Tate & Lyle inks 'bran' new gut health deal

By Shane Starling

- Last updated on GMT

UK-based ingredients giant Tate & Lyle has dipped into its independent €30+m venture capital fund to the tune of €3.5m to partner with a Belgian start-up researching the gut health and antioxidant properties of bran fibres.

Its investment has been co-funded by Agri Investment Fund, a division of Boerenbond, the Belgian group, along with academic institutions.

The new partner of Tate & Lyle Venture (the name given to its investment fund), Fugeia, has been analysing the nutritional properties of natural wheat bran fibres for several years, and conducted clinical studies indicating gut health and other benefits.

More were in the pipeline, said Tate & Lyle Ventures managing partner Simon Barnes, along with health claims submissions being prepared for the European Union.

Barnes told NutraIngredients.com

T&L Ventures had selected Fugeia, because while T&L had its own suite of fibre ingredients, Fugeia's patented technologies and applications presented "genuine differentiation" in the prebiotics sector.

"The prebiotic ingredients market is dominated by inulin but Fugeia is working with natural wheat bran fibre which has a different set of functionality," Barnes said.

"Studies indicate it is more persistant in the distal colon which is very exciting as it addresses health concerns such as colon cancer."

"Fugeia will build a whole portfolio around wheat bran."

The first ingredient off the block would be patent-protected arabinoxylan oligosaccharide, although it was unlikely to reach market for "some years" as European Union Novel Foods approval was sought.

The prebiotic market The prebiotic fibre market is dominated in Europe by three players: Belgian companies Beneo-Orafti and Cosucra and Sensus which is based in the Netherlands.

Beneo-Orafti is by far the biggest player and the development of robust science has been an integral part of its business strategy since the prebiotic fibre market began to explode in the 1990s.

Fugeia is pursuing a similar strategy which, given its size, will be significantly boosted by T&L's involvement in what can only be described as a somewhat complex deal also involving academic institutions.

Others involved are the Katholieke Universiteit Leuven (K.U. Leuven), whose own Gemma Frisius Fund has co-invested, along with the University College Sint-Lieven (KaHo Sint-Lieven).

"I am truly excited that Fugeia has been able to complete a highly successful financing round," said founder and CEO of Fugeia, Willem Broekaert.

"The strong financial position and backing by a consortium of experienced investors with excellent insight in the food industry puts the company well on track to become a high impact player in gut health technologies."

Luc Basstanie of Agri Investment Fund said: "Giving agricultural products a higher value in terms of human nutrition is a promising development for the food industry" Market analyst AC Nielsen estimates the European digestive health market is worth about €2.2bn.

T&L Ventures received a share of Fugeia's equity in return for its investment although it would not disclose the detail of the deal.

T&L Ventures began life two years ago with a €30m fund from T&L and has invested in "six high potential innovative companies" in that time.

It is managed independently of T&L.

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