Tate & Lyle, the London-based food ingredient giant, has agreed to sell its minority stakes in Middle Eastern sugar units to Savola Group, its Saudi-based partner and the Middle East's biggest sugar refinery.

According to information reported in FlexNews, Tate & Lyle currently owns (soon to not own) "a [9.68] percent stake in a 1.2 million tonnes per year sugar refinery in Saudi Arabia and a [3.58] percent stake in a 750,000 tonnes per year sugar refinery in Egypt."

At present, Savola Group holds "a 64.8% stake in the Saudi sugar refinery and a 53.5% stake in the Egyptian refinery."

On the authority of a Middle-Eastern executive who chooses to remain anonymous,

"Tate & Lyle wants to sell because they are dis-engaging from sugar refining and focusing on sweeteners, ethanol and starches.

"We are interested because it suits our strategy of buying minority interests from willing partners in firms where we are the majority owners.

"We are in talks with Tate & Lyle and we hope to close a deal by mid-January."

The price of this sugar sale has not yet been reported, but financial services firm, Shuaa Capital (a Dubai-based company on the Kuwait Stock Exchange and prominent player in the Gulf Cooperation Council [GCC]) claims it could be worth 240 million riyals, which equates to roughly $64 million.

It's also reported that Savola Group has collaborated with Turkish and Saudi partners to bid on several sugar mills for sale by the Turkish government.

Comments from Tate & Lyle representatives weren't included in these linked articles.

This deal will end a 14 year business relationship between Savola Group and Tate & Lyle, but seems to be aligned with the future plans and goals for each of these distinguished companies.

Of course, Tate & Lyle will continue to focus its efforts on starches, sweeteners, and ethanol: quality food ingredients that we love.

At least one major company is responding to the Salt Initiative, officially launched in the U.S. earlier this year and previously discussed here at Cooperative Purchasers.

This week, ConAgra Foods, Inc., announced plans to reduce the salt content in its food portfolio by 20 percent by the year 2015.

This enormous undertaking attenuates ConAgra's previous efforts at salt reduction in 2006, whereby 2 million pounds of salt was eliminated from many of their well-known brands.

Included, and near and dear to many of our hearts (and stomaches), were Orville Redenbacher's popcorn®, Chef Boyardee® pasta, and the infamous, Healthy Choice®.

Healthy Choice® brand typifies ConAgra's historic commitment to reduce salt content in their processed foods. According to ConAgra, Healthy Choice® is "the only line of meals in the grocery store to earn the 'healthy' label, in part, for meeting the U.S. governments's recommendations for healthy sodium levels," to date.

With the new commitment, ConAgra is taking salt reduction even further. The plan reduces sodium by an additional 8 million pounds.

Do the simple math and we're looking at a goal of 10 million pounds of salt to be eliminated from ConAgra's food products (20 brands and 160 product varieties) in the U.S. market each year.

Al Bolles, Ph.D., executive vice president, Research, Quality & Innovation, ConAgra Foods, comments,

"ConAgra Foods has the ability to make an impact on sodium in a very broad way.

"What that means is that we'll need to use different techniques to keep or enhance the taste of all types of food in our portfolio, from Hunt's® tomatoes to Marie Callender's® convenient meals to Fleischmann's® table spreads.

"This is a definite challenge - but one that is very worthwhile and one we are confident that we can meet."

What are some possible outcomes of salt reduction?

For one, these "different techniques" will likely call on substitute food ingredients and food chemicals to impart the properties and textures that salt provided. A resultant shift may be observed in wholesale food ingredient sales.

Furthermore, if many other large food manufacturers follow ConAgra's direction, the economics surrounding wholesale salt sales will adjust.

Finally, this could effect consumer salt sales at the grocery store. If food tastes different, consumers may be inclined to add salt from the shaker.

Regardless, ConAgra's commitment to reducing salt intake remains unwavering.

Bolles continues,

"We expect to continue to make food better, whether it's through the inclusion of whole grains and other important nutrients, or reducing sodium, far beyond 2015.

"We recognize the critical nature of our role in good health, and we'll continue to make positive contributions.

"Providing good nutrition is essential to consumer and company well-being and is part of our overall commitment to social responsibility."

