“Expanding citrus offerings”: ADM acquires the Ziegler Group

18 Mar 2019 --- Archer Daniels Midland Company (ADM) is to acquire the Ziegler Group, a European provider of natural citrus flavor ingredients. The deal is expected to close in the second quarter of 2019. The agreement comes shortly after ADM completed its addition of US-based citrus flavor provider Florida Chemical Company (FCC), which was officially completed earlier this month.

Citrus flavors and citrus capabilities in food applications are under the spotlight. Last week, global flavor and fragrance house Givaudan and the University of California, Riverside (UCR), embarked on the next phase of their long-term collaboration, with a US$3.5 million donation from Givaudan to support UCR’s Citrus Variety Collection. As for citrus flavors as a whole, Givaudan is continuing to look for new character and taste profiles for what are some of the most popular flavors in the world.

Citrus flavors remain a firm favorite in beverages, and they are also popping up more frequently in various food items, including confectionery and savory items, such as potato chips.

The global citrus flavors market is estimated at more than US$8 billion and is anticipated to grow at close to 5 percent CAGR between now and 2025, according to Jackie Anderson, Manager, Global Media Relations, ADM.

“Ziegler is highly respected as a cutting-edge leader in citrus, and we’re excited to welcome their outstanding leadership and talent to ADM,” says Vince Macciocchi, President of ADM’s Nutrition business. “The combination of Ziegler and Florida Chemical will immediately position ADM for growth as a global leader in natural citrus ingredients, with a complete range of innovative citrus solutions and systems for food, beverage and fragrance customers.”

Founded in 1963, Ziegler uses proprietary cold concentration technologies to produce natural citrus oils, extracts, concentrates and compounds for flavor, food and beverage industry customers, focusing on European, US and Japanese markets. The company is privately held and headquartered in Aufsess, in southern Germany.

“We are delighted that we found a strong home at ADM where both our business and our people can grow,” states Günter Ziegler, Managing Director at Ziegler. 

“Citrus is one of the fastest-growing, highest-demand flavors for food and beverages, which is why the creation of a global citrus platform offering a complete product line for our customers is such an important capability for our growth strategy,” Macciocchi continues. “We’re continuing our portfolio transformation and as we build the company, the beneficiaries will be our customers and our shareholders.”

As reported in January 2019, the acquisition of FCC, a division of Flotek Industries, by ADM, was valued at approximately US$175 million. In connection with the sale of FCC, Flotek and ADM have entered into long-term reciprocal supply agreements. The first will secure Flotek's long-term supply of d-limonene, a chemical found in the peels of citrus fruits and in other plants.

Additionally, Flotek will manufacture differentiated chemistries for FCC’s industrial customers. Both companies will explore opportunities to jointly develop next-generation chemistry technologies for the oil, gas and agricultural industries.

Anderson told FoodIngredientsFirst at the time: “FCC was a pioneer in the citrus flavor industry and is now one of the largest producers in the world, creating 100 percent natural flavor ingredients for a wide range of foods and beverages. Their 75-year heritage and deep understanding of the science and business of citrus makes them a perfect partner.”

The FCC move, and now the Ziegler acquisition, further cements ADM’s evolution towards more value-added ingredients beyond the company’s traditional commodity base. “With the acquisition of WILD in 2014, ADM began the journey to becoming the world’s leading nutrition company,” Macciocchi concludes.