With the media surrounding the sugar debate and transparency of the food supply chain becoming a must for consumers, the sugar market has once again proved itself to be a changeable one. Ben Eastick, Director of sugar and syrup specialists Ragus, talks to Kennedy’s about his certainty that sugar remains the gold standard sweetener for confectioners and bakers alike and how their company are staying afloat in such an unpredictable market.
Ben begins with the history of Ragus, saying, “in 1881, two brothers were invited by Abram Lyle to set up an analytical laboratory for their refinery. Charles and his brother John looked at the by-product of the refining process, which was a treacle like substance and they formulated the initial recipe for Lyle’s Golden Syrup, which is now the world’s oldest branded product.”
In 1928 Charles went on to start Ragus after seeing the growth in confectioners, bakers and brewers using specialist sugar products. “Fast forward to 1976 and you had one of our main competitors using cane sugar, another using beet sugar and us,” adds Ben, “since then we’ve been the only independent sugar manufacturer in the UK and we’ve grown significantly. We are now doing around 35% of the specialist sugar market in the UK.”
Ragus are able to customise to various demands and create endless types of speciality sugars and syrups. Their range comprises around 20 product streams including raw sugars, muscovado, soft brown sugars as well as golden syrups, refiner’s syrups, treacle, molasses and invert syrups. “Then you’ve got customised blends. Pharmaceutical companies will come to us to ask for sugar and glucose as a bulking agent for cough linctus, so we can also do sugar/glucose blends,” adds Ben. Main markets for Ragus include bakery, which comprises around 75% of their business, brewing is around 6%, confectionery between 6-8% and roughly 10% is other.
The company now has an annual turnover of over £20 million and this figure is growing. While the target is to increase by 5% year on year since their move to a new factory site two years ago, Ragus are actually looking at a 9-10% increase for 2014. Ben states, “in 2000 our turnover in tonnage was 19,600 tons, so we have increased 27.5% since then. We’ve been at the new factory for a couple of years, so you will really see the growth spurt starting to happen now, as the site is much more efficient.”
Aside from efficiency, there are various other reasons contributing to their unique position within the market. “In 2017 we effectively have an open market for beet sugar production and pricing, where as imports of cane sugar are still regulated by the European Union,” says Ben, “we don’t make white sugar. We batch process everything so we predetermine what raw material we are going to put in, meaning we’ll be less effected by the regulation compared with our main competitor.”
Syrup production for the confectionery industry.
When discussing movements within the market, Ben examines the word “transparency” which is becoming increasingly prevalent in the confectionery and bakery industries. While suppliers need to be BRC approved and be able to run to ISO 9001, what is coming more to the fore is Sedex legislation for consumers to be more in the knowledge of food supply chains.
“That is something we’re working on, is transparency of our supply chain,” says Ben, “this kind of suits our business because, as mentioned, we batch process everything so we have full traceability. We sell our sugars and syrups as a premium product and give it a story. That’s what consumers want; less ingredients that are higher quality.”
Another trend within the sugar market is the role of sugar in obesity issues. When asking whether the negative press on sugar has affected Ragus as a business, Ben answers, “not at the moment. We saw this all before in the 70s and in the 80s as well. I will always say that sugar is a totally natural product. Unlike sweeteners, including natural fruit derived sweeteners, there are few chemicals used to extract sugar and if there are, they are not harmful, for example carbon or milk of lime.”
Ben goes on to say, “sugar has been around since the dawn of time, it is the gold standard sweetener. Not only is it used for sweetening, but also for colour development, flavour, bulkener and it kills bacteria. None of the alternatives can replicate all those functions. It’s all about moderation and education.”
While this is a market trend that Ragus are confident will not ultimately affect the future sales of their sugars, there are areas of turbulence that are important to keep an eye on. Ben says, “as a company we’re pretty reliant on raw sugars rather than white. At the moment raw sugar is not in our favour in terms of price. There is a hefty duty to pay
on sugar that comes into the European Union.”
However, to overcome issues such as pricing, the promotion of premium ingredients as well as consumer interest towards integrally sourced ingredients are tools for the future. “Ultimately we’ll adapt with the market,” says Ben, “but we’d prefer to use cane sugar because it’s a cleaner tasting product than beet.”
For the future of Ragus, company growth is the focus. On this topic, Ben states, “ultimately it depends on our main competitors and how they progress as a business. The blue chips have realised that they can have dual supply now that the market has opened up. The next stage would be the food industry using Ragus more as we are in a stable situation.”
Confectionery is also a growth area for Ragus. While this market comprises around 6-8% of their business, this is set to increase due to the ability to make treacle molasses. “Molasses is a very volatile product. It’s hard to handle, it’s dirty, it reacts with itself and can froth up, causing companies to be reluctant to handle it. Yet the confectionery industry needs a lot of it. Molasses is a relatively cheap product but it’s a complex process. We have the ability to complete this method and so that is a growth area for our business,” adds Ben.
Due to worldwide use and global sourcing, sugar is an interesting and constantly changing industry. While Ragus are looking to progress in confectionery, concurrently there are emerging markets that are of use to consider for the years to come. “Asia’s market is growing massively,” says Benjamin, “then there are the countries that manufacture it such as the largest producer Brazil, followed by India.” Therefore, not only is sugar influenced by factors such as politics and public awareness, but also of worldwide growth in Asia and South America.
Ben ends on a positive note, mentioning how the market, although at times can be tough, is an interesting and exciting one to be a part of. And with a new and more efficient factory, a 2014 growth that is higher than expected and a competitor with a situation that is becoming increasingly unsettled, Ragus are situated in a unique and exciting position within the sugar production industry.