Ingredion focuses on starch business

Ingredient solutions provider Ingredion is developing its starch business as food texturisation continues to play an increasingly important role in food formulation.

The company has identified speciality ingredients business as its main strategy, with new innovations in food rheology—the science of food textures—creating higher-quality food.

Data revealed by Ingredion estimates that of $150 billion total global ingredient sales, texture industry sales make up $40 billion. Other key areas of the global ingredient market include sweeteners, flavours, fibres, minerals, vitamins, preservatives, and colours.

Ingredion chief executive James Zallie commented that the focus on starch will help it to enhance growth in 2018, saying: “Our specialty starch focus… is centred around the breadth and depth of the portfolio that we have.

“We continue to expand functionalities for those products…under that clean label wholesome umbrella, our starch texturisation programme…is a big drive.”

The company announced a 2% increase in annual sales this week, reaching $5.8 billion, and attributed some of the growth to the higher speciality sales. It expects sales to continue to increase over the next few years.

Ingredion’s acquisitions of Banglen and Penford have fortified its position in the starch industry. On Banglen, Zallie said: “Year-on-year we are anticipating very healthy growth from that rice portfolio not just in Asia Pacific but also in the Europe, Middle East and Africa [EMEA] as well as in North America.”​

Meanwhile, potato and corn starch specialists Penford provides a different angle for development in textures for snacks, meats and cheeses.

Speciality sales

Ingredion is taking advantage of its speciality sales, which account for 28% of Ingredion’s business. Zallie expects this to rise to 32%-35% by 2022. In real terms, sales should pass the $2 billion mark.

Speciality food innovation is expected to grow as competition and potential acquisitions become more of a focus this year, according to Vertical Group analyst Brett Hundley.

“Core margins are stable, but they are incrementally harder to drive higher now. Given some inflationary trends and some increased competition, specialty performance and Mergers & Acquisitions become increasingly important, in our view,”​said Hundley.

Zallie also sees potential in developing partnership arrangements in order to access new customers. “Our go-to-market model globally and how we’re positioning with our customers makes us in a very attractive partner, and that’s why many companies come to us to want to leverage the sales marketing capabilities in the reach that we have globally,” he said on the new M&A partnerships, going on to comment: “We’re very open-minded to partnerships, but at the end of the day as it relates to M&A partnerships, it’s all about value creation, it’s all about shareholder value creation, and we’re going to be very disciplined.”​

In March 2017, Cargill food manufacturer enhanced its portfolio using starch to improve its confectionary texturisation.

“When it comes to taste perception, texture is key. In Europe, gummy and jelly product launches with a texture-related claim have doubled in the past five years,” said Cargill EMEA product manager Laura Goodbrand.