Tate & Lyle roadshow boosts market stature
series of presentations to American investors over the coming days,
news that sees the firm's shares jump.
Expecting bullish comments, yesterday shares in the sugar and sweeteners maker's leapt 16p to 475.75p in London as the firm prepared to go on a US road show.
Tate & Lyle is behind the popular sugar-derived sweetener sucralose, sold under the brand name Splenda.
Set to feel the impact of sugar reform on overall group sales, Splenda has been widely tipped as the key ingredient to arrest the fall in sales at Tate & Lyle.
Indeed fresh demand pushed the firm to extend Splenda facilities at its Alabama, US plant, as well as bringing a new $175 million factory online next year in Singapore.
But analysts say the pressure of generics is creeping up behind the firm.
"It is virtually impossible to patent a food: ultimately generics will destroy the pricing structure," a London food analyst tells FoodNavigator.com.
And Goldman Sachs suggests Splenda will face competition from alternatives with important patent expiry dates, notably on the production process, in 2006 and 2009.
Tate & Lyle filed the original product sucralose patent in 1976, this recently expired, opening up the product to competitors.
Tate & Lyle declined to comment on the 'individual patents', but said to FoodNavigator.com that the firm is "confident in the patents we have".
The UK sweetener company currently has 32 different patents (from commercial blends and products to processing) protecting Splenda; but it is not just the patents that are supporting the market leadership, says Tate & Lyle.
"The product is well established, we have a 3rd generation plant, we're the leaders and we are expanding," says the Tate & Lyle spokesperson.
But despite this market armament, the firm will face competition from China; heralding lower costs for food and beverage makers as sucralose makers compete for market share.
Last month the market believed stiff competition was already in place when it emerged that the world's number one retailer Wal-Mart was selling an alternative to Tate & Lyle's zero calorie sweetener, Splenda, at a 30 per cent discount.
However, the UK company soon discovered that Wal-Mart's product, called Altern, was in fact a direct copy of Splenda which it had supplied to a manufacturing customer who had then sold it to the US retail giant.
