Ingredion-Tate & Lyle deal: the future of ingredients solutions

• The Ingredion–Tate & Lyle deal would create a major global ingredients supplier with broad solution capabilities
• Over 75% of manufacturers prefer one-stop suppliers for efficiency and consistent reformulation outcomes
• Sugar reduction is critical, with 98% of companies reformulating and needing multi-ingredient solutions
• The combined company would strengthen its position in stevia, sucralose and emerging allulose
• Industry consolidation is accelerating, putting pressure on mid-sized suppliers and reducing flexibility for manufacturers

As pressure from consumers pushes for clean label products and GLP-1s turn many towards healthier, more intentional eating, food and beverage manufacturers are increasingly looking for integrated solutions for reformulation and innovation.

That means ingredients suppliers will be vying to become the one-stop shop that they turn to.

After agreeing a £2.7bn deal, the takeover of the UK’s Tate & Lyle by US ingredients giant Ingredion will go ahead if it passes scrutiny and the combination will be in a strong position to be a top one-stop shop.

“A majority of manufacturers favour one-stop providers that offer both ingredients and complete solutions,” says Elizabeth Thundow, vice president of food and nutrition at B2B market insights and advisory firm, Kline and Company. “Over 75% prefer a single supplier for efficiency and consistency.”

Add to this that 98% of F&B companies report a trend towards adopting blended solutions and 86% of F&B manufacturers seek closer collaboration with solutions providers and a clear picture is emerging.

The sugar problem

Sugar reduction is a key focus – 86% of F&B companies perceive sugar reduction as a necessity, according to Kline and Company’s manufacturer’s survey. And an extraordinary 98% are reformulating products to reduce sugar content.

This would be a key strength for the Ingredion/Tate & Lyle combination. It will be able to address the problem of how sugar is replaced when it performs so many roles within a food or drink.

“No single sweetener can replicate sugar’s full functionality,” explains Thundow. “Sugar’s multifunctional role (bulk, texture, stability) makes replacement technically challenging, often requiring multi-ingredient systems and process adjustments.

“The combination [of Ingredion/Tate & Lyle] would create one of the most comprehensive sugar reduction portfolios globally, spanning stevia, sucralose, allulose, fibres, texturisers and stabilisers. This aligns with a structural shift in the market from single ingredients to multi-ingredients systems to integrated solutions partnerships.”

Strength in stevia

Stevia continues to anchor the natural sweetener segment, benefiting from strong clean-label demand, according to Thundow.

Ingredion’s stevia power was already bolstered by buying a majority stake in PureCircle in 2020.

And now it’s here that the combination would hit its sweet spot. Kline analysis shows that the combined entity could account for 34% of global stevia sales in a market that is forecast to reach £1.3 billion by 2030.

Meanwhile, says Thundow, sucralose remains a widely used synthetic option – Tate & Lyle revenue from sucralose alone was £260m in 2025. “Allulose is emerging as a high-growth, premium ingredient,” she adds.

The consolidation trend

Consolidation is part of a growing trend in the ingredients industry.

“We have seen consolidation in ingredients over the past several years,” says Seth Goldstein, senior equity analyst at investment research company Morningstar. “Other notable transactions are IFF buying DuPont’s nutrition and biosciences business, the DSM-Firmenich merger and the Novozymes-Christian Hansen merger that created Novonesis.

“Ingredient companies are constantly looking to add new products and categories to their portfolios to keep up with changing consumer preferences and accelerate volume growth. In many cases, a larger player will acquire smaller players as a way to add new product capabilities.”

Powerful combinations

What does that mean for suppliers to the F&B industry? “IFF’s sale of its food ingredients business points in the same direction: companies making deliberate choices about where they compete, then building scale in those spaces,” says Filiberto Amati, advisor at FMCG consultancy Amati and Associates. “Mid-sized generalist suppliers are caught between large, integrated platforms and highly specialised niche players. That middle position is becoming hard to maintain.”

“In a market where value is rapidly moving toward integrated sweetening systems, players focused on single ingredients risk being relegated to commoditised positions with margin pressure,” agrees Thundow. “Smaller or niche specialists may be forced to either differentiate in specific segments, such as rare sugars like allulose, or integrate into larger ecosystems.

“Ultimately, this evolution points toward a future market structure dominated by fewer, larger ‘platform players’, where F&B manufacturers increasingly collaborate with multi-capability suppliers that can deliver end‑to‑end sugar-reduction solutions, rather than sourcing individual ingredients from a fragmented supplier base.”

Potential downsides for F&B

In the case of an Ingredion/Tate & Lyle combination, “a combined entity with about 15% global share of the global alternative sweeteners would become a top-tier supplier with stronger influence in key ingredients categories and solution systems”, says Thundow. “This scale enables greater negotiating leverage and higher switching costs, particularly as integrated systems become standard”.

One-stop shops may also limit flexibility. “As integrated systems become more complex, switching suppliers becomes more difficult and resource intensive,” says Thundow. And innovation lock-in may also rear its head. “Proprietary systems may create dependency on specific formulations or platforms,” she says.

Not all F&B companies will use one-stop shops. “Some still adopt multi-supplier strategies when greater customisation or access to specialised ingredients is required,” says Thundow.

However, the future is looking like more M&A and this will have consequences for both brands and their suppliers.