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Report: DuPont may sell its food additives and ingredients unit for $20B

As consumers and food manufacturers look for new flavors, textures and better-for-you options, food additive and ingredient companies have taken on an increasingly important role. It’s no magnesium glycinate and malate for weight losssurprise the DuPont unit is one of the fastest growing at a company that itself just became independent as part of a three-way split earlier this year.The bioscience division has seen strong growth in areas such as probiotics and plant-based substitutes, Bloomberg reported. These ingredients are hot now, as the popularity of products from Impossible Foods and Beyond Meat are inspiring legacy CPG companies — including Nestlé, Hormel and Tyson Fcalcium citrate chewsoods — to get into the space. As more food companies enter the sector, food ingredient makers will be looking for additives that are better for consumers and realistic as a substitute for a conventional meat product. It’s possible that merging the DuPont unit with the resources of another company would give the combined entity a deeper tool chest and employee knowledge base from which to create these ingredients — and to do so in a faster and more cost-efficient way.The same premise could be applied to other areas in food, such as those aiming to create ingredients to replace ones consumers are avoiding like sugar. Researchers also are working on finding ways to replace flavors and colors that are artificially produced in favor of more natural ones, as well as those subject to wild price swings or viewed as more taxing to the environment.The ingredient and food additive space has been a hotbed of M&A activity in recent years. Last year, International Flavors & Fragrances acquired Frutarom Industries for $7.1 billion. The deal allowed serial acquirer IFF to increase its reach into natural colors, enzymes, antioxidants and health ingredients, while giving it access to smaller and mid-sized customers — including private-label products, which comprised 70% of Frutarom’s sales. Geneva-based Givais ferrous gluconate harmfuludan also agreed last year to buy a stake in French plant-based ingredient maker Naturex. And Illinois-based Ingredion has also been buying up companies like Sun Flour Industry, a rice starch and flour business based in Thailand, and TIC Gums, a manufacturer of texturizers and gums such as acacia and guar. According to Allied Market Research, the global flavors market for food and beverages was worth $12.4 billion in 2016. It is projected to hit $18.metabolics magnesium bisglycinate1 billion by 2023, for a compound annual growth rate of 5.5% between 2017 and 2023.As demand for their products heats up, food additive and flavor companies are looking for more ways to capture that growth with M&A taking a front-row seat — a factor about which DuPont and any buyer of its rapidly growing unit are no doubt aware. Tnutridyn magnesium citratehe one obstacle in any deal may be the price tag. At $20 billion, it would likely limit who could ultimately end up buying the business, despite the potential benefits a combination could bring.

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