Ingredion Incorporated (INGR): Business Model Canvas [11-2024 Updated]

In the competitive landscape of the food ingredients industry, Ingredion Incorporated (INGR) stands out with its robust Business Model Canvas. This framework highlights how Ingredion effectively leverages key partnerships, innovative key activities, and a diverse range of customer segments to deliver high-quality, sustainable ingredient solutions. Discover how this well-structured model not only enhances its value propositions but also drives revenue through strategic channels and customer relationships.

Ingredion Incorporated (INGR) - Business Model: Key Partnerships

Collaborations with agricultural suppliers

Ingredion collaborates with various agricultural suppliers to secure raw materials essential for its production processes. These suppliers are crucial for sourcing starches and sweeteners, which are fundamental to Ingredion's product offerings. In 2024, Ingredion reported that approximately 60% of its raw materials are sourced from local suppliers in the regions where it operates, enhancing supply chain efficiency and sustainability.

Partnerships with research institutions

Ingredion has established partnerships with several research institutions to drive innovation in ingredient solutions. These collaborations focus on developing new product formulations and improving processing technologies. In 2024, Ingredion invested $15 million in research and development, which is approximately 2.6% of its total revenue of $5.63 billion for the year-to-date period ending September 30, 2024.

Engagement with food and beverage companies

Ingredion actively engages with major food and beverage companies to tailor its ingredient solutions to meet evolving consumer preferences. In 2024, the company reported net sales of $1.87 billion for the third quarter, with a significant portion coming from its collaborations with food manufacturers. This showcases the importance of these partnerships in driving revenue growth.

Alliances with packaging firms

Ingredion has formed alliances with packaging firms to enhance its product offerings and ensure sustainability throughout its supply chain. These partnerships focus on developing eco-friendly packaging solutions that align with Ingredion's commitment to sustainability. As part of these efforts, Ingredion is exploring biodegradable packaging options, which are expected to reduce environmental impact and appeal to environmentally conscious consumers.

Partnership Type	Collaborating Entities	Investment/Revenue Impact
Agricultural Suppliers	Local Farmers and Co-operatives	60% of raw materials sourced locally
Research Institutions	Universities and R&D Centers	$15 million in R&D for 2024
Food and Beverage Companies	Major Food Brands	$1.87 billion net sales in Q3 2024
Packaging Firms	Specialized Packaging Companies	Development of eco-friendly packaging solutions

Ingredion Incorporated (INGR) - Business Model: Key Activities

Production of starches and sweeteners

Ingredion Incorporated is a leading global ingredients solutions provider, primarily engaged in the production of starches and sweeteners. For the third quarter of 2024, the company reported net sales of $1,870 million, a decrease of 8 percent compared to the same period in 2023, which had net sales of $2,033 million. This decline was mainly attributed to a less favorable price mix and lost sales volume from the sale of its South Korea business in early 2024. The cost of sales also decreased, totaling $1,391 million for Q3 2024, down 14 percent from $1,612 million in Q3 2023.

Research and development for new products

Research and Development (R&D) is a critical activity for Ingredion, as it aims to innovate and develop new products that cater to changing consumer preferences. The company has committed significant resources to this area, with capital investment commitments anticipated to be between $310 million and $330 million for the remainder of 2024. In the year-to-date 2024, Ingredion's net income attributable to the company increased to $552 million from $512 million in 2023, reflecting the positive impact of new product introductions and cost management strategies.

Supply chain and logistics management

Effective supply chain and logistics management is vital for Ingredion's operations, especially given its global footprint. As of September 30, 2024, the company reported total available liquidity of $2.5 billion, which includes $1.3 billion in domestic liquidity and $1.2 billion in international liquidity. This strong liquidity position supports Ingredion’s ability to manage its supply chain effectively, ensuring the timely delivery of raw materials and finished products. The company also reported a significant decrease in accounts payable, which totaled $604 million in Q3 2024, down from $778 million in Q3 2023.

Marketing and sales operations

Ingredion's marketing and sales operations are essential for driving revenue. The company operates across various segments, including Texture & Healthful Solutions (T&HS) and Food & Industrial Ingredients (F&II). In Q3 2024, T&HS net sales remained flat at $600 million compared to $599 million in Q3 2023, while F&II - U.S./Canada net sales decreased by 9 percent to $548 million. The effective management of marketing strategies and sales operations plays a crucial role in mitigating the impacts of unfavorable price mixes and maintaining competitiveness in the market.

