Sucralose partners prepare for new challenges
Nutritionals are to change the way they handle production, sales
and marketing of sucralose, the sweetener developed jointly by the
two companies, following the recent opening up of the European
market.
Under the terms of the new agreement, McNeil Nutritionals will retain ownership of the Splenda brand and be responsible for extending its presence in the global retail and food service sectors. Tate & Lyle, meanwhile, will become the sole manufacturer of sucralose, as well as taking responsibility for developing Splenda as an ingredient in other food and beverage products.
With Tate & Lyle becoming the sole supplier of sucralose to McNeil Nutritionals, the US group will now transfer ownership of its sucralose manufacturing plant in Alabama to its long-term partner, along with other ingredient-related assets.
The new structure "plays to the strengths of each company" according to Brian Perkins, chairman of the nutritional products division of Johnson & Johnson, McNeil Nutritionals' parent company.
Perkins said that the impressive growth of Splenda tabletop products in the retail market and the recent European Union approval of sucralose meant that a change of strategy was needed to better serve the growing number of sucralose customers around the world.
"Most importantly," he said, "the new realignment will build the Splenda brand by maximising global opportunities in retail and foodservice. McNeil Nutritionals will focus resources on marketing to consumers and healthcare professionals, while Tate & Lyle will provide supply-side capabilities to the food and beverage industry."
Iain Ferguson, chief executive of Tate & Lyle, explained that the opportunities in the value-added sector were too great to miss - not least with the increasing trend towards healthier eating.
"Growing the contribution from value-added and branded products is a key part of our strategy, and acquiring the sucralose ingredients business is another significant step towards achieving this goal. Sucralose is ideally placed to meet consumer demands for reduced calorie options in many categories, including soft drinks, dairy and confectionery," he said.
The move comes less than a month after the EU authorities gave the green light to sucralose products throughout the 25-country trading bloc - although several Member States had already approved the use of the zero-calorie, ultra-sweet product.
In total, sucralose has approval for use in foods and beverages in more than 40 countries including Canada, Australia and Mexico.
The two companies clearly believe that restructuring their joint venture will give them a competitive advantage in a market set for explosive growth. Recent data from the Calorie Control Council shows that the market for low-cal table top sweeteners and ingredients is becoming increasingly important - more than 163 million adult Americans consume low-calorie, sugar-free foods and beverages.
