- Phosphate specialist Innophos acquired ingredients maker Novel Ingredients for $125 million, reports FoodBev Media.
- Novel Ingredients provides dietary supplement ingredients that align well with Innophos’ strategic priorities to “grow its food, health and nutrition portfolio, increase its presence in nutrition end-markets, and develop innovative solutions that better serve its customers,” according to a company release.
- Innophos has previously stated that it wants to increase revenue to $1.25 billion by 2022, up more than 70% from $725 million in its most recent fiscal year. The company also wants the share of its food, health and nutrition segment to increase from 52% of company sales last year to 75% in five years.
This is a smart deal that enables Innophos to tap high-growth markets geared toward active and health-conscious consumers. The transaction brings together Innophos, which historically has focused on high-margin specialty grade phosphates for processed meats, baked goods, dairy and beverages, and Novel Ingredients, a specialty ingredient supplier of botanicals, proteins, amino acids and other healthy ingredients.
The purchase of Novel diversifies Innophos’ product portfolio and better positions the company to take advantage of emerging trends in the health, wellness and nutrition space, which aligns with the company’s Vision 2022 strategic priorities. The combined entity will now generate 60% of its sales from food, health and nutrition, which puts the company well on its way to achieving its 75% target.
“Our position as a market leading provider of vital ingredient solutions is strengthened through our combined innovative technology capabilities, a broader and deeper product portfolio, and the addition of Novel’s experienced and dedicated people,” Innophos CEO Kim Ann Mink said in a statement. “In addition, by coming together with Novel, we more closely align Innophos with important consumer mega trends such as health and wellness, energized aging and clean labels.”
Consumers increasingly are looking to get more health benefits through the foods they eat. Consequently, there is a growing trend among food and beverage manufacturers to reformulate existing products as well as explore new product development that centers on providing functional benefits. Areas of high interest include plant-based ingredients for immune health, added protein for sports nutrition and omega-3 fatty acids for cognitive health. The acquisition of Novel now puts Innophos in a much better position to serve the evolving needs of a CPG sector looking to get healthy.