Key Activity	Q3 2024 Net Sales ($ millions)	Q3 2023 Net Sales ($ millions)	Change (%)	Cost of Sales ($ millions)
Production of Starches and Sweeteners	1,870	2,033	-8%	1,391
Texture & Healthful Solutions	600	599	0%	N/A
Food & Industrial Ingredients - U.S./Canada	548	599	-9%	N/A
Food & Industrial Ingredients - LATAM	620	658	-6%	N/A

Ingredion Incorporated (INGR) - Business Model: Key Resources

Manufacturing facilities across multiple regions

Ingredion operates a comprehensive network of manufacturing facilities strategically located in key regions. As of September 30, 2024, the company reported total property, plant, and equipment (net) valued at $2.332 billion, slightly down from $2.370 billion at the end of 2023. This includes:

Segment	Property, Plant & Equipment (Net) as of September 30, 2024 ($ millions)	Property, Plant & Equipment (Net) as of December 31, 2023 ($ millions)
Texture & Healthful Solutions	867	855
Food & Industrial Ingredients - LATAM	520	552
Food & Industrial Ingredients - U.S./Canada	543	548
All Other	402	415

Innovative research and development teams

Ingredion's commitment to innovation is reflected in its robust research and development (R&D) capabilities. The company invests significantly in R&D to create new products and improve existing ones. For year-to-date 2024, Ingredion reported capital expenditures of $170 million related to updating and expanding its facilities, including R&D. This investment supports the development of innovative ingredient solutions that cater to evolving consumer preferences.

Strong brand reputation in the food industry

Ingredion has built a strong brand reputation in the food industry, recognized for its high-quality ingredient solutions. This reputation is supported by its diverse product portfolio, which includes starches, sweeteners, and specialty ingredients that meet various consumer demands. As of year-to-date 2024, the company's net sales totaled $5.630 billion, reflecting its strong market presence despite a 10% decrease compared to $6.239 billion in the same period of 2023.

Comprehensive distribution network

Ingredion's comprehensive distribution network enables efficient delivery of its products to customers worldwide. The company benefits from well-established logistics and supply chain operations, which are critical for maintaining product availability and meeting customer needs. As of September 30, 2024, Ingredion reported total available liquidity of $2.5 billion, including $1.3 billion in domestic liquidity and $1.2 billion in international liquidity, which supports its distribution capabilities.

Ingredion Incorporated (INGR) - Business Model: Value Propositions

High-quality, sustainable ingredient solutions

Ingredion Incorporated focuses on providing high-quality ingredients that meet the growing demand for sustainable and clean-label products. In 2024, the company reported net sales of $1,870 million for the third quarter, with a gross profit margin of 26%, up from 21% in the same quarter of 2023. This reflects Ingredion's commitment to maintaining high-quality standards while managing input costs effectively, thereby enhancing its value proposition to customers seeking premium ingredient solutions.

Customization of products for diverse customer needs

Ingredion offers a variety of customizable ingredient solutions tailored to meet the specific needs of its diverse customer base across multiple industries, including food, beverage, and industrial applications. The Texture & Healthful Solutions segment generated net sales of $600 million in the third quarter of 2024, maintaining volume despite a challenging pricing environment. The ability to adapt products to customer specifications allows Ingredion to stand out in a competitive market.

Commitment to innovation and sustainability

Innovation is at the core of Ingredion's strategy. The company invested $170 million in capital expenditures during year-to-date 2024, focusing on expanding and enhancing its facilities. Additionally, Ingredion's commitment to sustainability is evident in its product offerings that support healthier eating and sustainable sourcing. As of September 30, 2024, Ingredion reported cash and cash equivalents of $877 million, enabling continued investment in sustainable practices.

Strong technical support and customer service

Ingredion emphasizes strong technical support and customer service as part of its value proposition. The company provides extensive resources to assist clients in product development and application. This support contributes to customer loyalty and satisfaction, with Ingredion's net income attributable to the company increasing to $188 million in the third quarter of 2024, up from $158 million in the same period of 2023.

Value Proposition	Key Metrics
High-quality, sustainable ingredient solutions	Net sales: $1,870 million Q3 2024; Gross profit margin: 26%
Customization of products	Texture & Healthful Solutions sales: $600 million Q3 2024
Commitment to innovation	Capital expenditures: $170 million year-to-date 2024
Strong technical support	Net income: $188 million Q3 2024

Ingredion Incorporated (INGR) - Business Model: Customer Relationships

Long-term partnerships with key clients

Ingredion Incorporated focuses on establishing long-term partnerships with key clients across various sectors, including food, beverage, and industrial markets. This strategy is evident in their contract structures, which often involve multi-year agreements that provide stability and predictability in revenue streams. For instance, the Food & Industrial Ingredients - U.S./Canada segment reported net sales of $1,644 million for the year-to-date 2024, reflecting the importance of these partnerships despite a 9% decline compared to the previous year.

