Tate & Lyle buys CP Kelco in response to shifting consumer demand

As concerns about both the health impacts of sugar and long ingredients lists mount, key players such as Tate & Lyle are keen to move towards ingredients perceived as ‘healthier’. The supplier, once famous for sugar, spun-off its sugar business in 2010, and continues to invest in sugar reduction technologies.

Tate & Lyle has recently acquired CP Kelco, a US-based company that manufactures ‘nature-based’ speciality ingredients, for $1.8bn (approx. €1.6bn). The company sells ingredients such as pectin, a fibre found in fruit and vegetables, and citrus fibre, which is sourced from citrus peels and is, the company claims, ‘clean label’.

A reaction to health and ingredients concerns?​Consumers are increasingly concerned about the prevalence of long ingredients lists in food. So-called clean label products are, thus, highly sought after.

“We are finding that consumers are paying much more attention to ingredients on product labels. Increasingly, they want ingredients which they perceive to be ‘clean,’ ‘natural’ and recognisable and they also want simpler labels with a lesser number of ingredients,” a CP Kelco spokesperson told FoodNavigator. CP Kelco’s ingredients, the company claims, are ‘nature-based’.

Health is also a key factor for consumers, and has driven many trends over the past few years. This has driven trends such as the continuing demand for sugar reduction​.

According to research by Pitchbook and Tate & Lyle itself, the market for speciality food ingredients has grown three-fold between 2015 and 2022, driven by demand for clean label and healthy ingredients.

Clean-label meat alternatives Plant-based meat alternatives often have long ingredients lists containing products consumers have never heard of. Some plant-based alternatives are bucking the trend, however. For example, Spanish start-up Heura​ is producing clean-label alternatives for meat such as chicken and ham. Vegbloc​, on the other hand, is producing a clean-label substitute that doesn’t try to mimic any specific meat, but simply takes its place in a meal. CP Kelco provides ingredients, including pectin and citrus fibre, for meat alternatives. 

According to Tate & Lyle, the global speciality ingredients market was valued at $75bn (approx. €69bn) in 2022, and the European market is 22% ahead of the global one. It is expected to grow by 6% on a compound annual basis.

Tate & Lyle aims to develop a healthier portfolio with the acquisition, aiming to present a healthier image to consumers.

“Pectin is a key ingredient in many clean label solutions, while CP Kelco’s highly functional speciality gums are frequently used by customers to tackle gelling, thickening and stabilization challenges. Citrus fibre, one of its newer clean label ingredients, is used to add nutrition to an increasing number of consumer products,” Tate & Lyle’s CEO Nick Hampton told FoodNavigator.

How will the acquisition change the business?​With the businesses combined, Tate & Lyle’s Hampton told FoodNavigator CP Kelco’s ingredients will be able to be used in a range of new applications.

“As a combined business, we will be able to provide a sweetener solution, with pectin/gum providing mouthfeel to replace the mouthfeel of sugar, coating the tongue. Take a Chipotle dipping sauce – before we could thicken with starch. Once we have combined, we will, with xanthan gum, be able to stabilise the sauce, as well as thicken with starch,” he told us.  

The two companies have worked together extensively on previous occasions. The acquisition will bring this partnership closer still.