New Splenda product could reinforce brand image

By Lorraine Heller

- Last updated on GMT

Related tags: Sucralose, Marketing, Tate & lyle

A new version of the popular sweetener product Splenda is to hit
the retail market, a move that suggests its marketers are stepping
up efforts to cement the brand in consumer consciousness before the
inevitable arrival of alternative sucralose products.

Splenda Quick Pack Pouches, introduced in the US yesterday, are pre-measured packages of the no-calorie sweetener, equivalent in sweetness to one cup of sugar and designed to be added to a pitcher of unsweetened drink mixes.

According to the US marketer of Splenda McNeil Nutritionals, the new product, which is jointly marketed with the beverage Kool-Aid, is "easily integrated into everyday life"​ and offers families "another opportunity to take small steps towards a healthier diet."

But behind the new product launch certainly lies a desire to push the parent sucralose brand name in the face of a rising threat to its monopoly of the market.

Tate & Lyle, the UK-based manufacturer of Splenda, has until now enjoyed a virtual monopoly of the sucralose market with its patented Splenda product. It filed the original product sucralose patent in 1976. This recently expired, opening the product up to competitors, though the company remains confident in the strength of its process patents.

Patent protection of Tate & Lyle's sucralose product Splenda is absolutely central to the firm's success. Sales of sucralose, a sugar-derivative that is 600 times sweeter, helped the company to record a first-half profit increase of 59 per cent.

Last year the market believed stiff competition was already in place when it emerged that the world's number one retailer Wal-Mart was selling an alternative to Splenda at a 30 per cent discount.

And in January this year, Tate & Lyle's shares plunged after FoodNavigator.com revealed that an Indian company- Pharmed Medicare- claimed to have developed an alternative patent-pending process that would break Tate & Lyle's lucrative monopoly in the sweetener.

The previous month, market analyst Morgan Stanley warned that the stock market was being too optimistic about Tate & Lyle's ability to hold on to its market share for sucralose once its patent expires. Tate & Lyle remains bullish however that it can continue to dominate the value-added ingredients market through innovation, and that its sucralose business remains well-protected.

Indeed, this month the company filed a suit in the US over an alleged infringement of its patented sucralose manufacturing technology.

The group's US subsidiary, Tate & Lyle Sucralose, filed the suit in the US District Federal Court for Central Illinois against a Chinese manufacturing group based in Hebei province as well as six importers of sucralose into the US.

The proceedings allege infringement of patented sucralose manufacturing technology in respect of sucralose manufactured in China.

The company has good cause to try to protect its market share, as the sweeteners market is becoming increasingly attractive. Sectoral growth is pitched at about 8.3 per cent year on year until 2008, far out-pacing food industry growth currently pegged at around three to four per cent.

And with growing numbers of consumers turning towards sugar-free and low-calorie products, food makers are increasingly on the lookout for cheap sugar alternatives.

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