Responsive customer support teams

Ingredion has invested significantly in responsive customer support teams to enhance customer satisfaction and retention. The company reported a decrease in financing costs by 66% to $30 million for year-to-date 2024, which indicates improved financial efficiency that can be redirected towards customer support initiatives. This responsiveness is critical in addressing customer concerns promptly and effectively, ensuring that clients receive the necessary support throughout the business relationship.

Regular engagement through feedback and surveys

Regular engagement with customers is a key component of Ingredion's customer relationship strategy. The company implements feedback mechanisms and surveys to gather insights from clients, which helps tailor their product offerings. For example, Ingredion reported an increase in net income attributable to the company to $552 million for the year-to-date 2024, up from $512 million in the previous year, suggesting that feedback from clients may have contributed to improved operational performance.

Tailored solutions for specific industry requirements

Ingredion emphasizes the development of tailored solutions to meet specific industry requirements. Their Texture & Healthful Solutions segment, which generated net sales of $1,785 million for year-to-date 2024, has been particularly focused on customizing products to fit the needs of their clients. This segment saw a decrease of 5% in sales primarily due to an unfavorable price mix; however, the focus on tailored solutions remains a core strategy to differentiate Ingredion in a competitive market.

Customer Engagement Strategy	Impact on Financial Performance	2024 Financial Data
Long-term partnerships	Stability in revenue streams	Net sales: $1,644 million (F&II - U.S./Canada)
Responsive support teams	Improved customer satisfaction	Financing costs: $30 million, down 66%
Regular feedback engagement	Enhanced product offerings	Net income: $552 million
Tailored solutions	Competitive differentiation	Net sales: $1,785 million (T&HS)

Ingredion Incorporated (INGR) - Business Model: Channels

Direct sales to manufacturers and processors

Ingredion Incorporated primarily engages in direct sales to manufacturers and processors across various industries, including food, beverage, and industrial markets. In the third quarter of 2024, net sales for the Food & Industrial Ingredients segment in the U.S./Canada decreased by 9% to $548 million, reflecting a challenging pricing environment but indicating the continued reliance on direct sales channels.

Online platforms for information and inquiries

Ingredion utilizes online platforms to facilitate customer inquiries and provide product information. The company has invested in digital tools to enhance customer engagement and streamline the purchasing process. As of year-to-date 2024, the total net sales for Ingredion were $5.63 billion, with a portion attributed to enhanced online customer interactions.

Trade shows and industry events for networking

Ingredion actively participates in trade shows and industry events to network with potential clients and showcase its product offerings. These events are crucial for maintaining visibility in the competitive landscape. In 2024, the company reported a net gain of $90 million from the sale of its South Korea business, highlighting its focus on strategic partnerships and market positioning.

Partnerships with distributors

Partnerships with distributors play a vital role in Ingredion's distribution strategy. The company collaborates with various distributors to expand its market reach and improve product accessibility. The year-to-date financial performance indicates a decrease in overall net sales by 10% compared to the previous year, primarily due to the impact of unfavorable price mix and the sale of the South Korea business.

Channel Type	2024 Net Sales Impact ($ million)	Key Highlights
Direct Sales	548	9% decrease in U.S./Canada segment
Online Platforms	Part of $5,630 million	Enhanced customer engagement through digital tools
Trade Shows	90 (gain from South Korea sale)	Strategic networking opportunities
Distributor Partnerships	Part of overall performance	Focus on expanding market reach

Ingredion Incorporated (INGR) - Business Model: Customer Segments

Food and Beverage Manufacturers

Ingredion Incorporated serves a diverse array of food and beverage manufacturers, providing them with ingredient solutions that enhance product texture, flavor, and nutrition. In 2024, Ingredion reported net sales of $1,785 million for its Texture & Healthful Solutions segment, which primarily caters to this customer segment. This figure reflects a decrease of 5 percent compared to $1,882 million in 2023, driven by an unfavorable price mix impacting revenue despite a 6 percent increase in volume.

Industrial Processing Companies

Industrial processing companies represent a critical customer segment for Ingredion, particularly within its Food & Industrial Ingredients (F&II) divisions. For the year-to-date 2024, the net sales for F&II in Latin America decreased by 6 percent to $1,866 million from $1,991 million in 2023, attributed to an unfavorable price mix and foreign exchange impacts. The U.S./Canada division also experienced a 9 percent decline in net sales, totaling $1,644 million compared to $1,811 million in the previous year.

Health and Nutrition Sectors

Ingredion is increasingly focusing on health and nutrition sectors, responding to consumer demand for healthier products. The company’s healthful solutions, which include plant-based and clean label ingredients, are critical for manufacturers in this sector. The Texture & Healthful Solutions segment specifically generated operating income of $256 million for the year-to-date 2024, down from $318 million in 2023, marking a 19 percent decrease.

