Less than a decade old, ADM’s nutrition business is still in its infancy in many regards, but already generating “give or take, north of $800m in operating profits this year and probably $1bn of operating profit next year,” CEO Juan Luciano said last week during BMO Markets Global Farm to Market conference in New York.
While this may sound ambitious given the competitive landscape that pits ADM against several well established players in the nutrition segment, Luciano said the company’s efforts to differentiate itself will allow it to grow at an estimated 15-20% annually – making its $1bn target “absolutely” within reach in the next year.
“We knew we were late to this industry. So, when we looked at the industry, we said, ‘How can we differentiate ourselves?’ And our way to do that was to change the paradigm. Instead of people competing in verticals of colors and flavors and textures and some products, we said, ‘I don’t want to look at business like that.’ … And so, we introduced this concept of bringing systems into it.”
By bringing full systemic solutions and not just individual ‘pantry’ items, Luciano said ADM is able to help customers accelerate product development and marketing so that launches can occur in months rather than years.
He explained that ADM plans to “copy and paste” this philosophy to new segments within nutrition in coming years – exponentially growing its base and profits.
“We started in human nutrition beverages, we expanded into food, we expanded into pet, we expanded into biomaterials as well. So, my point is, we are at the beginning stages. So, will the business get to $1bn? Absolutely, next year. And the business will continue to thrive and move beyond that number,” with a runway of 15-20% over the next five to 10 years, he said.