Tagatose has only 1.5 calories per gram compared to sugar’s four calories. It has a low glycaemic index, making it suitable for consumption by diabetics. And unlike high-intensity sweeteners like aspartame, it can be substituted in equal amounts for sugar in recipes, making it ideal for baking. It has no bitter aftertaste like artificial sweeteners and doesn’t promote tooth decay.

It’s a naturally occurring substance and, although it is derived from lactose, the sugar in milk, Tagatose is lactose-free. Compared to Stevia, the plant-based sweetener that has become a popular alternative to artificial sweeteners, it tastes much more like sugar.

A slow and quiet ascent

Tagatose was patented 25 years ago by an American entrepreneur named Gilbert Levin. His initial tests showed that the substance could be used to treat patients recovering from bowel cancer and other gastrointestinal diseases. It acts as a prebiotic, encouraging the growth of healthy intestinal flora. But medical testing requirements and the pharmaceutical approval process hampered its entry to market.

In 1996, Danish dairy concern Arla Foods acquired the right to produce Tagatose as an additive in foods but had difficulties commercialising a substance that had been developed in a pharmaceutical context. Production costs proved too high to be profitable, and in 2006 Arla stopped production. At that point, Nutrilab – the sister company of Damhert Nutrition – based in Bekkevoort, Flemish Brabant, bought up the remaining stocks.

A year later, Damhert patented an enzymatic process for extracting Tagatose from lactose. This procedure is considerably cheaper than the previous chemical process, giving Damhert a distinct advantage in bringing tagatose to market.

Damhert has also adopted a different business model to previous manufacturers, according to Clio Hendrickx, the company’s development manager. Arla tried to convince big manufacturers to try the new sweetener in their products, opting for a top-down approach to building market share.

Damhert, on the other hand, has slowly and quietly introduced its own products containing Tagatose over the past six years, building consumer confidence and market share from the ground up. The tagatose product range now accounts for 30% of Damhert’s profits.

PepsiCo and Yoplait calling

Other companies have started to take notice. “We received a lot of requests from the food industry – from very small companies to very large multinationals – interested in tagatose,” says Hendrickx. But given the limited amounts that Damhert was able to produce, it was not feasible to supply other manufacturers. That’s about to change.

With a potential infusion of cash from investment partners, including the Boerenbond (Farmers’ Union), Limburg Reconversion Company and the Agri Investment Fund of the Flemish government’s GIMV, Damhert is preparing to scale-up production of tagatose at its facility in Italy, from 800 tons to 2,500 tons per year. For the first time, Damhert will have a surplus of tagatose to sell.

It hit the headlines earlier this month that both PepsiCo and Yoplait have expressed interest in using tagatose in their products. However, Hendrickx warns that Damhert intends to continue its policy of building market share gradually. “I can already tell you that our strategy will be to start with small-to medium-sized companies. We prefer to have several clients that can grow with us,” instead of one or two giants requiring large volumes from the start.

The second phase of Damhert’s expansion is the building of a 10,000-ton capacity plant in 2015. “Then we can start looking at those big contracts for the bigger volumes, but we need to do it step by step,” says Hendrickx. The new factory will be built somewhere in Belgium, but its exact location has yet to be determined. Since Tagatose is made from whey, a by-product of cheese, it makes sense to locate the new factory close to a source of raw materials – next to a cheese manufacturer, in other words.

“We see a lot of future in this sweetener,” concludes Hendrickx. “Western society has huge problems with diabetes, with obesity... For now, Tagatose is part of a niche market – the sugar-free business and sugarfree products – but we see a future with less sugar and more alternatives, of which I think tagatose will be a very interesting candidate.”

www.damhert.be