BOCA RATON, FLA. — In 2015, specialty ingredients, which include ingredient formats derived from corn, potato, rice, tapioca, stevia, etc., accounted for 25% of sales for Ingredion, Inc., Westchester, Ill. Today, the portfolio of ingredients makes up 29% of sales, which were $5,841 million in fiscal 2018, and management has set a target to grow specialty ingredient sales to a range of 33% to 36% by 2022. Such growth will require capitalizing on many of the trends driving change in the food and beverage category.

“When you think about our unique value proposition, it really is that we are aligned with the food and beverage trends that are shaping the food industry today and are impacting the customers,” James P. Zallie, president and chief executive officer, said during a Feb. 19 presentation at the Consumer Analyst Group of New York conferenced. “We pride ourselves on being customer intimate with global reach and local touch.”

The trends seen driving the specialty ingredient portfolio include texture, clean label, plant-based proteins, sugar reduction and food system development.

“Ingredion is very well positioned to win in each of these spaces because of our technology, because of our asset footprint and because of our connectivity with customers and our go-to-market model,” said Jorgen Kokke, vice-president of global specialties and president of North America.

Starch-based texturizer ingredients form the foundation of Ingredion’s texture innovation portfolio and account for approximately $1 billion in total sales.

“We continue to be very optimistic and see growth potential and endless innovation opportunities as a result of our rich tool kit, (a) toolbox with multiple raw material bases that is really unparalleled — tapioca, potato, rice and multiple varieties of corn as well as multiple processing techniques,” Mr. Kokke said.

He added that such ingredient formats as functional tapioca and rice flours will take clean label innovation to the next level.

Ingredion has invested heavily to develop a strong position in plant-based proteins. The company has invested $140 million in two processing plants, one in Nebraska to make plant-based protein isolates and another in Saskatchewan where the company has entered into a joint venture with Verdient Foods, Inc., a maker of pulse-based concentrates and flours.

In sugar reduction, Ingredion has invested in stevia- and allulose-based solutions.

“The last platform is food systems, and this is about combining different ingredients synergistically,” Mr. Kokke said. “For example, different hydrocolloids as well as starches, but you could also think about high-intensity sweeteners and/or plant-based proteins. And this really leverages Ingredion’s food science and formulation capabilities in our Ingredion Idea Labs.

“What is important to realize with this particular platform is that it resonates very well with the small- and medium-sized enterprises. Although many of these businesses are very well funded, they oftentimes lack scale, access to good R.&D. resources. So, in a sense, you could say they partner with Ingredion and outsource the R.&D. to Ingredion. And this platform not only provides a very good revenue growth opportunity but also at margins that are double the rate of what we generally see in our specialties franchise.”

As part of its CAGNY presentation, Ingredion management offered a four-year outlook for the company.

“We expect our total net sales to be up 1% to 4%, but it’s really driven by specialty growth platforms,” said James D. Gray, chief financial officer. Over $500 million of the sales increase is forecast to come from specialty ingredients.

“We’re facing a number of different headwinds and tailwinds in our business,” Mr. Gray said. “We’re executing against Cost Smart (Ingredion’s efficiency program). We’re driving our specialty growth platforms. We’re overcoming inflationary pressures, and we’re also dealing with some ups and downs in terms of some of our co-products.

“So, our four-year profit outlook is net sales driven by 1% to 4%. And our adjusted operating income, we expect to be in the mid-single-digit range.”