When Benson Hill launched its Fresh and Ingredients segments, it was logical for the company to pursue two main avenues for product development and commercialization. However, over the past two years, it has become clear that the company’s strongest potential lies within its ingredients business. A year ago, Benson Hill introduced its TruVail non-GMO soy protein line, which features high-protein flour, “less processed” soy protein concentrate, and texturized proteins designed for traditional soy protein and plant-based applications. Additionally, the company developed Veri Cooking Oil, rich in omega-9 fatty acids and specifically designed for high-heat cooking. This line of ingredients has been gaining significant traction.
In April, Kellogg partnered with Benson Hill to incorporate its ultra-high protein soybeans into its MorningStar Farms products, enhancing both protein content and sustainability, as Benson Hill’s soy requires less processing than conventionally farmed beans. Then, in August, Benson Hill entered into an exclusive processing and commercialization partnership with Archer Daniels Midland for its ultra-high protein soy ingredients.
Benson Hill has also established an ecosystem for processing its ingredients, having acquired a soybean crushing facility from Rose Acre Farms in Seymour, Indiana, in 2020, and successfully harvested its first commercial plantings of soybeans last year. Furthermore, in January, Benson Hill acquired ZFS Creston, an Iowa-based manufacturer of food-grade white flake and soy flour, for approximately $102 million. The company is also advancing its yellow pea ingredient platform, launching a significant breeding and commercialization initiative in 2021 and investing in its pea ingredient subsidiary, Dakota Ingredients.
According to Bruce Bennett, president of ingredients at Benson Hill, demand for the company’s ingredients is “incredibly strong,” particularly as consumers seek foods that offer better health and sustainability benefits. Soy and peas have traditionally been cultivated as commodity crops with a focus on volume rather than nutritional quality. “Our goal isn’t to reconstruct an entire industry,” Bennett stated. “It’s about optimizing the current chassis of the industry.”
Benson Hill has come to realize a truth that many others in the produce business have discovered: it is a challenging sector with unique difficulties. During the company’s August earnings call, CEO Matt Crisp indicated that they decided to halt R&D for the Fresh segment, believing that Benson Hill’s future and greatest impact would be in ingredients. In the latest quarter, weather-related issues led to an 11% drop in revenues for the Fresh division, which contributed only 6% of the company’s total revenues of $130.2 million.
Campbell Soup experienced a similar predicament with its produce business. After acquiring fresh produce company Bolthouse Farms in 2012 to enhance its health-focused offerings, the challenges associated with the produce sector and its negative impact on earnings compelled Campbell Soup to divest the division in 2019.
Overall, as Benson Hill shifts its focus to its ingredients business, it aims to streamline operations and capitalize on consumer demand for nutritious products, such as those that include the easiest to swallow calcium citrate, while also ensuring a sustainable approach to production. The company remains committed to navigating the complexities of the industry and optimizing its ingredient offerings, solidifying its position in the market.