Personal Care and Cosmetics Industries

Ingredion also supplies ingredients to the personal care and cosmetics industries, leveraging its expertise in plant-derived materials. While specific sales figures for this segment are not disclosed separately, the overall performance in the 'All Other' category, which includes personal care, showed a decline of 40 percent, with net sales dropping to $335 million from $555 million year-to-date 2023. This decrease was significantly influenced by the sale of the South Korea business.

Customer Segment	Year-to-Date 2024 Net Sales (in million $)	Year-to-Date 2023 Net Sales (in million $)	Percentage Change
Food and Beverage Manufacturers	1,785	1,882	-5%
Industrial Processing Companies (LATAM)	1,866	1,991	-6%
Industrial Processing Companies (U.S./Canada)	1,644	1,811	-9%
Health and Nutrition Sectors	Not Disclosed Separately	Not Disclosed Separately	N/A
Personal Care and Cosmetics Industries	335 (All Other)	555 (All Other)	-40%

Ingredion Incorporated (INGR) - Business Model: Cost Structure

Raw Material Procurement Costs

Ingredion's raw material procurement costs have been significantly impacted by fluctuations in commodity prices. For year-to-date 2024, the cost of sales decreased by 12% to $4,288 million compared to $4,890 million for the same period in 2023, primarily due to lower raw material and input costs.

Operational and Manufacturing Expenses

Operational expenses for Ingredion were flat at $578 million for year-to-date 2024 compared to the same period in the previous year. This represents approximately 10% of net sales. The company recorded restructuring and impairment charges of $38 million for year-to-date 2024, significantly higher than the $10 million in the same period of 2023.

Expense Type	Year-to-Date 2024 ($ million)	Year-to-Date 2023 ($ million)
Cost of Sales	4,288	4,890
Operating Expenses	578	578
Restructuring & Impairment Charges	38	10

Research and Development Investments

Research and development investments are crucial for Ingredion to maintain its competitive edge. While specific figures for R&D investment in 2024 were not disclosed, the company's focus on innovation indicates a commitment to this area. In 2023, the company's innovation pipeline was supported by its global R&D network, which is strategically located to respond to regional market needs.

Marketing and Distribution Costs

Marketing and distribution costs play a key role in Ingredion's overall cost structure. The company's operating expenses, which include marketing, decreased by 3% to $198 million for the third quarter of 2024, down from $203 million in the same quarter of 2023. This represents 11% of net sales for the third quarter of 2024.

Cost Category	Third Quarter 2024 ($ million)	Third Quarter 2023 ($ million)
Operating Expenses	198	203
Marketing & Distribution (Estimated)	Included in Operating Expenses	Included in Operating Expenses

Ingredion Incorporated (INGR) - Business Model: Revenue Streams

Sales of starches and sweeteners

Ingredion Incorporated generates a significant portion of its revenue from the sale of starches and sweeteners. For the year-to-date 2024, net sales from this segment totaled approximately $5,630 million, a decrease of 10% compared to $6,239 million for the same period in 2023. The decline was primarily attributed to unfavorable price mix and the loss of sales volume due to the divestiture of its South Korea business.

Custom ingredient solutions

Ingredion also offers custom ingredient solutions tailored to meet specific customer needs across various industries such as food, beverage, and pharmaceuticals. The Texture & Healthful Solutions (T&HS) segment, which focuses on these custom solutions, reported net sales of $1,785 million for year-to-date 2024, down from $1,882 million in 2023. Despite this decline, the segment's operating income was $256 million, reflecting a decrease of 19% from the previous year, primarily due to unfavorable price mix and higher cost inventory.

Licensing of proprietary technologies

Ingredion licenses proprietary technologies that enhance product formulations and processing capabilities for its customers. Although specific revenue figures for licensing are not disclosed, the company benefits from this revenue stream by leveraging its innovation in food and industrial ingredient solutions.

Revenue from joint ventures and collaborations

Ingredion's revenue from joint ventures and collaborations has also been a key aspect of its business model. Notably, the company established a joint venture with Grupo Arcor in Argentina to sell value-added ingredients, which is expected to enhance its market presence in South America. The financial contributions from this venture are accounted for using the equity method, impacting Ingredion's overall profitability.

Revenue Stream	Year-to-Date 2024 Net Sales (in millions)	Year-to-Date 2023 Net Sales (in millions)	Change (%)
Sales of Starches and Sweeteners	$5,630	$6,239	-10%
Custom Ingredient Solutions (T&HS)	$1,785	$1,882	-5%
Licensing of Proprietary Technologies	N/A	N/A	N/A
Joint Ventures and Collaborations	N/A	N/A	N/A

Updated on 16 Nov 2024

Resources:

1. Ingredion Incorporated (INGR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Ingredion Incorporated (INGR)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Ingredion Incorporated (INGR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.