Our Business

Operating environment

Markets

Tate & Lyle participates mainly in four markets: food and beverage; industrial; pharmaceutical and personal care; and animal feed. Of these markets, food and beverage and industrial are the most significant. We principally sell our ingredients, ingredient solutions and services to manufacturers in these two markets. They use our ingredients to manufacture their consumer and industrial products. In the food sector, we also sell end-products directly through retail distribution channels to retail customers in certain markets. Our customer base includes many of the world's major global food, beverage and industrial companies. Our ingredients can be found in the products of nearly all the world's top 100 food and beverage companies.

The key driver of growth for our business is value added food ingredients. In this market we operate primarily within three categories: sweeteners such as SPLENDA® Sucralose and polyols; texturants such as starch and gums; and wellness ingredients such as fibre, protein and probiotics. In 2006, the addressable global market for value added food ingredients in these three categories was estimated to be worth £6.8 billion. The market in these categories is forecast to grow at a compound average annual rate of 4.1% to £8 billion in 2010. We believe that our ability to offer ingredients, ingredient solutions and services that help our customers meet consumers' increasing demands for healthy but great-tasting food represents a significant growth opportunity.

Consumer research

Customer understanding drives all that we do. At the heart of our customer approach is the use of market research to understand the consumer, our markets and our customers' needs. The consumer is our customer's customer. Therefore we work hard to understand consumer drivers and trends so we can help our customers anticipate and respond to new challenges. Our bespoke research, which is carried out in Europe and the Americas, is designed to gain specific insights into dietary habits, lifestyles and health aspirations. We use these insights to direct our internal research and development programme and to help market our ingredients and services.

Solutions

We also offer tailored solutions for our customers. These are unique combinations

of ingredients or services that allow food manufacturers to achieve certain goals.

Our solutions are marketed under four services:

Tate & Lyle CREATE® – innovations in shape, structure, taste and texture;

Tate & Lyle OPTIMIZE® – maximising efficiency and value to help our customers meet their cost and margin targets;

Tate & Lyle REBALANCE® – reformulating to lower-fat, lower-sugar and lower-calorie positions without compromising taste and texture; and

Tate & Lyle ENRICH® – enhancing the nutritional benefits of foods and beverages without compromising their taste.

Our solutions-based approach has changed the way we take our products to market and the way we work with and are perceived by our customers, providing us with new opportunities to sell our products and grow our business.