- Global food ingredients provider Tate & Lyle has purchased a 15% stake in Sweet Green Fields, a private U.S. company that makes a range of stevia extracts. No further financial details were provided.
- The London-based Tate & Lyle said the investment enhances its distribution deal from 2017 with Sweet Green Fields establishing it as the exclusive worldwide distributor of the Bellingham, Washington-based company's stevia ingredients portfolio. The agreement also gives Tate & Lyle the option to acquire Sweet Green Fields in the future.
- Sweet Green Fields "industry-leading portfolio of stevia-based ingredients is highly complementary to our portfolio of proprietary sugar reduction solutions, and the results from the first year of our global distribution partnership have been very encouraging," Nick Hampton, CEO of Tate & Lyle, said in a statement.
Food companies are looking to limit added sugars in their products before the U.S. Food and Drug Administration requires them to be added to the Nutrition Facts panel in 2020 or 2021, with the deadline date depending on a firm's annual sales. Some reformulations simply cut back on regular sugar, while others substitute artificial sweeteners or natural ones such as stevia.
The market for stevia continues to grow. Mintel research found new food and beverages products using the product grew more than 13% during the second quarter of last year compared to the same quarter of 2016. And, as of August 2017, 27% of new products using high-intensity sweeteners — such as soft drinks, juices and snacks — featured stevia. It's likely that the shift away from sugar and the growing use of stevia in more products was central in Tate & Lyle's decision to purchase a portion of Sweet Green Fields, with the possibility of an outright purchase in the future.
The natural sweetener has several assets: It's about 200 times sweeter than sugar, contains no calories, is easy to grow and can be grown just about anywhere. It is also a natural product, so it meets requirements for clean labeling and transparency.
Stevia is more expensive than artificial sweeteners and not everyone likes its taste, so companies such as Sweet Green Fields, PureCircle, Pyure and Apura Ingredients have been coming up with branded extracts and other products made from different types of stevia to accommodate varying preferences and uses. Cargill came out with its own branded EverSweet stevia product in 2016. Other sweeteners in the marketplace could compete with stevia, such as allulose, a monosaccharide, or single sugar, which is 70% as sweet as regular sugar.
Meanwhile, Tate & Lyle clearly has confidence in stevia's future since it signed on last year with Sweet Green Fields for the exclusive global distribution deal and is now buying 15% of the company. Since Tate & Lyle's CEO has signaled interest in further M&A activity in the space, it may decide to buy Sweet Green Fields outright if things go well. For Sweet Green Fields, it benefits from having a deep-pocketed investor amid an increasingly competitive stevia and sweetener space.