Ingredion's Zallie sees Kerr as a 'foundational asset'

by Josh Sosland
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James P. Zallie, Ingredion’s executive vice-president of global specialties and president, North America and EMEA.

CHICAGO — At one level, the pending acquisition of Kerr Concentrates gives Ingredion, Inc. a business that squares nicely with several leading food trends, including clean label and healthy eating, said James P. Zallie, a top company executive. Longer-term, the potential for the acquisition runs far deeper, he said.

Mr. Zallie, Ingredion’s executive vice-president of global specialties and president, North America and EMEA, spoke with Food Business News July 12 at the I.F.T. Annual Meeting and Food Expo in Chicago. The discussion followed by four days Ingredion’s announcement it would acquire Kerr, a privately held producer of natural fruit and vegetable concentrates, purees and essences.

While the $100 million acquisition is smaller than the $300 million to $500 million transaction the company recently said it is eyeing as it continues shifting its portfolio toward specialty ingredients, Mr. Zallie said Ingredion has its sights on expanding what may be done with the fruit and vegetable concentrates produced by Kerr. Specifically, he said the reach of Kerr’s product line may be greatly extended through the application of Ingredion technology.

Kerr operates production facilities in Salem and Oxnard, Calif., and its products currently are most commonly used as ingredients for smoothies, dairy-based products, frozen products, drinks and juices, Mr. Zallie said.

 “For Ingredion, Kerr fits from a standpoint of wholesome clean label first and foremost,” he said. “The fruit and vegetable purees and concentrates, juice concentrates and essences they produce all are simple ingredients that consumers recognize and understand. They are in demand, are on trend and are growing. So, that moves up into that platform.”

Texturizing has been cited as an area of focus for Ingredion acquisitions going forward, and while Kerr may not be an obvious fit in this area right away, that may change over time with investment in research and development, Mr. Zallie said.

“We believe we have technology that can functionalize those products to provide texture along with the fruit and vegetable labeling trends, along with the opportunity inherently to deliver natural colors and sweeteners as well,” he said. “It all flows, but the technology we think we can bring will help broaden the offerings. So we are looking at Kerr as a foundational asset, heavily on trend.”

Longer term, Mr. Zallie sees Kerr products moving from liquid-based products such as smoothies and dairy products into dry products such as snacks.

“With the functionalizing, vegetable-based products would open it to more savory type applications,” he said. “Certainly there are applications with healthy snacking. That’s why we see an opportunity to take what is a liquid-based business, apply our technology, as it applies to powder processing and dry technology.

“It’ll be a multi-year journey, but there’s a stake in the ground. It’s directional. It’s consistent again with wholesome clean label, texturizing and nutrition. It touches all three. It takes us in a direction in which we emphatically want to go.”

Mr. Zallie was complimentary of Kerr as a standalone business.

“Kerr itself has done extremely well with an excellent management team,” he said. “We’re excited to support that and overlay our go-to-market presence. We have overlapping customers.”

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