Splenda Lovers Face Tight Supply
Dieters hoping for a slew of new products with the sugar substitute Splenda (search) may be disappointed next year.
That's because the maker of sucralose (search), the key ingredient behind the increasingly ubiquitous no-calorie sweetener, is having trouble keeping up with demand.
Tate & Lyle PLC (search), the world's only manufacturer of sucralose, said interest has so outpaced expectations the company won't take on new U.S. customers until it has doubled production at it's plant in McIntosh, Ala., sometime in early 2006.
The company also plans to open a second plant in Singapore, according to a written statement.
Buoyed by a surge in anti-sugar diets such as Atkins and South Beach, Splenda has enjoyed sweet success since its introduction in 2000, appearing in everything from soda and ice cream to candy and jams.
Splenda, which won fans with its sugar-like sweetness and stability in baking, now dominates the $337 million U.S. retail market for sugar substitutes, beating out aspartame sweetener Equal, made by Chicago-based Merisant Corp.
"Sucralose has one of those problems that's both good and bad to have," said John Sicher, editor of Beverage Digest. "The demand is tremendous. The supply is constrained."
Splenda is sold to consumers as a table and baking sugar substitute by McNeil Nutritionals LLC (search), a Pennsylvania-based unit of Johnson & Johnson (JNJ). Consumer sales won't be affected by the tight supply, a company spokeswoman said.
Sales of sucralose to manufacturers as an ingredient for use in other products are handled directly by Tate & Lyle, which is headquartered in London.
How many new sucralose-sweetened products will come to market is difficult to tell, says Sicher. It depends largely on how many products already have been developed and how much sucralose companies bought in advance.
He says it's too soon to tell how the tight supply might affect existing sucralose-based products at large companies, such as Coca-Cola Co.'s low-calorie "C2" cola, but Tate & Lyle said the Alabama plant will meet the needs of existing customers.
A Coke spokeswoman wouldn't comment.
Small companies hoping to expand or introduce low-cal products likely will face the most trouble.
Atkins Nutritionals helped spur Splenda's surge by endorsing its use in the company's hugely popular low-carb diet. Matthew Wiant, chief marketing officer for Atkins, estimates sucralose is used in as many as 10,000 products. But he doesn't think companies will have a problem switching to other sweeteners if they can't get it.
Lyn Nabors of the Calorie Control Council (search), a nonprofit trade group, said more companies probably will switch to sugar and sweetener blends, which have fewer calories but require less of the substitute.
Companies who insist on pure sucralose may have to delay new products, she said.
Dan Conner, a co-owner of Conner Bottle Works, a small Newfields, N.H., company that makes old-fashioned glass-bottled sodas, started feeling the Splenda squeeze two months ago. That's when he got a letter from Tate & Lyle telling him he could buy only small amounts of sucralose each month.
He said that for many years his company resisted making diet sodas because the available sugar substitutes didn't taste right. But sucralose was different, and this year Conner added two diet sodas.
But with supplies tightening, Conner now hopes another company will introduce a sucralose competitor, since the cost of sucralose has jumped significantly.
"Maybe we'll get some price wars going to help people like myself," he said.
Merisant, which acquired the Equal business from Monsanto Co. in 2000, recently sued McNeil Nutritionals, accusing it of false advertising by claiming Splenda is made from sugar.
McNeil Nutritionals claims the lawsuit is without merit, saying sucralose starts as cane sugar.