Sweet sodas and diet desserts alike get their taste and feel from Ingredion's ingredients. The company makes food ingredients and industrial products from corn and other starch-based raw materials. It serve customers in some 60 markets, including food, brewing, and paper companies. Ingredion's largest product line is starches, used in food for stabilization, feel, and texture and in paper, packaging, and other materials for quality, strength, and a host of other attributes. Its other product lines include sweeteners (high-fructose corn syrup, dextrose), specialty ingredients (products focused on health, affordability, and sustainability), and co-products (refined corn oil, corn gluten feed and meal). Ingredion operates worldwide, but generates most of its sales in North America.
Cornstarch and other starch products account for about 45% of Ingredion's revenue and are used in processed foods, as well as in paper and packaging, adhesives, textiles, pharmaceuticals, make-up, and other products.
Sweeteners used in a wide range of foods -- from condiments to candy -- generate another 40% of sales, with specialty ingredients designed to capitalize on consumer trends bringing in about a quarter.
The company's smallest product segment, co-products, includes refined corn oil sold to a variety of food producers and corn gluten feed and meal used for pet food. It accounts for about 15% of revenue.
Well-covered geographically, Ingredion serves customers in more than 100 countries worldwide. North America is its largest market, accounting for some 60% of sales. South America represents about 20% of sales, followed by the Asia Pacific and EMEA (Europe, Middle East, and Africa) regions, which each contribute about 10%.
Ingredion has some 45 manufacturing plants in about a dozen countries (the US is home to about a third of them).
Sales and Marketing
Ingredion exploits the versatility of corn in supplying a customers across some 60 industries. Food is the company's largest industry segment, generating more than 50% of revenue; however, the beverage, animal nutrition, paper, and brewing industries each contribute about 10%.
Ingredion sells its products through its own sales force directly to manufacturers and distributors.
Although Ingredion's revenue stabilized slightly in 2016 and net income rose more substantially, the company has seen a general decline in both measures since 2012. Revenue has fallen nearly $1 billion in the past four years.
The company reported revenue of $5.7 billion in 2016, up 1%, on improved performance in North America where price increases and a more favorable product mix offset a slight decline in volume. Reduced cost of sales because of the effects of currency translation and lower resructuring/impairment charges allowed Ingredion to post net income of $485 million, up 20% from the from $402 million reported in 2015.
Cash provided by operations also rose in 2016, increasing 12% to $771 million primarily as a result of the company's improved net income.
Ingredion's "Strategic Blueprint" for growth is built around six areas: market relevance, innovation, broadening ingredient portfolio, continuous improvement, sustainability, and geographic diversity.
Three of those areas -- market relevance, innovation, and broadening portfolio -- are focused on the company's desire to adapt to changing consumer tastes and capitalize on trends such as simplicity, health, convenience, and affordability. To that end, Ingredion employs some 350 scientists in more than two dozen Ingredion Idea Labs across the globe and spends about $40 million on research and development.
In 2016 the company expanded its portfolio of gums and resins. It also partnered with Alliance Grain Traders to market pulse flours and plant protein ingredients and became a global distributor of stevia sweetener SweeGen.
Through acquisitions, investments, and product launches, Ingredion also bolstered its global presence. It acquired businesses in China and Thailand in 2017 and 2016, launched a new sweetener (SWEETIS) across the Asia-Pacific region, and invested some $300 million in plant improvements worldwide.
Mergers and Acquisitions
Ingredion bought the rice starch and flour business of Thailand's Sun Flour Industries in 2017, which boosts the company's specialty ingredients segment.
In late 2016 it paid nearly $400 million for Maryland-based TIC Gums, which provides gums and resins to improve the texture of foods and beverages. The deal expands Ingredion's customer base and, again, adds to its specialty ingredients segment. Also that year the company acquired state-owned Shandong Huanong Specialty Corn Development Co. in China's Shandong Province to increase its manufacturing capacity in the country.
Ingredion in March 2015 acquired Iowa-based
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Employer Type: Publicly Owned
Stock Symbol: INGR
Stock Exchange: , NYSE
Chairman: Ilene S. Gordon
EVP and CFO: James D. Gray
President, CEO, and Director: James P. Zallie
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