Javed Ahmed, Tate & Lyle's c.e.o., points to growth in fiber and clean label ingredients.

LONDON — Tate & Lyle, P.L.C. has decreased its reliance on, but not given up on, sucralose, which saw adjusted operating profit plunge 73% in the year ended March 31. Splenda sucralose, a high-intensity sweetener, made up 6% of the company’s adjusted operating profit in fiscal year 2015 after making up more than 20% in fiscal year 2010, said Javed Ahmed, chief executive of London-based Tate & Lyle.

“It was clear to us five years ago that we were heavily reliant on sucralose, and that the strategy we set out in 2010 was expected to gradually reduce this reliance, over time,” Mr. Ahmed said in a May 28 earnings call. “The initiatives we have taken since then in building innovation capabilities, strengthening technical expertise, improving customer management, revamping operating systems, and creating infrastructure in Asia Pacific and Latin America among others, have created a more broad-based and higher quality business with solid structural long-term growth prospects.”

He said Tate & Lyle has strengthened its fiber platform by becoming a leading global provider of oat beta-glucan. For geographic expansion, Asia Pacific and Latin America now make up 23% of Tate & Lyle’s specialty food ingredients sales, which compared with 11% five years ago. For innovation, recent specialty ingredient launches include the Claria line of functional “clean label” starches and Dolcia Prima allulose, a rare sugar that has 90% fewer calories than sucrose.

Tate & Lyle pointed to data from Innova Market Insights, Duiven, The Netherlands, to show how the company’s ingredients fit into consumer trends. Product launches of products claiming “low calorie,” “low sugar,” “no added sugar” and “sugar-free” had a compound annual growth rate (CAGR) of 19% from 2011-14, according to Innova Market Insights. During the same time period product launches that contained soluble fiber had a CAGR of 33%,  and “clean label” product launches, or those claiming no additives/preservatives, natural, organic, and/or without genetically modified organisms, had a CAGR of 18%.

Sucralose did drag down the company’s specialty ingredients business in fiscal year 2015. Adjusted operating profit for Splenda sucralose was £16 million ($24.5 million), down from £62 million in the previous fiscal year. Tate & Lyle on April 21 announced plans to consolidate sucralose production in a facility in McIntosh, Ala., and permanently close a sucralose facility in Singapore in the spring of 2016.

“Splenda sucralose remains an integral ingredient in many of our customers' products, and demand remains strong,” Mr. Ahmed said. “It is still early days, but the actions we are taking to refocus and restructure this business are progressing well, and we expect to return this business to modest profitability in 2017.”

Companywide, Tate & Lyle for the fiscal year recorded profit of £30 million ($46 million), down 89% from £273 million in the previous fiscal year, and adjusted sales of £2,694 million ($4,126.6 million), down 14% from £3,147 million. Diluted earnings per share in the fiscal year were 6.5 pence, down 88% from 52.1 pence. Adjusted diluted earnings per share were 37.7 pence, down 32% from 55.7 pence.

Tate & Lyle’s specialty food ingredients segment, which includes sucralose, for the fiscal year had adjusted operating profit of £149 million, down from £213 million in the previous fiscal year, and adjusted sales of £908 million, down from £983 million.

Within the bulk ingredients segment in the fiscal year, adjusted operating profit was £133 million, down from £172 million, and adjusted sales were £1,786 million, down from £2,164 million.

Change is coming in bulk ingredients, too. Tate & Lyle on April 21 announced an agreement with Archer Daniels Midland Co. to re-align their Eaststarch C.V. joint venture corn wet milling business in Europe. Tate & Lyle, which currently owns a 50% equity share in the joint venture, will acquire full ownership of a plant in Slovakia that is more focused on specialty ingredients. Also, Tate & Lyle will exit the predominantly bulk ingredients plants in Bulgaria, Turkey and Hungary, which will transfer to ADM.

“When the Eaststarch realignment is completed, over 90% of bulk ingredients profits will come from North America,” Mr. Ahmed said. “The markets in North America for bulk sweeteners in the industrial starches, our main bulk ingredients products, although mature, are very large, and we have strong market positions with longstanding customer relationships.”