Businessmodel of Ingredion

Customer Segments

Ingredion has a niche market business model, with a specialized customer segment. The company targets its offerings at the food, beverage, animal nutrition, brewing, textile, personal care, pharmaceutical, and paper/corrugating industries.

None of its individual customers accounts for more than 10% of its net sales.

Value Proposition

Ingredion offers five primary value propositions: accessibility, customization, convenience, risk reduction, and brand/status.

The company creates accessibility by offering a wide variety of options. The sweeteners, starches, nutrition ingredients, and biomaterials it provides are used by its clients to do everything from enhance sweetness and provide digestive support to soften texture and increase adhesive strength.

The company enables customization by collecting consumer insights as part of the product development process. It maintains 25 Ingredion Idea Labs worldwide, innovation centers where it works with customers to identify regional and general trends and incorporate them into new products (e.g., adding fiber to a cereal bar or reducing the amount of sugar in a sports beverage).

The company creates convenience by providing ingredients that simplify consumers’ lives. These include materials such as functional starches that help frozen products thaw evenly, cold water swelling starches that help instant puddings stir thoroughly, microwaveable soups that maintain home-style textures, and personal care products that pump from bottles without clogging.

The company reduces risk by maintaining high standards. It utilizes natural, plant-based products such as corn, potato, tapioca, and fruits/vegetables in its ingredients in place of synthetic materials and chemicals. Also, 100% of its production volume comes from ISO 9001-certified legacy facilities and 95% of its facilities have obtained Global Food Safety Initiative (GFSI) certification.

The company has established a powerful brand due to its success. It maintains 11,000 employees in over 100 countries. It touts itself as the largest manufacturer of corn-based starches and sweeteners in South America. Lastly, it has won many honors, including recognition as one of the “World’s Most Admired Companies” by Fortune seven years in a row (2010 - 2016) and as one of the ”World’s Most Ethical Companies” by the Ethisphere Institute three years in a row (2014 – 2016).

Channels

Ingredion’s main channel is its direct sales team, whose members are dedicated to specific geographic regions; it also relies on distributors in various regions. The company promotes its offering through its social media pages and participation in conferences.

Customer Relationships

Ingredion’s customer relationship is primarily of a self-service nature.

Customers use its products while having limited interaction with employees. The company’s website provides self-help resources such as information about sweeteners, the corn refining process, and its non-GMO credentials. That said, there is a personal assistance element in the form of phone and e-mail support.

Key Activities

Ingredion’s business model entails designing, developing, and manufacturing its ingredients.

Key Partners

Ingredion’s key partners are the distributors it partners with worldwide to sell its products and the trucking companies it contracts with to deliver its bulk products to customer destinations.

Key Resources

Ingredion’s main resources are its human resources, including its global network of over 350 scientists and its collection of nutrition experts, research chefs, and process engineers.

Its important physical resources include 25 Ingredion Idea Lab innovation centers and 43 manufacturing plants located in North America, South America, Europe, the Asia-Pacific, the Middle East and Africa.

Lastly, it places a high priority on intellectual property, with 844 issued and pending patents.

Cost Structure

Ingredion has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Ingredion has one revenue stream: the revenues it generates from sales of its ingredients to its customers.