ADM building on success in flavors

BOSTON — It’s been more than decade since ADM acquired Wild Flavors, and over those 12-plus years ADM has gradually expanded its flavors business into what has now become a thriving part of the Chicago-based company’s operations.

“Flavors is compounding,” Ian Pinner, senior vice president, president of nutrition, and chief sales and marketing officer at ADM, said during a Sept. 9 presentation at the Barclays Global Consumer Conference in Boston. “We’re seeing growth on growth. The success, if you like, is coming from some core areas. We’ve got very, very strong customer focus. We really are zeroed in on making sure that we’re dealing with our customers’ needs and requirements. And we’ve got a team that’s executing very well.

“We spend a lot of time making sure that we’ve got strong commercial discipline and strong executional discipline as well.”

Pinner said ADM has spent a lot of time investing in core capabilities in its flavors business since acquiring Wild in 2014. Along the way, consumer trends have emerged making flavors an even more important component of product formulations.

“We’re in a market that’s looking for opportunities and also dealing with challenges,” Pinner said. “So reformulation is an area that our team are experts at, whether it’s thinking about managing innovation and renovation of existing products or whether it’s thinking about anchoring into the consumer trends that we’re seeing now, whether it’s health and well-being, whether it’s the functionality that we’re looking for, maybe it’s clean label, natural colors.”

He also noted strong growth in emerging markets. One market he cited was India, where a new prebiotic beverage featuring ADM’s flavor systems and colors was recently introduced.

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“One of the things that excited me a lot coming back from India is not just the structural shift that you’re seeing, every meeting you’re talking about GLP-1, you’re talking about fiber demand, protein demand, and then of course this middle-class health and well-being focus that is really coming through,” he said. “And so I think there’s an opportunity that’s coming there. … We spent time then with another customer, they were having an innovation day at one of our innovation centers with our team where we were really providing that full solution about how do we help them think about the product that they’re going to launch next and then provide that solution.”

Last month, Juan Luciano, president and chief executive officer of ADM, said the company hopes to capture $80 million to $100 million of operating profit as companies transition to natural colors from artificial colors.

Pinner expanded on how ADM plans to capture the additional operating profit.

“If you start talking about color reformulation, it’s not a one-for-one replacement,” he said. “You don’t just take an artificial color and put in a natural color. You’ve got to think about taste. You’ve got to think about the other ingredients that are going there, shelf stability, shelf life and so we tend to have bigger conversations.

“We might start with a color discussion and then they’ll end up getting larger as you think about the opportunity to help those customers with other ingredients that we already have in our pantries. So they don’t need to go and talk to another single ingredient player. They can talk to ADM from the pantry perspective and our teams can bring all of that together and they do that very well.