Ingredion to Acquire Kerr Concentrates for $100 Million, Strengthens Clean Label Position

09 Jul 2015 --- Ingredion Incorporated has agreed to acquire Kerr Concentrates, Inc., a privately held producer of natural fruit and vegetable concentrates, purees and essences. The transaction of approximately $100 million is expected to close within 30 business days, pending customary closing conditions.

Kerr’s ingredients uphold the integrity and richness of raw fruits and vegetables while providing multiple functionalities. These ingredients can be used to enhance the nutrition, texture, flavor and appearance of a number of foods and beverages across a wide variety of categories, from smoothies, juices, dairy products and baked goods to soups and dressings. A single ingredient can add color, flavor and texture to food or beverage products, making it possible to simplify the ingredient list.

Based in Salem, Oregon, Kerr operates two production facilities with state-of-the-art capabilities to ensure consistent quality, efficiency, and safety through process design, automation, and innovation.

“Our goal is to have a broad and powerful range of ingredients that are on trend and in demand. Kerr makes simple, wholesome, natural ingredients that resonate with consumers and are increasingly in demand by customers. Food and beverage companies are looking for simple ingredients with multiple functions to satisfy the growing consumer demand, and fruits and vegetables are at the forefront of the simple trend,” Jim Zallie, Executive Vice President, Global Specialties and President, North America and EMEA, Ingredion Incorporated told FoodIngredientsFirst. 

“Ingredion can enhance Kerr's portfolio with our advanced technologies and new-product development capabilities in sensory and formulation science. And we can grow the business through our broad customer network,” he added.

“Kerr is a profitable company with an exciting portfolio of value-added ingredients that will broaden our current line of wholesome, clean-label solutions. Kerr transforms fruits and vegetables into natural ingredients that resonate with consumers and are increasingly in demand by customers,” said Ilene Gordon, Ingredion CEO. 

The trend toward simple ingredients is rapidly growing and the Kerr acquisition is another step in expanding Ingredion’s clean-label ingredient portfolio. “This extends our clean-label offerings beyond ingredient solutions made from corn, tapioca and potato, and we continue to look for acquisition opportunities in this space,” Gordon explained.

The acquisition comes as clean label truly enters the US mainstream. Consumers are demanding shorter and more recognizable ingredients lists and manufacturers are responding by increasingly highlighting the naturalness and origins of their products. 

Over 20% of US products tracked in 2014 featured a clean label positioning, up from 17% in 2013, according to Innova Market Insights data. Significant rises in the use of clean label ingredients have also been tracked, with growing interest in natural sweeteners, such as stevia and monk fruit, natural colors such as those based on spirulina, elderberry and beetroot, and thickeners such as tragacanth and gellan gums.

“The global clean label trend continues to grow in the United States and across the world as consumers increasingly want food and beverages with wholesome, familiar ingredients that are simply prepared. And, food and beverage companies are reformulating products, including iconic brands, based on this trend,” Zallie said.

“Kerr’s products will extend our clean-label offerings and it complements three areas were we continue to focus: creating wholesome ingredients with clean labels; providing rich and desirable food textures; and helping customers improve the nutritional benefits of their products,” he noted.

In March, Ingredion successfully completed the $340 million acquisition of Penford Corporation, a US-based leader in specialty ingredients for food and non-food applications.

Zallie confirmed that the integration is on track. “The Penford acquisition expanded our portfolio of high-value specialty products by adding potato starches, hydrocolloid ingredients and biomaterials to our portfolio. So we can now offer customers even more ingredient solutions to address growing consumer trends, including gluten-free, non-GMO, enhanced food textures and sustainability,” he noted.