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If you are watching your weight but fancy a McVitie’s digestive biscuit (“loved for their classic crunch, distinctive, salty-sweet wheat flavour and true Britishness”) you have more choices than before. Along with the original and chocolate varieties in UK supermarkets, there is now “the light one”, with 50 per cent more fibre and 30 per cent less sugar.
This dietary miracle was enabled by the food ingredients company Tate & Lyle, which contributed its Sta-Lite polydextrose fibre to give the biscuits a similar taste and crunch, but with fewer calories. If you ask why Tate & Lyle is helping to take sugar out of biscuits rather than putting it in, you have clearly not been concentrating.
Never mind digestive biscuits, Tate & Lyle has itself gone through an extraordinary transformation in the past 15 years, with few of its old ingredients left. The company known in the UK for refined cane sugar and Lyle’s Golden Syrup has turned its back on sucrose for stranger things.
This is confusing, given that its founding business has carried on operating under the name Tate & Lyle Sugars since being sold to American Sugar Refining in 2010. Companies often diversify from their roots: Shell no longer imports seashells, for example. But few go so far as to attack their original products.
Tate & Lyle’s journey from sugar producer to sugar reducer has been a long haul. It moved into sucralose, sold its corn-based sweeteners and starches division in the Americas, and this year paid $1.8bn for CP Kelco, a US producer of pectin and speciality gums. It once refined cane sugar, but now calls itself “a global leader in sweetening, mouthfeel and fortification”.
Whether the reformulation was worth the effort is another matter. Its two-decade hunt for higher-margin growth has had rather underwhelming results. It was one of the founder constituents of the FT-30 index in 1935 but its life as a public company may soon end: the FT disclosed last week Advent International, a US private equity company, is preparing a takeover offer.
Tate & Lyle would not be too big a bite for Advent, given that its market capitalisation before this news was only £2.8bn. It has experienced rushes of investor enthusiasm over the years: one emerged and fizzled two decades ago over the potential of its Splenda brand of sucralose. But it has been expecting a higher valuation for longer than Vladimir and Estragon waited for Godot in Samuel Beckett’s play.
This is partly an identity problem. It is listed in the UK, where the brands it licenses to Tate & Lyle Sugars still have deep resonance. Lyle’s Golden Syrup had the world’s oldest unchanged branding and the sugar company provoked a furore this year when it changed the image of a dead lion on some products to something sweeter. The founding company’s starches and fibres are only famous in industrial circles.
The underlying difficulty is that it makes ingredients for ultra-processed foods. The painful irony (made more so by the fact that Tate & Lyle Sugars’ revenues rose sharply last year due to high demand for cane sugar) is that it found its way out of one health controversy only to land in another.
Unlucky timing, perhaps, but it faces a struggle to convince investors and scientists that its new range of products is better than what it made before. It used to sound noble to help packaged food companies such as Pladis, which produces McVitie’s biscuits, remove fats, salt and sugar and add nutrients and fibre. This manoeuvre now comes under the banner of ultra-processing.
Tate & Lyle insists that it is improving packaged brands: Nick Hampton, chief executive, calls the backlash “a big opportunity for our business”. It says making low-sugar products more palatable and giving them longer shelf lives contributes to good health, albeit they are processed. Pectins can keep fruit compotes in low-fat supermarket yoghurts stable, for example.
The company may have a point. Many studies have found that ultra-processed foods are bad for health, but some suggest that most harm is done by specific ingredients rather than by processing itself. Martin Warren, chief scientist of the Quadram Institute, says it is a “step in the right direction” to make such foods more nutritious, as long as they do not displace fresh stuff.
But Tate & Lyle is in a strange position, years after dropping sugar. Its competitors are much larger ingredient companies such as the Swiss-Dutch DSM-Firmenich and Ireland’s Kerry Group. Advent’s interest is an opportunistic tilt at a cheap UK enterprise but it reflects the reality that Tate & Lyle is best known for the past. Its fibres may be in your biscuit, but you would never know.
