- DouxMatok, an Israel-based food technology startup, has raised $22 million to start large-scale production of its sugar reduction solution as it commercializes the product in Europe and North America.
- The company's first product can reduce up to 40% of the sugar content in various foods and baked goods while retaining the same taste profile, according to a statement. DouxMatok is planning to expand its technology to include more products and flavors such as salt.
- The funding round was led by BlueRed Partners from Singapore. Other strategic investors include Südzucker AG, the largest European sugar company; Royal DSM, a global leader in science-based nutrition; and Singha Ventures, a corporate venture fund of one of Thailand's biggest food and beverage conglomerates.
As consumers become increasingly concerned about excess sugar in their diets, companies have been searching for a solution that won't negatively affect product taste. With the funding DouxMatok received, the company will likely be able to quickly scale-up production. And if it can deliver on its claims of reducing 40% sugar content in food product without altering taste, mouthfeel or texture, then it could attract the interest of a lot of CPG brands around the world.
About 71% of consumers read the sugar content on labels and 46% want to reduce their sugar consumption, according to surveys. In recent years, food and beverage companies have invested in developing artificial sweeteners. Stevia has been one of the prominent substitutes, but the non-caloric sweetener and other similar products have left consumers with a bitter taste. DouxMatok claims its products don't have the same off-putting aftermath.
Despite consumer desire to reduce sugar for health reasons, taste is still the key. This could provide a major advantage for DouxMatok. Analysts have said that taste and the sweetness that sugar provides is one of the most important factor when it comes to purchasing decisions. Americans typically consume more than 13% of their total daily calories from added sugars, according to the FDA.
But DouxMatok isn't alone in launching sugar-reduction innovations. Ingredion introduced a line of low-sugar glucose syrups two years ago to help food manufacturers reduce the amount of added sugar shown on Nutrition Facts panels, which the FDA is requiring to be listed on product packaging as part of the updated label starting in 2020 and 2021. Additionally, Kerry developed TasteSense, a natural flavoring solution designed to bring back sweetness that's lost when sugar is reduced. These products mean there will be plenty of competition for DouxMatok on the market.
However, with most CPG companies interested in sugar reduction, and many of them making it a priority, there could be an opportunity in the market place for multiple options.
Danone recently introduced a Greek low fat yogurt with two grams of sugar called Two Good, and Kind has been working to reduce the sugar content in its products for years. Additionally, Nestlé researchers have engineered hollow and fast-dissolving sugar molecules to allow manufacturers to use up to 40% less without reducing the sweetness of their products — which sounds very similar to DouxMatok's technology. Last year, the Swiss food giant released its first chocolate bar made with its new sugar reduction technology in the U.K. and Ireland.
The latest funding round wasn't the first for DouxMatok. In 2017, the company received $8.1 million to increase production of its sugar-reduction technology. More of the latest funding round will go toward its R&D work on salt reduction. Although there is competition with other salt-reducing technologies, if the company establishes its reputation with sugar, salt and other innovations could quickly gain momentum.