It is commonly said that, "Mother knows best." And, for good reason.

Later this month, October 20th to be exact, full study data will be released about "Stevia (Reb A) awareness" in current society.

The study highlights the opinions of "mothers in the US," about Stevia (Reb A) products.

Recall that Reb A sweetener was granted GRAS status by the FDA back in December 2008.

At present, two major Reb A products (and their respective major marketing campaigns) are on the market:

• PureVia (manufactured and marketed by PureCircle and PepsiCo)
• Truvia (manufactured and marketed by Cargill and Coca Cola)

The said study was commissioned by PureCircle and the research conducted by LaunchForce, a consulting firm based in Ohio. According to the story in FoodBusinessNews.net, the survey was conducted online: 1,475 surveys were completed; the representative sample was 1,200 mothers.

Apparently, moms are liking what they hear about Reb A, and products that contain the sweet extract of the stevia plant.

Sounds a bit silly at first, but when you really think about it, this is very powerful economic information.

Why?

Because US moms typically do the food shopping. Since they essentially control what families are eating, moms have a major impact on the food industry. If you want to sell your food products, you need to impress the moms of the US with marketing strategies and quality food ingredients.

Obviously, that's BIG business.

According to Jason Hecker, director of marketing for PureCircle in the US,

"The appeal of stevia among mothers is high...

"Nearly 50% of mothers were aware of stevia and have a positive impression of it.

"Overall the ingredient is starting from a very strong place, with room to continue to positively shape the impression of the ingredient in moms' eyes..."

Information about how Reb A (stevia) sales is affecting other sweetener sales and wholesale sugar sales was not included in the article, but you don't need to be a mother (i.e. genius) to see that this trend will make an impact.

If major food and beverage manufacturers have already launched new products (and reformulated old ones) to contain Reb A, a shift in sales volumes for traditional sweeteners and sugar is likely to occur.

So again, we find ourselves listening to our moms.

This Wednesday, the WSJ reported on the latest developments between Cadbury and two American companies interested in the purchase of Cadbury: Hershey Co., America's largest confectioner, and Kraft Foods, one of America's largest food manufacturers.

Both companies are enormous consumers of wholesale food ingredients.

Earlier this month, Cadbury rejected Kraft Foods' initial offer (worth ~$17 billion) claiming the cash percentage of the offer was too low. In addition, the business model of Kraft Foods is not in alignment with Cadbury's.

Cadbury prides themselves on being a 'purist confectioner,' while Kraft Foods is a 'conglomerate business model.'

Hershey Co, the largest confectioner in the US, already holds the license to manufacture and market Cadbury products in the US. On the surface, it seems like a Hershey takeover of Cadbury is the ideal acquisition: from one confectioner to another.

According to the WSJ, however, Hershey's will not likely make a competing offer against Kraft foods.

To paraphrase,

"Hershey's executives concede that annual revenues are too small to support the debt load needed to make a competing offer to Kraft's $16.3 billion bid.

"It could only raise about $4 billion from the debt markets without lowering its own investment rating, leaving a huge shortfall to make up."

It's a strange perspective to see Hershey Co. as too small a company... It may sound naive, but seriously, they make those wonderful 'Kisses' and... they have an amusement park!

Be that as it may, Cadbury has already shown that it wants bids to be dominated by cash, and Hershey's just doesn't have enough right now to be competitive.

Kraft, on the other hand, certainly has enough.

Despite claims by Cadbury that they are not too keen on the deal, the UK Takeover Panel is giving Kraft a deadline of November 9th for a formal offer.

How will this affect wholesale food ingredient sales and wholesale sugar sales?

It seems likely that Kraft will be purchasing more wholesale sugar and cocoa in the future.

Cooperative Purchasers, the premier wholesale food ingredients distributor, is pleased to introduce several new pages on our website.

Check out these information rich pages on many of our staple quality food ingredients including:

• Dextrose Monohydrate
• Brown Sugar
• Powdered (Confectioner's) Sugar
• Starch
• Salt

In addition, there is great information about some of the newer products we now carry, including:

• White Hulled Sesame
• Peanut Butter
• Coconut Macaroon

And... stay tuned for more new pages in the future.