How thinking small could pay off big for Ingredion

A decade ago, Ingredion took a deep look into its 18,000 customer base that purchased its ingredients at the time and started separating them. The exercise wasn’t about determining which customers were more important, but rather how those companies went about choosing to work with Ingredion.

The ingredient supplier found some companies preferred a largely go-it-alone mentality because of their company culture or resources they already had in-house. At the same time, other businesses, usually smaller in size, valued a deeper, more intimate relationship because they didn’t have the decades of experience or the deep financial pockets as their larger competitors.

“Some wanted to partner with us more because that’s the nature of what they do, or the complexity of their business,” Greg Aloi, vice president of Ingredion’s customer co-creation and innovation, recalled. “And that really started the wheels in motion.”

For Ingredion, the opportunity to partner with smaller upstarts was less about generating big sales. Instead, it centered around building relationships and positioning the company to benefit from the future growth of younger businesses — which oftentimes were positioned in fast-growing, trendy categories.

The connection could be even more fruitful if the smaller company moved into other categories or got acquired by a bigger player; potentially giving Ingredion access to additional business.

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Aloi said Ingredion started to develop strong relationships with these companies during the height of the COVID-19 pandemic. Today, it works with about 20 to 25 companies that are developing products such as vegan bacon or working to reduce sugar, salt or fat in their offerings. Ingredion plans to add new customers each year to build “a rather sizable portfolio” of partner companies, he said.

“We’re in the business to make money, so how we’ll be successful is when the customer wins,” Aloi noted. “It’s hard to put a short-term return on it, but it’s something we feel we have to invest in.”

Solving an ingredients mystery

At food and beverage investor Redbud Brands, executives worked closely with Ingredion to find a replacement starch for the company’s high-protein Cheddies cracker to replace one that Ingredion is discontinuing. Cheddies plans to switch to a new cracker formula incorporating the substituted starch in May.

Aron Pobereskin, the head of innovation at Redbud, said Cheddies started looking for a replacement ingredient in November, a process that was difficult and time consuming. 

Cheddies, he noted, needed to carefully assess how a new ingredient would influence a host of attributes, including the moisture content and firmness of the dough, how much it would bounce back when stretched, whether it would allow the product to maintain its clean label claim and if the change would allow the cracker to maintain its coveted crispiness.

Pobereskin said working directly with a large ingredient supplier such as Ingredion enabled Cheddies to troubleshoot the problem much faster, tap into the larger company’s deep insight into the ingredients they are or could be working with and ultimately enabled him to get the reformulation completed more rapidly.

cheddies, crackers

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By partnering with Ingredion early on in the brand’s development, he said the ingredient supplier can better understand the Cheddies product while increasing the likelihood that it will make recommendations that are more likely to work and in tune with the offering’s long-term goals.

“It’s easier for them to understand our needs, and then they can kind of flex with us when we find something’s not quite working or we want to optimize a characteristic of our product,” Pobereskin said.

While the dichotomy between a small upstart brand such as Cheddies and a 121-year-old company like Ingredion, which recorded $8 billion in revenue in 2022, might seem wide, the partnership could prove to be a win-win for both businesses if the cracker goes on to be a big success.

Cheddies, of course, would generate additional sales, and Ingredion, which started working with the brand in its infancy and when its future was much less certain, positions itself to be their primary ingredients supplier, helping its own bottom line.  

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