With the publication of our 2021 Annual Report, here's a closer look at our business strategy, split between delivering top-line and bottom-line growth in Food & Beverage Solutions and steady earnings from Primary Products.
We produce our ingredients from agricultural raw materials mainly at large-volume corn wet mills, and also at smaller blending facilities where we make bespoke solutions for customers. We operate as an integrated business made up of two trading divisions, both with distinct roles to play.
Food & Beverage Solutions is focused on delivering growth, with Primary Products focused on delivering cash and steady earnings. They share a cost-efficient asset base and some common customers, and we manage both businesses to optimise returns for shareholders. The challenges of managing through the pandemic have highlighted the strength of our strategy, as shown by our resilient performance during the year.
Food & Beverage Solutions
Through this division, we provide ingredients and solutions which add specific functionality, nutrition and health benefits to our customers’ products. This division includes our Sucralose business.
We work in partnership with customers to develop new products, and reformulate existing ones, to make food and drink healthier but still taste great. It sounds simple, but it’s far more complicated than just swapping one ingredient for another.
Taste, texture, mouthfeel, shelf-life, stability – all these things have to be taken into account when reformulating food and beverages in our network of applications labs. Taste is inherently local, which means that food and beverages also need to be adapted to different regions and countries. Our portfolio of sweeteners, starches, fibres and stabilisers, combined with our technical expertise in key categories, help us deliver solutions for customers in their local markets.
Our customers come to us for our expertise, particularly in the following areas:
- Sweetening: our understanding of sweeteners, built over many years, and our broad portfolio have given us unique expertise in sweetening, and sugar and calorie reduction in particular. Our sweeteners and fibres help reduce sugar and calories without compromising the taste and texture consumers know and want.
- Mouthfeel: our starches add body, lengthen shelf-life and replace fat while preserving the texture and mouthfeel people want.
- Fortification: our fibres offer a range of nutritional and functional benefits, alongside exceptional digestive tolerance.
- Stabilisation: with our deep knowledge of ingredients and complex food systems, we create customised stabiliser systems (highly functional ingredient blends) that ensure products maintain their stability and appetising texture.
Through this division, we provide high-volume products to customers in the food and beverage, and paper and packaging industries, primarily in North America. We also sell co-products as animal feed to customers around the world. Our two main markets are bulk sweeteners and industrial starches. These are both large, mature markets with high barriers to entry. In these markets, we compete primarily on quality, service and price.
We deliver value in Primary Products in the following ways:
Drive productivity and efficiency: the more efficient our plants, the lower our costs of production. We have four large corn wet mills in the US, two smaller corn wet mills in Europe, and acidulants plants in the US and Brazil. For the best returns, they need to operate at, or close to, capacity. We have global and local programmes which ensure a relentless focus on safety, productivity and efficiency at every plant.
Optimise product and category mix: with tight margins on our products, small changes can make an important difference to our performance. We look very closely at what we sell, to whom, and into which markets, moving production where we can from declining to growing product lines, and targeting new and growing markets.
Secure corn supply: corn is our largest raw material, and a secure supply is essential. We invest in our corn silo (elevator) storage network and our relationships with the farmers who supply us, and we manage inventory carefully.
Reduce exposure to volatile commodity markets: every part of the corn kernel has some commercial value, but the selling price of commodities such as corn oil and corn meal is set by the market and can vary considerably. We use a range of measures to manage our exposure as best we can, from tolling contracts which pass the raw material costs on to customers, to using futures contracts to lock in future corn prices.
Look at how our two business divisions have fared over the past financial year by visiting our Annual Report hub.
Alternatively, download the full Annual Report PDF below