Splenda shortage

Demand for the artificial sweetener has outpaced
production abilities. Small food makers imperiled.
December 3, 2004: 5:04 PM EST

LOS ANGELES (Reuters) - Small U.S. makers of foods
and drinks sweetened with Splenda are making
contingency plans as big food companies get the
lion's share of the popular sugar substitute,
which is in short supply.

Small companies are stockpiling the zero-calorie
diet food ingredient and considering other ways to
sweeten their products after warnings from Splenda
maker Tate & Lyle PLC that future supplies will be
based on past demand.

Splenda's popularity has soared as dieters
following low-carbohydrate regimens like the
Atkins and South Beach diets embraced it because
of its ability to withstand the high heat of
cooking without breaking down or losing flavor.


Unlike other sweeteners, Splenda, whose chemical
name is sucralose, is also said to have no
aftertaste.

As consumers have clamored for it, big companies
likePepsiCo Inc. (Research), General Mills Inc.
(Research), and Unilever PLC have begun using
Splenda in everything from Pepsi Edge, a low sugar
soft drink, to reduced-sugar Trix cereal to Ben &
Jerry's Carb Karma ice cream.

Britain's Tate & Lyle has said demand for Splenda
has far exceeded expectations, and the company is
no longer taking on new customers in the United
States until new production facilities come online
in 2006 and 2007.

The Splenda brand is owned by Johnson & Johnson
(Research) unit McNeil Nutritionals Worldwide, but
Tate & Lyle is the sole manufacturer of sucralose.

Pepsi, General Mills, and Unilever all said they
do not expect to be hurt by tight Splenda
supplies, but smaller manufacturers were more
concerned.

Betty Jo Steel, president of sugar-free sauces and
salad dressings maker Steel's Gourmet Foods in
Bridgeport, Penn., said she expects the needs of
such formidable companies to come before her own.

"If people are buying on contract, and most of
them are, then they are going to be handled first
as opposed to people who are just ordering on a
regular basis like us," Steel said.

Steel added that she would consider using a
combination of sweeteners if her allocation of
sucralose is not enough to meet demand.

Another manufacturer said he was not as concerned
about a supply disruption as he was about a
potential price increase on the sweetener because
of tight supplies.

"It could drive the cost up, which would drive up
the cost of our products and impact consumers and
our business" said Stephen Jones, vice president
and general manager of Maple Grove Farms of
Vermont, which sells sugar-free maple syrup and
salad dressings.

Maple Grove is more fortunate than some other
small companies because it is a unit ofB&G Foods
Inc. (Research), Jones said, and Splenda
allocations can be shifted back and forth
depending on which products are in higher demand.

B&G's other products include Emeril's Original
seasonings and Polaner fruit spreads.

Other small businesses, however, were concerned
that limitations on the amount of Splenda they buy
could impact their ability to introduce new
products and increase sales.

Baja Bob's, a San Diego, California-based maker of
sugar-free drink mixes, recently launched a new
line of martini mixes. Its co-founder, Craig Cook,
hopes the company will have the funds to stockpile
sucralose during times of the year when demand for
drink mixes decreases, such as the winter.

"This way if we have a sudden growth spurt we are
going to have it available to us," Cook said. Top
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Roy Crockett
www.ricrockett.com
roy@...
Northern Virginia
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