New Tate & Lyle sweetener needs time to gain traction

by Jeff Gelski
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Dolcia Prima, Tate & Lyle's brand name for allulose, has 90% fewer calories than regular sugar.

LONDON — Struggling with Splenda sucralose pricing, Tate & Lyle, P.L.C. introduced Dolcia Prima allulose in February. It may take a while for the new sweetener to positively impact company earnings, though.

“Since the launch, we have seen encouraging early interest and engagement from customers across a range of applications, and this supports our confidence in its longer-term potential,” said Javed Ahmed, chief executive officer, in an April 2 trading statement call. “However, given the relatively long development and adoption cycles for new ingredients, we do not expect it to have any material effect on the group’s performance during the next financial year.”

Dolcia Prima, Tate & Lyle’s brand name for allulose, has 90% fewer calories than regular sugar. It will be targeted at calorie reduction and sugar replacement in most food and beverage categories, Mr. Ahmed said. Allulose is not a high-intensity sweetener, which sets it apart from other Tate & Lyle sweeteners Splenda sucralose, Tasteva stevia extract and Purefruit monk fruit extract.

“It’s actually a rare sugar, which exists in nature, and we look at it as genuinely something very, very novel, which there has been no commercialization of allulose at all,” Mr. Ahmed said. “So we are the first one that (is) bringing it to market. In terms of the naturalness, as you know, there is really no definition of natural in the U.S. market right now. So we leave that to our customers.”

Tate & Lyle’s April 2 trading update covered the fiscal year ended March 31. The company had no changes to the full-year guidance given in its Feb. 6 trading statement. Full fiscal-year results will be given May 28.

The company is considering changes to its sucralose business. Tate & Lyle previously has said price erosion for sucralose should be about 25% in the fiscal year.

“The project to evaluate how to maximize returns from Splenda sucralose is reaching conclusion, and we will finalize it with the board during April,” Mr. Ahmed said April 2. “We expect to communicate the outcome in the next few weeks.”

Purefruit and Soda-Lo (a sodium reduction system) continue to grow in sales, he said.

“Collectively, they’re becoming more material than they were a year ago, and certainly more than they were two years ago, but not at the point now where we’re talking about significant materiality,” Mr. Ahmed said. “What is very encouraging, however is, yes, they are incorporated in a number of brands, in a number of applications, and the sales and the volume keep growing every year, very healthy again, strong double-digit growth this year, again, on the back of good growth last year.”
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