marketing how their products, when combined in applications with the high-intensity sweetener sucralose, may help companies reduce the amount of sucralose needed in applications.

London-based Tate & Lyle P.L.C. has stopped taking new customer requests for its sucralose until a $75 million plant expansion in McIntosh, Ala., is completed. The expansion, which will double the output of sucralose there, will be completed in two phases, one in January 2006 and one in April 2006, said Ferne Hudson, head of media and public relations for Tate & Lyle.

The company also is building a $175 million sucralose manufacturing plant in Singapore that should be completed in January 2007, Ms. Hudson said. The expansions in total will more than triple the capacity Tate & Lyle had for manufacturing sucralose in April 2004.

For now, sucralose alternatives are available.

Sweetener Solutions, L.L.C., Savannah, Ga., has received a number of calls requesting its SucraSweet HIS 600, said Mike Coffield, vice-president of technical sales and operations. The patent-pending blend of two high-intensity sweeteners (acesulfame potassium and neotame) and a polyol (maltitol) may serve as a one-to-one replacement of sucralose. Like sucralose, it is 600 times sweeter than sugar.

Gaio tagatose, a high-intensity sweetener manufactured by SweetGredients KG in Germany, may complement sucralose. When less than 1% Gaio tagatose is blended with sucralose, it reduces the required dosage of sucralose by 25% to 35%.

Combining Sunett (acesulfame potassium), which is about 200 times sweeter than sugar, with sucralose provided a more sugar-like taste than sucralose alone, according to studies from Nutrinova, which manufactures Sunett. Blends where both sweeteners contributed 50% of sweetness provided the best overall taste, according to the studies. Combining the two sweeteners might lead to cost savings because of sucralose’s short supplies.

Tate & Lyle continues to promote sucralose in its Rebalance lines. The Rebalance 100 and Rebalance 150 solution sets for European beverages contain sucralose as does Ice Cream Rebalance 500 for the U.S. market.

Panmure Gordon & Co., a corporate and institutional stock broker based in London, sees sucralose profits more than doubling to $197 million by 2009.

"We assume 150% growth in sales between 2005 and 2009 to $533 million, and we assumed margins reduce steadily to 29% by 2017," Panmure Gordon said in a June 14 research report on Tate & Lyle. "We feel this reflects an optimistic scenario given the potential for competition to reduce margins to more normal levels.

"This could either come from increased acceptance of competing products, such as neotame, or through alternative sucralose supply."

Nine sucralose patents owned by Tate & Lyle will expire by 2007 followed by 19 in 2010 and 28 by 2014, according to Panmure Gordon.

Tate & Lyle has 35 patents issued and six patents pending for sucralose, Ms. Hudson said.

"These comprise of manufacturing patents, blending and application patents, and product form patents," Ms. Hudson said. "The manufacturing area is where we have focused a lot of our attention over the last 15 years, and we have invested heavily to protect our technology and to ensure we will always be the lowest cost sucralose manufacturer.

"We have patented all known economically viable routes for making sucralose."

Charlie Mills, an analyst at Credit Suisse First Boston, spoke about the patent issue in a May article in The Wall Street Journal.

"Successful products that produce on large scale tend to commoditize," he said. "Once patents expire, generics enter the market."

Panmure Gordon added in its report, "Tate & Lyle has the ability, in the short term, to restrict supply and control pricing. As the market matures, the supernormal profits being made on sucralose may not be so ‘super’ and Tate & Lyle should be working hard to maximize profitability at this stage of the non-nutritive sweetener market."

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