Tate & Lyle, a key player in the food and beverage industry, has recently acquired CP Kelco, a US-based company specializing in ‘nature-based’ specialty ingredients, for $1.8bn (approx. €1.6bn). As concerns about sugar and lengthy ingredients lists continue to grow, major companies like Tate & Lyle are shifting towards ingredients perceived as ‘healthier’. The supplier, known for sugar in the past, divested its sugar business in 2010 and is now focusing on investing in sugar reduction technologies.
Consumers are increasingly seeking clean label products with shorter ingredients lists. According to a spokesperson from CP Kelco, consumers are now more mindful of the ingredients listed on product labels, preferring ‘clean’, ‘natural’, and recognizable ingredients. CP Kelco’s ingredients are claimed to be ‘natural’, meeting the demand for healthier options. Health considerations have been a driving force behind many trends in recent years, such as the demand for sugar reduction.
The specialty food ingredients market has seen significant growth, with a three-fold increase between 2015 and 2022, driven by the popularity of clean label and healthy ingredients. Tate & Lyle envisions a healthier portfolio with the acquisition of CP Kelco, aiming to enhance its image with consumers by offering more nutritious options.
With the combined businesses, Tate & Lyle plans to utilize CP Kelco’s ingredients in new applications. According to Tate & Lyle’s CEO, Nick Hampton, the acquisition will enable them to provide innovative solutions, such as using pectin/gum to enhance mouthfeel in products, replacing the need for sugar. The two companies have previously collaborated extensively, and this acquisition will further strengthen their partnership.
Overall, the global specialty ingredients market, valued at $75bn (approx. €69bn) in 2022, is projected to grow by 6% annually. Tate & Lyle’s strategic move to acquire CP Kelco reflects the ongoing shift towards healthier and cleaner label products in the food and beverage industry.
